The Federal Open Market Committee (FOMC) held the federal funds rate at 3.50% to 3.75% on April 29, an outcome consistent with expectations but accompanied by data that complicated the path forward for both investors as well as the FOMC. The decision produced the most divided vote since 1992. One policymaker favored a cut, while three dissented because they opposed maintaining language that implied future easing bias.  

This week’s data included the advance estimate of first quarter gross domestic product which indicated the US economy growing at a 2.0% annualized rate, a sharp rebound from the 0.5% pace in the fourth quarter, supported by a 1.6% gain in personal consumption. The March Personal Consumption Expenditures (PCE) Price Index, rose 0.7% month-over-month and 3.5% year-over-year, capturing the energy spike from the Iran War disruption. Meanwhile core PCE, the Federal Reserve’s preferred inflation gauge, was more contained at 0.3% month-over-month and 3.2% year-over-year. Personal income advanced 0.6% and personal spending rose 0.9% in March, both stronger than expected. The first quarter Employment Cost Index accelerated to 0.9% from 0.7%, reinforcing the wage component of inflation. Initial jobless claims fell to 189,000 for the week ending April 25, while the April Institute for Supply Management (ISM) Manufacturing Index held at 52.7 and the ISM Prices Paid component jumped to 84.6 from 78.3. 

U.S. equities extended their rebound, with the S&P 500 trading at approximately 7,258 at the time of this writing, a gain of approximately 1.8% on the week and a fresh all-time high that surpassed the prior peak in late January. Treasury yields rose modestly as the firmer growth and inflation data pushed back against expectations for near-term easing, with the 2-year U.S. Treasury yield at approximately 3.88% and the 10-year at approximately 4.37%. West Texas Intermediate crude oil eased from approximately $105 per barrel earlier in the week to approximately $101 as ceasefire negotiations between the United States and Iran progressed. Gold pulled back to approximately $4,631 per ounce as the dollar firmed and risk appetite improved. 

The Chandler team views this week’s data combination of first quarter Core PCE jump to 4.3% and the April surge in ISM Prices Paid as key factors supporting our outlook regarding the timing of the next Federal Reserve move. We continue to expect the federal funds rate to remain on hold at 3.50% to 3.75% through our six-month forecast horizon, with a 25-basis point reduction possible by year end contingent on energy costs normalizing and core inflation resuming its decline. We expect the yield curve to steepen gradually under the assumption that policy eventually turns accommodative as we navigate this uncertain market and upcoming leadership transition with Federal Reserve Chair Powell’s term ending May 15th. Portfolios remain positioned with an emphasis on safety, liquidity, and disciplined credit risk management

Next Week: Factory Orders, Durable Goods Orders, S&P Global U.S. Services PMI, ISM Services Index, New Home Sales, Trade Balance, Job Openings and Labor Turnover (JOLTS), MBA Mortgage Applications, Initial Jobless Claims, Continuing Claims, Wholesale Trade, Consumer Credit, ADP Employment Change, Employment Report, University of Michigan Consumer Sentiment. 

© 2026 Chandler Asset Management, Inc. An SEC Registered Investment Adviser. Data source: Bloomberg, Federal Reserve, and ADP. This report is provided for informational purposes only and should not be construed as specific investment or legal advice. The information contained herein was obtained from sources believed to be reliable as of the date of publication, but may become outdated or superseded at any time without notice. Any opinions or views expressed are based on current market conditions and are subject to change. This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as an indicator of future results. Past performance is not indicative of future results. This report is not intended to constitute an offer, solicitation, recommendation, or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest rate, credit, and market risk. Interest rate risk: The value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low-rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market, in general, could decline due to economic conditions, especially during periods of rising interest rates.