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Fed Uncertainty Grows. The S&P 500 went into a bear market, declining more than 20% from its peak. The 10-year Treasury yield jumped over a percentage point this quarter, reaching as high as 3.5%. Bond returns were also negative, as...

• The Federal Reserve hiked interest rates by 0.75% for the first time since 1994 to slow inflation. • A Fed policy error could push the economy into a recession. • The initial reaction from markets was positive, but volatility returned

• Market sell-off continues as investors sell both stocks and bonds. • Fed comments after their meeting this week are very important for market direction. • Given negative market sentiment, room for positive surprises grows.

The broad-market S&P500 index closed out Friday down 13.3%, representing the worst four-month period to start a calendar year since 1939, when it declined 17.3%

• Volatility is rising again after a pause in late March. • Headwinds for markets include Fed uncertainty, slowing earnings, and the lockdown in China. • Despite these risks, we view the downside as limited from current levels.