Economic Outlook

Growth In Fits And Starts

Over the last year, the U.S. has seen a meaningful contraction, then near 5% growth, and now back to 2%…maybe lower.

Distortions are common in GDP measurement, but, like the last two harsh winters, have become an irritant to many who long for spring, both literally and figuratively. Deep cold and heavy snow last winter, a subsequent catch-up rebound in mid-2014, and now a plethora of temporary negative factors, including yet another trying winter (especially if you live in the Northeast), are creating uncertainty.

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Equity Portfolios

Investors Lack Conviction, Favor Skepticism, Yet Stocks Continue To Perform

The factors, temporary and otherwise, described in the “Economic Outlook” section of this publication continue to disappoint those looking for a clear sense of market direction, although the data does not reveal any particular change in price volatility, which remains below normal.

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Fixed Income Portfolios

Fed Not Rushing To Higher Interest Rates

As expected, the Fed dropped “patient” from its March FOMC statement on future increases in interest rates. However, Chairman Yellen made it clear that the Fed is still “data dependent” and that it hasn’t necessarily become impatient. Due to concern that U.S. growth may be held back by slower global growth and possible deterioration of exports as a result of a strong dollar, we might see the Fed remain dovish, particularly as to the pace (rather than initial timing) of rate increases.

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