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
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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.
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Significant progress toward a debt ceiling agreement was made in eleventh hour of the month.
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Most market indexes posted negative returns, with limited bright spots in growth-oriented segments.
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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.