The Fed's decision and speech (see chart #2) do not seem to have reassured the financial markets. The S&P 500 index fell by 2.9% over the week. This is the third consecutive negative week and the worst weekly performance since March. Is the "head and shoulders" configuration of the S&P 500 beginning to take hold?

As expected, the US Federal Reserve decided to leave interest rates unchanged, keeping the benchmark rate within the target range of 5.25% to 5.5%. 
12 Fed members are forecasting a further rate hike at upcoming meetings, while 7 members are no longer forecasting one. The dot plot of rate projections shows that US monetary policymakers are still expecting another rate hike this year. Also, the rate projections for 2024 and 2025 have all risen by half a percentage point, indicating that the Fed expects rates to remain higher for longer.
The Fed is forecasting inflation of 2.6% in 2024. The median projection for economic growth in 2023 is raised from 1% in June to 2.1%; officials significantly cut unemployment forecasts and now expect the unemployment rate to peak at 4.1%, rather than 4.5%. It should be noted that the Fed acknowledges that job creation has "slowed» but affirms that it "remains strong".

Following the Federal Reserve's decision, bond yields on US Treasuries continued to rise. US 2-year yields reached its highest level since July 2006, US 5-year yields its highest since August 2007, 10-year yields its highest since November 2007 and 30-year yields its highest since April 2011.

The PIMCO 25+ Year Zero coupon US Treasuries ETF ($ZROZ) is down 60% since its March 2020 high. At the height of the Covid crisis, 30-year US Treasury yields were at an all-time low of 0.8%. Today, yields on similar maturities are 4.6%. This sharp rise in yields combined with the very long duration of these bonds explains the sharp fall in this ETF.

The SNB left its key rate unchanged at 1.75%, thwarting market expectations of a further 25 basis point rise.
Underlying this decision are the slowdown in inflation, the extent of the monetary policy tightening already implemented (short-term Swiss franc rates were still negative a year ago) and the growing risks surrounding the global outlook.
Indeed, with inflation in line with the SNB's target (1.6%, within the 0%-2% range), economic activity slowing (0% GDP growth in the second quarter of 2023) and the Swiss franc remaining firm, the case for further tightening had become much less convincing in recent weeks. Unlike the ECB, which was forced to raise rates the previous week because inflation was still well above its target, the SNB had very good reasons to pause and adopt a cautious stance. However, the SNB is not ruling out further hikes in the future, if necessary. 

The number of bankruptcies is definitely on the rise, and this is a global trend. While the rate hike cycle is not having any effect on large caps for the time being, smaller companies are much more affected.

Cisco is buying cybersecurity software vendor Splunk for $157 per share in a cash deal worth around $28 billion, the company announced on Thursday. It is the largest acquisition in the company's history. The chart below shows how this acquisition ranks among the largest in the history of the technology sector.