Economic News:
The Federal Reserve left interest rates unchanged at 4.25% to 4.5% following its June policy meeting, marking the fourth straight meeting with no change, and noted that while uncertainty has diminished, it remains elevated. Fed Chair Jerome Powell emphasized that the economy is in a solid position and the Fed is prepared to respond to future developments. The Fed’s updated Summary of Economic Projections maintained expectations for two rate cuts later this year but reflected rising forecasts for inflation and unemployment by the end of 2025, along with a downward revision to GDP growth. Comments from Fed Governor Christopher Waller on Friday suggested rate cuts could begin as early as July, offering some early support to equity markets. Meanwhile, economic data released during the week was generally weaker than expected, with May retail sales falling 0.9%, driven by a sharp drop in auto sales, though core retail sales rose 0.4% on strength in sporting goods and furniture. In housing, the NAHB’s Home Builders Index dropped to 32 in June—its lowest since December 2022—indicating worsening sentiment amid high mortgage rates and economic uncertainty, while housing starts plunged 9.8% to a five-year low of 1.26 million annualized units in May.
What We’re Showing:
Over the past five years, asset classes have experienced significant shifts, influenced by global events and economic policies. This infographic illustrates the annual performance of major asset classes from 2020 to 2024, highlighting the volatility and resilience across different assets during this period.
The data, sourced from Bilello.blog, provides a comprehensive overview of annual returns for various asset classes between 2020 and 2024.
Key Insights:
Bitcoin experienced a remarkable surge of 301% in 2020, driven by rising investor interest in cryptocurrencies. Despite a significant drop of 65% in 2022, it rebounded with gains of 156% in 2023 and 121% in 2024, showcasing its unprecedented volatility and return potential.
Gold demonstrated resilience, particularly in 2024, with a 26.7% increase, as investors sought safe-haven assets amid falling interest rates and geopolitical tensions. Its performance highlights gold’s traditional role as a store of value during periods of economic instability and market volatility.
US equities, represented by the S&P 500 (SPY), showed strong performance in 2021 and 2023, with gains of 28.7% and 26.2% respectively. However, 2022 saw a significant decline of 18.2%, setting a record for the biggest annual drop since 2008.
2025 has been another rocky year so far due to escalating tariff threats. When focusing on the first 73 trading days of a year, 2025 is the S&P 500’s fifth worst year in history.