Weekly Market Commentary March 23, 2026
Week in Review
Over the course of the week, markets digested a variety of U.S. economic releases as well as the Federal Reserve meeting. Investors focused on the durability of economic growth amid persistent inflation risks.
The focal point of the week was the March Federal Open Market Committee (FOMC) meeting, where the Federal Reserve held the federal funds target range unchanged at 3.50%-3.75%. However, the tone of the meeting was more hawkish and both headline and core Personal Consumption Expenditure (PCE) inflation forecasts were raised to 2.7%. Fed Chair Jerome Powell acknowledged that inflation progress has been slower than expected among elevated uncertainty stemming from energy prices and geopolitical tensions.
The February Producer Price Index (PPI) rose 0.7% month-over-month, well above consensus expectations and accelerating from January’s 0.5% increase. For investors, this reinforced concerns that inflation pressures remain persistent at the wholesale level. Core inflation also remained firm, rising by 0.5% over the month. This is closely watched by policymakers as an indicator of more durable inflation pressures that may eventually pass through to consumer prices.
Manufacturing data showed renewed momentum. The Philadelphia Fed Manufacturing Index rose to 18.1, well above expectations. This gain was driven by a sharp rebound in shipments, with new orders easing but remaining positive. Forward-looking manufacturing expectations remain elevated, highlighting ongoing optimism even as cost pressures and global uncertainties increase.
Housing data provided mixed signals. Residential construction improved as housing starts rebounded, driven primarily by an increase in multifamily projects. On the other hand, single-family construction remained subdued due to ongoing affordability constraints and elevated mortgage rates. New home sales also fell sharply to an annualized pace of 587,000 units, the lowest level in more than three years. This slowdown reflects the continued strain on housing demand due to affordability challenges and volatile mortgage rates.
Labor market data showed signs of stabilization. Weekly initial jobless claims fell to 205,000, the lowest reading since January. This supports the view of a labor market characterized by limited hiring and limited layoffs. Continuing claims remain subdued, indicating that layoffs remain contained even as hiring momentum eases.
Click HERE to read more.