May 2023 Market Update

We’ve highlighted our theme of persistent heightened market volatility in many of our market reviews this year and May continued to deliver on that premise.

Key Observations

• Market volatility persisted in May as investors try to digest potential Fed policy action in June and the possibility of a U.S. default should a deal not be reached to raise the debt limit.

• Significant progress toward a debt ceiling agreement was made in eleventh hour of the month.

• Most market indexes posted negative returns, with limited bright spots in growth-oriented segments.

• Short-term rates remain higher than long-term and the U.S. yield curve remains inverted. Cash rates look attractive, but tactically timing the market based on yield ignores other factors when allocating fixed income assets.