Last week’s economic landscape was shaped significantly by the Federal Reserve’s latest Federal Open Market Committee (FOMC) meeting.

The Fed opted to hold interest rates steady and announced a slower pace of balance sheet reduction—moves that were initially welcomed by the markets. However, investor optimism was tempered by the Fed’s statements signaling ongoing inflation concerns and the expectation of only 0.5% in rate cuts for the remainder of the year. This cautious tone added to market volatility. Additionally, initial jobless claims rose to 223,000, slightly below expectations but still notably higher than in previous weeks, pointing to potential labor market softening. The Conference Board’s Leading Economic Index (LEI) also declined by 0.3% in February, a signal that broader economic conditions may be deteriorating.

Looking ahead, key economic reports are set to define next week’s market tone. The spotlight will be on the fourth quarter GDP, which showed the U.S. economy growing at an annualized pace of 2.3%, down from 3.1% in the third quarter. Additionally, durable goods orders are projected to decline by 0.7% after an unexpected increase in January, reflecting the impact of rising tariff concerns. The core personal consumption expenditures (PCE) index, closely watched by the Fed, is anticipated to rise by 0.4%. Meanwhile, personal spending and income data are expected to show a slight decline, adding to concerns over the economy’s resilience.

Given this economic backdrop, let us see how this impacts the performance of various investment strategies.