August 2018: Rates Little Changed in Otherwise Tumultuous Month
Even as emerging-market equities plummeted, US stocks rose to new highs in August, with the S&P recording its longest ever bull run and the Nasdaq reaching a new high of 8,000. Corporate profits and the economy continued to grow thanks to tax cuts, stronger manufacturing demand, and higher business confidence. Fed speakers continued their tug of war between advocates of gradual rate hikes and those pushing for a pause. The hawks had the upper hand. The USD strengthened, especially in relation to emerging market currencies, where Fed tightening is now more punitive than in the US.