American Eagle perched on the Federal Reserve Building

Growth Accelerates but Inflation Keeps Fed on Edge

Financial Commentary
May 4, 2026

By Michael List, CFA, CFP®
Investment Management Officer

 

Last week brought greater clarity on the Federal Reserve, financial markets, and the broader economy. The Senate Banking Committee advanced Kevin Warsh’s nomination to chair the Federal Reserve Board, while Jerome Powell confirmed he will remain on the Board of Governors after his term as chair ends this month. The stock market posted its best month in several years, with earnings season underway.  Finally, economic growth remains resilient but so have inflation pressures.  

Strong Earnings Help Boost Stocks

A strong start to earnings season and accelerating technology spending helped drive the S&P 500 to a 10.4% gain in April—its best monthly return since November 2020. So far, 84% of companies have exceeded earnings-per-share expectations, and 81% have topped revenue estimates. Semiconductors led all industries, with those stocks rising an average of 49% during the month.

U.S. economic growth also improved in the first quarter of 2026, with GDP expanding at a 2% annual rate. While slightly below expectations of 2.2%, this marked a notable increase from 0.5% growth in the fourth quarter of 2025. Business investment was a key driver, rising at a 10.4% annual rate, with much of the spending concentrated in AI-related equipment and hardware. Consumer spending, however, moderated, growing at a 1.6% annual pace compared to 1.9% in the prior quarter.

Inflation Remains Sticky

The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) price index, came in as expected for March. Headline PCE rose 0.7% and core PCE increased 0.3%, pushing year-over-year readings above 3% for both measures. Energy prices were a notable contributor, climbing 21% during the month.

Taken together, these developments suggest a resilient economic backdrop, though the combination of strong growth, elevated inflation, and a new chairman complicate the Federal Reserve’s policy path in the months ahead.   Reach out to your advisor with any questions that may arise. Your success matters to us.

About the Author

Michael List, CFA, CFP®

Michael List is an Investment Management Officer within Security National's Wealth Management Division. Michael earned his Bachelor of Science in Business Administration with a concentration in Finance and Economics from Creighton University and holds the esteemed Chartered Financial Analyst (CFA) and Certified Financial Planner CFP® designations. List helps execute investment strategy, transactional execution and overall portfolio management at the Bank.

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