Federal Open Market Committee maintains dovish stance
MONTHLY MARKET COMMENTARY |
The month of March brought strong returns for global stocks, as the Federal Open Market Committee (FOMC) scaled back its expectations for rate increases in 2016, adding to the appeal of riskier assets. Emerging market equities (up 13.2 percent) led the way for the period, followed by domestic real estate investment trusts (REITs) (up 10.4 percent) and emerging market bonds (up 9.1 percent). Taxable bonds rose broadly for the month, as all but the shortest end of the yield curve edged downward. Municipal bonds stood alone in negative territory for the month, but remain positive year to date.
The March FOMC meeting came and went without an increase in short term rates beyond the current 0.25–0.50 percent target range. In fact, new projections released by the committee members suggest only two quarter-point rate increases in 2016, down from the four indicated by the FOMC back in December 2015.