Laserfiche WebLink
Current Market Themes <br />Source: Details on market themes and economic indicators provided throughout the body of the presentation. Bloomberg Finance L.P., as of March 31, 2026. <br />For the Quarter Ended March 31,2026 <br />Market Update <br />▸Geopolitics has overtaken U.S. macro fundamentals as the market’s primary focus <br />▹Conflict in Iran has increased near-term inflation risks due to higher commodity prices <br />▹Unemployment rate remains stable with net new job creation near zero <br />▹Consumer spending and business investment continue to support growth, though momentum <br />is slowing <br />▸The Federal Reserve paused during both meetings in Q1, keeping rates at 3.50-3.75% <br />▹The median “dot plot” projection continues to show one 25 basis point cut in 2026, though <br />individual projections showed less easing <br />▹Fed Chair Powell acknowledged the path forward is complicated by geopolitical uncertainty, <br />making it more difficult for the Fed to balance its dual mandate <br />▸Rising front-end yields unwound the inversion in the Treasury curve <br />▹Rate cut expectations were pushed further out, lifting front-end yields <br />▹Escalating Middle East conflict drove a spike in volatility <br />▹Credit spreads widened from historically tight levels amid heavy supply and geopolitical <br />pressure <br />CITY OF REDWOOD CITY <br />PFM Asset Management | pfmam.com 11 <br />7.C. - Page 17 of 71 <br />33