The Weekly Economic Update

Alexis DuffyNewsroom

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In this week’s recap: Shutdown looms, Fed pause with a “clause”

Presented by The PensionmarkMeridien Team, September 26, 2023

As expected, the Federal Reserve kept interest rates unchanged last week at its September meeting. The overall outlook shared, however, was one of higher rates for longer1, with perhaps one or two more hikes this year.

In the short-term, U.S. stock market indexes didn’t show much love in response to the hawkish-sounding Fed, as theS&P 500 fell by 2.93%2, the Nasdaq 100 traded lower by 3.30%3, and the Dow Jones Industrial Average decreased by 1.89%4 for the week.


At the September meeting, the Federal Reserve delivered a more sobering message than many had hoped for. Essentially, the message was that the Fed would keep rates unchanged this time (i.e., a pause), but that it ultimately predicts higher rates for longer (i.e., the “clause”).

The Fed also indicated that rates will likely remain “high” further into next year5 than it had previously anticipated.

In the Fed’s Summary of Economic Projections (SEP6), division among voting members was apparent, with 12 out of 19 Fed officials favoring one more rate hikes this year.


Leading up to and continuing after the conclusion of the Fed meeting, Treasury yields rose.

The benchmark 10-year note, used as a barometer for mortgage rates and many other products, rose by around 11 basis points last week; it closed the week near 4.439%7 after notching its highest level since 2007.8

Two-year yields and other short-term duration Treasuries also rose last week, with the two-year note yield hitting a 17-year high9 near 5.197% last week; it settled near 5.114%10 for the week.

Yields at present levels may present viable opportunities for certain investors. And it’s not just Treasuries – municipal bonds11 and high-quality corporate bonds are also becoming attractive.


The next government funding deadline of Oct. 1 is looming and will surely be in the headlines all this week. Lawmakers have differing opinions on funding and spending cuts.

It seems that the uncertainty of a potential shutdown started to be priced into financial markets last week, and we will see what this week brings.


Let’s face it – we have had a pretty smooth ride in the markets for 2023 so far, especially given the rising interest rate environment. 

S&P 500 Volatility, as measured by the $VIX index, has been subdued for an extensive period, matching 2020 lows, even at the start of last week. That means investors were not expecting market volatility and were perhaps overly complacent given the headline risks and current environment. 

Last week, however, S&P 500 Volatility ($VIX) woke up and rose around 24.57%12, as the S&P 500 experienced its worst week since March.13

Rising rates, a looming government shutdown, and a higher-for-longer Fed narrative were likely all partial contributors to the rising volatility. 


Things won’t always be all about the Federal Reserve and inflation. But for now, the Fed meeting and subsequent commentary are front-and-center for the markets this week.

The recent mixed, yet higher inflation data is certainly a deviation from what we have seen over the last year. Perhaps a rise was to be expected, given interest rates have remained firm even as we’ve gotten more tame inflation prints over the last year or so.

Regardless, we will keep our eyes on the Fed this week, looking for any clues or direction on future policy.

In the meantime, if you have any investing questions or needs, don’t hesitate to reach out by phone or email.

We are always happy to be a resource for you.

The PensionmarkMeridien Team may be reached at 866-871-9963 or

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Pensionmark® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

1.            CNBC, September 20, 2023
2.            Trading View, September 24, 2023
3             Trading View, September 24, 2023
4.            Trading View, September 24, 2023
5.            PBS, September 20, 2023
6.            Federal Reserve, September 20, 2023
7.            Trading View, September 24, 2023
8             CNBC, September 21, 2023
9.            Nasdaq, September 20, 2023
10.         Trading View, September 24, 2023
11.          Advisor Hub, September 21, 2023
12.         Trading View, September 24, 2023
13.         Investopedia, September 22, 2023

Pensionmark® Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark® is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).