Equities and bonds rallied again last week on optimism that the Federal Reserve may look to slow its pace of interest rate increases. Utterances from the Fed, payroll data and social turbulence in China  shaped the market narrative last week as we entered December.1

Fed Chairman Jerome Powell indicated we may be seeing smaller rate hikes going forward and noted the Fed has made substantial progress towards more restrictive policy. The markets interpreted his speech as dovish, though it should be noted that Powell stressed that the Fed plans to stay the course until its job is done. We caution investors that inflation does not always decrease in a linear fashion. Powell signaled that he does not want to over-tighten but he also doesn’t plan to cut rates soon. Powell was clear when he stated, “my FOMC colleagues and I are strongly committed to restoring price stability . . . ongoing rate increases will be appropriate . . . to move inflation down to two percent over time2.”

The November jobs report came in stronger than expected just a couple of days after Powell’s speech, which raised concerns about the Fed’s ability to slow rate hikes. The U.S. Labor Department reported that nonfarm payrolls increased by 263,000 jobs last month compared to expectations of 200,000, and average hourly earnings increased 0.6%, up from 0.5% in October. This report caused some market turmoil as investors questioned whether the Fed would be able to follow through on slowing the pace of rate hikes.While we do believe the pace of monetary tightening will slow, we believe it is premature to believe we are in the clear until we see a sustained pattern of dovish data.

Lastly, we are observing the impact of “COVID Zero” policies in China, which have disrupted the global supply chain and weighed on growth. We have not seen such level of national unrest in decades, and this may spur modifications in COVID policy. China is a strong manufacturing hub and driver of global growth, but COVID policies focused on zero cases have disrupted the economy. Already, companies like Apple are considering diversifying their supply chain, which is highly dependent on China. For example, as many as 300,000 workers at a factory run by Foxconn make iPhones and other Apple products, and at one point they created 85% of the Pro lineup of iPhones4.

The range of potential outcomes as we enter 2023 is enormous, and we see this as a compelling market environment that creates significant opportunities in both equities and bonds. We appreciate your trust in navigating these turbulent times and look forward to continued partnership.

Asset Management Department

Sequoia Financial Group



The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

Sequoia Financial

Talk to an Advisor

We would love to chat with you about how Sequoia can help you achieve your financial goals.

  • Akron, OH - Headquarters
  • Tampa, FL
  • St. Clair Shores, MI
  • Troy, MI
  • Beachwood, OH
  • Cleveland, OH
  • Columbus, OH
  • Mayfield Heights, OH
  • Hilton Head, SC

© 2022 Sequoia Financial Advisors, LLC

Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

Markets Buoyed Last Week by Powell Comments | Sequoia Financial Group


The website encountered an unexpected error. Please try again later.