facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause
Weekly Market Update with Brian Ransom 6 May 2022 Thumbnail

Weekly Market Update with Brian Ransom 6 May 2022

Welcome to the weekly market update from Signature Wealth Management. I’m Brian Ransom, Research Director from Signature Wealth and here’s what happened in the market this week.

It has been a pretty wild ride in the market these last few weeks. The roller coaster culminated in a series of violent rallies and sell-offs this week. Zooming in a bit closer, we can see the strong sell-off in the middle of April followed by a series of high percentage jumps and crashes. On Wednesday, the market rallied following the meeting from the Fed to raise interest rates 50 bps. The next day, the market fell nearly 4% in one of the worst days for the market since 2020. The low established early this week, however, is yet to be violated.

All financial news this week revolved around the Federal Reserve meeting on Wednesday. The Fed elected to raise interest rates by 50 bps, begin reducing the size of it’s balance sheet by about $30b per month, and ruled out 75 bps increases later this year.

Remember, this whole mess was ultimately caused by an unexpected inflationary environment. The Fed’s primary mandate is to control inflation while growing the economy and it will do whatever it takes to control that inflation. Which includes slowing down the economy, lowering demand, and even increasing unemployment. The Fed can control all those via their Fed Funds rate.

Here is the trajectory of the Fed Funds rate as measured by the Treasury Yield Curve. The Fed intends on increasing short-term borrowing rates until inflation responds positively. But it is very likely that the Fed is capped on the height of that interest rate before the economy starts contracting. Odds are, that cap is probably somewhere around here but no one truly knows. If 2.5-3% on the Fed Funds rate is enough to control inflation then we can start to breath easy. Otherwise, increases above that area will likely increase borrowing costs for businesses, lower profitability, an increase unemployment ultimately resulting in a recession.

For more information on this topic or a variety of other topics including market updates, financial planning, and wealth management please like, subscribe, and follow. Don’t forget to check out our new podcast Up and to the Right! New episodes for Up and to the Right drop on a bi-weekly basis on all your favorite podcasting apps.


1.FactSet Research Systems. (n.d.). S&P 500 (Interactive Charts). Retrieved May 6, 2022, from FactSet Database.

2.FactSet Research Systems. (n.d.). Total CPI (Y/Y %) (Interactive Charts). Retrieved May 6, 2022, from FactSet Database.

3.FactSet Research Systems. (n.d.). US Government Yield Curve (Markets). Retrieved May 6, 2022, from FactSet Database.

Signature Wealth Management Group is registered as an investment adviser with the SEC. Signature Wealth only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.  

Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.  

Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. 

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The federal funds rate refers to the target interest rate set by the Federal Open Market Committee (FOMC). This target is the rate at which commercial banks borrow and lend their excess reserves to each other overnight. 

Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. The use of words such as “will”, “may”, “could”, “should”, and “would”, as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements.

Information is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein.

The S&P U.S. Style Indices measure the performance of U.S. equities fully or partially categorized as either growth or value stocks, as determined by Style Scores for each security. The Style series is weighted by float-adjusted market capitalization (FMC), and the Pure Style index series is weighted by Style Score subject to the rules described in Index Construction.

All information presented prior to an index’s Launch Date is hypothetical (back-tested), not actual performance. The Index returns shown do not represent the results of actual trading of investable assets/securities. S&P Dow Jones Indices LLC maintains the Index and calculates the Index levels and performance shown or discussed, but does not manage actual assets. Please refer to the methodology paper for the Index, available at www.spdji.com for more details about the index, including the manner in which it is rebalanced, the timing of such rebalancing, criteria for additions and deletions, as well as all index calculations.