Impact of Recent Market Behavior on Macroeconomic Outlook

Recent weeks have seen the market behave more rationally, with an easing of financial conditions driving an uptick in inflation prints and retail sales. However, the Fed faces challenges with interest rates above wage growth, potentially leading to a slowdown in nominal growth. The easing financial conditions have fueled an exuberance that may now be receding, with signs of slowing nominal growth in luxury goods sales and trucking activities.