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Economic reports for the month of March were generally more positive than expected and led to broad market gains that erased a poor start to the year and pushed major averages into positive territory for the first quarter. Fed Chair Janet Yellen gets an assist as her recent statements on the condition of the economy and indications of a more gradual increase in the federal funds rate were dovish. Yellen also said that the economy “had proven remarkably resilient,” and the Fed expected better days ahead. She maintained the Fed’s position to pursue a careful, patient course toward higher interest rates as the economy improves. The cautious tone of her remarks suggest a rate increase is unlikely at the Fed’s next meeting later in April, shifting the focus to its subsequent meeting in June. The FOMC indicated after its most recent meeting it now forecasts a total increase of half a percentage point, down from the full percentage point increase they predicted at the beginning of the year.

Yellen attributed the deceleration to a judgment by Fed officials that somewhat lower rates were necessary to maintain steady growth.

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