This Weekly Financial Markets Update reviews the top market headlines: Federal Reserve Holds Policy Rate Steady, U.S. Economic Growth Solid but Slower in Q4, Home Prices Advance at Steady Pace in November
  • The Federal Reserve left the federal funds target rate range unchanged at 4.25%-4.50%
  • U.S. GDP rose at an annual rate of 2.3% in the fourth quarter of 2024
  • Home prices in the U.S. increased 4.3% in November versus the prior year

Top Three Market Headlines

Federal Reserve Holds Policy Rate Steady: The U.S. Federal Reserve last week voted to maintain its benchmark policy interest rate, the federal funds rate, at a range of 4.25%-4.50%. This was the first meeting at which the Fed left the target rate unchanged since reducing it by one percentage point over the three previous meetings from September to December. In supporting their decision, officials stated that that U.S. economic activity has continued to expand at a solid pace but inflation remains somewhat elevated. Looking forward, Fed Chair Jerome Powell stated that the central bank does not need to hurry to adjust its policy stance.

U.S. Economic Growth Solid but Slower in Q4: The U.S. Bureau of Economic Analysis reported last week that real (inflation-adjusted) U.S. gross domestic product (GDP), a measure of the total goods and services produced within the economy, rose at an annual rate of 2.3% in the fourth quarter of 2024. This was the third straight quarter of 2%+ growth, though the pace was down from the Q3 reading of 3.1%. Continued strength in consumer spending accounted for the bulk of the growth in Q4. For the full year, real GDP increased at a 2.8% pace, keyed consumer spending, business investment, and government spending.

Home Prices Advance at Steady Pace in November: U.S. home prices rose in November at similar monthly and annual rates as those recorded in the prior month. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index increased at a 0.4% monthly pace, equal to the prior month, while the annual rate of growth ticked up to 4.3% versus 4.2% in October. This was the first time in nine months that the annual growth rate accelerated from the prior month. Prices rose over the prior year in 19 of 20 metropolitan markets, led by New York (+7.3%), Chicago (+6.2%), and Washington D.C. (+5.9%).

As of January 31, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -0.44% 3.36% 3.36% 20.72%
S&P 500 -0.99% 2.78% 2.78% 26.38%
Russell 2000 -0.86% 2.62% 2.62% 19.09%
MSCI EAFE 0.80% 5.26% 5.26% 8.65%
MSCI Emerging Markets 0.32% 1.79% 1.79% 14.75%
FTSE NAREIT Equity -0.52% 1.04% 1.04% 14.62%
Bloomberg Commodity -1.02% 3.95% 3.95% 9.11%
Bloomberg U.S. Aggregate 0.44% 0.53% 0.53% 2.07%

US Federal Reserve 1/29/2025, S&P Global 1/28/2025, U.S. Bureau of Economic Analysis 1/30/2025. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.