Weekly Market Update

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Gross Domestic Product (GDP) is the broadest measure of economic activity. During the fourth quarter, U.S. GDP rose at an annualized rate of 3.3%, above the consensus forecast of 2.0% but down from 4.9% during the third quarter of 2023. Strength was seen in consumer and government spending, business investment, and inventory growth. Despite higher interest rates, the economy has remained surprisingly resilient and has shown few signs that it will enter a recession.

After ten consecutive hikes since early 2022, the European Central Bank (ECB) held benchmark interest rates steady for the third meeting in a row as expected. The statement released after the meeting again emphasized that future monetary policy decisions will be based on incoming economic data. During the press conference, ECB President Lagarde said that any discussion of a rate cut is “premature.” Similar to the U.S. Fed, the ECB is still planning to hold rates near current levels for now to help bring down inflation.

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