- Investors balanced the economy's resiliency against the prospect of forceful policy measures to limit inflation as equities in the US rose in a broad-based advance. Treasury rates rose throughout the curve, but oil prices dropped due to supply concerns.
- With the exception of energy, the S&P 500 rebounded from its lowest closing in more than a month, with all 11 major industrial groups rising. The tech-heavy Nasdaq 100 index surged more than 2%, surpassing the small-cap Russell 2000 index. The move higher was led by short-end Treasury yields, which are the most sensitive to interest rate movements.
- Fed's Evans stated on Tuesday that interest rates will most likely rise over the neutral level. After Fed's Bullard suggested hikes of up to 75 basis points shouldn't be ruled out, investors reassessed their expectations. The last time there was a significant increase like this was in 1994.
- Housing starts in the US surprisingly surged to their highest level since 2006 in March, according to government data released on Tuesday.
- Supply networks have been disrupted by China's lockdowns, and commodity flows have been disrupted by the Ukraine war, putting pressure on central banks to reign in runaway prices at a time when the global economy is expected to weaken. The IMF cut its global growth projection for the first time since the outbreak's early months and expected much quicker inflation.
- Russian Foreign Minister #Lavrov has announced the start of a second phase of the war in Ukraine, which appears to be going better for Russia than the first.
