Markets react to central banks’ inaction

In this week’s video update:

  • Q1 U.S. GDP barely expands at 0.5% annualized rate; U.S. Federal Reserve keeps interest rates flat
  • Eurozone key economic indicators come in ahead of expectations signaling strength for economy
  • Bank of Japan (BoJ) surprises markets by holding quantitative easing measures steady

Managing Director, Investment Practice Adam Goff joins host Mark Soupiset on this week’s Market Week in Review update. Starting in the U.S., Goff notes that neither the Q1 U.S. gross domestic product (GDP) coming in at a paltry 0.5% or the decision from the U.S. Federal Reserve to not raise interest rates was a huge surprise to the markets, and Russell Investments’ strategists remain optimistic about the U.S. economy’s overall resilience in 2016.

With strong key economic indicators out of the eurozone this week – including 0.6% GDP growth quarter-on-quarter, lower unemployment and no sign of increasing inflation – Goff comments the positive potential for the economy with strong earnings and economic growth and a fairly straightforward path for European Central Bank (ECB) President Mario Draghi’s quantitative easing program.

Concluding this week’s recap, Goff addresses the big surprise from the Bank of Japan (BoJ), which unexpectedly kept its monetary policy steady following potential talks last week that suggested further stimulus. He notes the markets reacted swiftly after the decision as the yen jumped and the Nikkei 225 index slumped.

Be sure to vote in this week’s Twitter poll @Russell_Invest, asking:

Following the weak U.S. Q1 GDP growth of +0.5% released Thursday, do you expect the economy to bounce back, as it has in the past two years, or continue on a weaker trajectory?

  1. Bounce back
  2. Remain weak