United States

Fed pulls the trigger on interest rates

MONTHLY MARKET COMMENTARY  | 

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Capital market returns were mostly negative for the month of December, leaving the final overall results for 2015 mixed. Domestic equity performance was differentiated by capitalization and style, as large stocks outperformed small, and growth stocks outperformed value. Domestic fixed income was mostly positive for the year, despite rising rate concerns.

Among the strongest asset classes in 2015 were international small cap stocks (up 9.6 percent), large cap growth stocks (up 5.7 percent) and domestic REITs (up 4.5 percent). Commodities, emerging market equities, and emerging market bonds were the poorest performing asset classes for the year, sliding 24.7 percent, 14.9 percent and 14.9 percent, respectively.

The year ended with a December that was eventful for the economy, with important decisions made with respect to monetary policy and a new government spending bill. As was widely expected, the Federal Open Market Committee voted to raise the federal funds rate (FFR) during meetings in December. The increase ended a seven-year span of a FFR near zero and marked the first increase in almost 10 years.

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