S&P 500 Falls Third Week

U.S. equity backpedaled during the holiday-shortened trading week with the S&P 500 and Dow Industrials posting their third consecutive weekly declines. Investor sentiment soured after the Fed’s preferred reading of inflation, the personal consumption expenditures (PCE) price index, ran hotter than expected in January (+0.6%) and over the past 12-months (+5.4%). This helped push markets to pricing in a median terminal (peak) Fed Funds rate of around 5.38%, up by about 0.60% over the past month, moving higher to meet the Fed's own increased outlook on rates.