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The economy has remained resilient through 2026, despite ongoing supply chain disruptions and geopolitical uncertainty. US Real Gross Domestic Product (GDP) expanded in the first quarter, while business-to-business spending climbed to record highs. Consumers are resilient and continue to support economic growth even as prices have accelerated, particularly for energy.

The February jobs report showed further signs of labor market softening, with the economy shedding 92,000 jobs and unemployment rising from 4.3% to 4.4%. Nine of eleven sectors posted job losses, as the figure fell well short of expectations for a gain of 55,000 jobs.

The Federal Reserve cut interest rates an additional 0.25% in December, bringing the target range to 3.5% - 3.75%. Rates are expected to remain between the 3-4% range through 2026 meaning few to no cuts are currently priced in.

Markets continue to make gains following the April lows. International equities continue to outperform year-to-date, supported by the weakening of the dollar.

International markets have provided the highest returns this year, with the MSCI International Index gaining 19.46% and the MSCI Emerging Index up 15.57%. Portfolios that were globally diversified experienced less volatility and higher returns YTD.