Remember the “Soup Nazi” from Seinfeld? Well, Federal Reserve Chairman Jerome Powell channeled his inner “Soup Nazi” with an emphatic “No rate cuts for you” last Wednesday.

After a rough first couple of weeks to open 2024, markets have been ripping the past week and a half. We’ve settled into an interesting environment where the talk has gone from a hard landing, recession and four rate hikes in 2023 to a soft landing and six possible rate cuts in 2024.

Despite the conflict in Israel, markets rallied early last week, and the potential for added turmoil in the Middle East had not had any measurable impact on the markets through the middle of the week.

Markets continued to slump last week as bond rates hit levels we haven’t seen in 16 years. Suddenly, a five-year treasury yielding 4.7% isn’t so bad when compared to the volatility of the stock market.

Markets had their best January since 2019, and the upward momentum has spilled into a strong start to February thanks to the dovish Fed last week.Markets grappled with this information while also keeping a close eye on the release of the Fed minutes, which showed the Fed was nowhere close to considering a pause, let alone cuts.

Markets had their best January since 2019, and the upward momentum has spilled into a strong start to February thanks to the dovish Fed last week.

Overall, the U.S. economy grew at an annual rate of 2.1% in 2022. It’s a pretty modest number, but if you consider that growth was negative in the first six months, the fact that we managed to get above 2% for the year is pretty remarkable.

After a strong showing the previous week, the major domestic equities gave back most of the prior week’s gains and closed slightly lower last week.