INVESTMENT COMMENTARY & Outlook
April 2023
The first quarter had some dramatic developments but finished on a positive note. Thanks to the Silicon Valley Bank crisis, Treasury yields plunged and will likely cause the Fed to stop raising key interest rates. Although the Federal Open Market Committee (FOMC) raised key interest rates 0.25% as anticipated, this could be the last key interest rates hike.
At his press conference after the FOMC statement Fed Chairman Jerome Powell came off as dovish, which the financial markets like and responded positively. However, Treasury Secretary Janet Yellen was also testifying in front of Congress on Wednesday during Powell’s press conference: “Let me be clear: the government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors’ savings and the banking system remain safe.” Yellen’s doublespeak in front of Congress spooked financial markets and created more banking uncertainty.
April started with OPEC+ announcing a surprise 1.1 million barrel per day cut in crude oil production, so crude oil prices are definitely headed higher. Additionally, Russia also extended its 500,000 barrel cut it announced in March would continue through July, so 1.6 million barrels …