After a few volatile weeks for the markets, I expect a return to a more normal rhythm over the weeks ahead. The factors impacting both stocks and bonds are firmly in place and should drive market performance in the next few months. My expectation is for stocks to rise and bond yields to increase.
This week, the Federal Reserve (Fed) releases the minutes from Janet Yellen’s last meeting as Fed Chair in January. I expect the minutes to reinforce the continued strength in the economy and set the stage for a Fed rate increase at the March meeting. Look for any surprise language around the inflation outlook and rising deficits.
In addition, we can expect one of the must reads of the year this weekend. Warren Buffett’s annual letter – as part of Berkshire Hathaway’s annual report – is expected this Saturday and will make for some good weekend reading.
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