Financial Market Roundup
Produced by Fifth Third's Investment Management Group

In the following piece, Fifth Third's Investment Management Group recaps the market and how it reacted to various events in the month of March.


The Federal Open Market Committee (FOMC) last met on March 20th and held their interest rate unchanged leaving their target range at 5.25%-5.50%. In a prepared statement by the Federal Reserve, it was noted that: “Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.” The statement concluded by providing guidance on future decisions: “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.” In the first quarter, market participants pushed back their expectations for the first interest rate cut from March to June 2024, and the total amount of 25bp interest rates cuts in 2024 from six to three.

The European Central Bank (ECB) last met on March 7th and held their interest rates unchanged. In their subsequent press release it was noted that in the Eurozone, “Although most measures of underlying inflation have eased further, domestic price pressures remain high, in part owing to strong growth in wages.” The statement continued by stating that, “The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.” At the end of March, market participants believe that the Eurozone has likely hit peak interest rates with prospective cuts starting in their June meeting.


Global equities were higher in March. Domestically, all sectors of the S&P 500 posted gains with Energy returning 10.6%. Consumer Discretionary lagged other sectors but still returned 0.1% for investors in March.

The S&P 500 Index rose by 3.2% in March. The blue-chip Dow Jones Industrial Average rose by 2.2%. The tech heavy NASDAQ Composite rose by 1.9%. International stocks were higher with the MSCI All Country World Index of developing and developed market stocks rising 3.2% in March. The MSCI Emerging Market Index rose by 2.5% in March. The MSCI EAFE Index of developed international equities rose by 3.3% in March.


On March 28th, fourth quarter U.S. GDP was revised modestly higher and detailed quarter-over-quarter economic expansion at an annualized rate of 3.4%, well above initial market expectations of 2.0%. The strong report was supported by continued robust personal consumption metrics.

At the March FOMC meeting the Fed released an update on their Summary of Economic Projections which details the central bank’s outlook on a variety of prospective economic measures. Specifically, investors digested more robust 2024 GDP projections paired with inflation estimates that remained above the Fed’s 2.0% target.

During the month of March term points in the U.S. Treasury curve were largely unchanged. Specifically, the U.S. Treasury 2-year yield was flat month-over-month at 4.62% with the 10-year falling 5 basis points to 4.20%. The results of these changes netted a more inverted curve with the 2/10 inversion expanding to 42 basis points.

Mortgage Rates moved slightly lower in March as the Freddie Mac 30-year Primary Mortgage Market Survey fell to 6.79% on March 28th, down 15 basis points from February 29th.