Jerome Powell will begin his term as chair of the Federal Reserve (Fed) on February 3, following the Fed’s upcoming January 30–31 meeting. He is largely expected to follow a similar monetary policy blueprint as outgoing Chair Janet Yellen, with balance sheet normalization continuing as previously scheduled and a gradual path of data-dependent rate hikes. With Powell’s confirmation, and Yellen’s upcoming exit, President Trump will have three remaining posts to fill on the Fed’s seven-member board of governors (assuming the previously nominated Marvin Goodfriend is confirmed as expected).

Deregulatory

The U.S. dollar was in the news recently after comments from Treasury Secretary Mnuchin, European Central Bank (ECB) President Draghi, and President Trump created volatility in the world’s reserve currency. Mnuchin indicated that a weak dollar could benefit the United States as it relates to trade and opportunities. Draghi said that a strong euro (and by extension a weaker dollar) is understandable given strong European growth, but he also raised concerns that if other countries start targeting specific currency levels, it could have an impact on the ECB’s ability to meet its inflation goals. Trump then followed up saying that he

The equity market action over the past year is truly historic on many levels. It is important to recognize how unique this time frame has been and that a more volatile 2018 may be likely, and quite frankly normal. This week we will highlight some of the amazing streaks that have taken place, list a few of the reasons why we should anticipate a pickup in volatility, and explain how any possible weakness can provide suitable investors with an opportunity in diversified portfolios.

How Rare Have Things Been?

Below are five S&P 500 Index observations to illustrate just how unique the recent market activity has been:

1. The

The 10-year Treasury yield has seen a strong move higher since September 2017, and recently surpassed its March 2017 post-election highs. A combination of higher global rates (driven by more hawkish central bank expectations), rising growth expectations due to tax reform, and an increase in inflation expectations have been the major forces driving rates higher over the past several months.

Rising rates have hurt bond prices over this period, with the Bloomberg Barclays U.S. Aggregate Treasury Index seeing a loss of 2.3% since the 10-year Treasury yield bottomed on September 7, 2017. The broader bond market has also been affected,