Weekly Market Commentary 06/02/2017

The financial markets have an enduring preference for clarity over confusion. The same goes for Federal Reserve policymakers. Unfortunately for both, the data upon which important decisions are made have long sent conflicting signals about the economy. Growth slowed in the first quarter, but the job market delivered a solid performance. Likewise, inflation has remained stubbornly low, even as key asset prices in the stock and real estate markets have spiked. The challenge for investors and the Fed is to navigate through the fog of conflicting data and hope they make decisions that lead them in the right direction. In the process, there is always a nagging fear that next key data point would prove them wrong, resulting in a sharp market correction or a disruption of policy plans.