Markets, as measured by the S&P 500, snapped two consecutive weeks of declines to post their strongest week in over a month. Comments by Congressional leaders as well as a key figure in the Trump administration helped drive returns.

On Monday, Senate Leader Mitch McConnell said there was “zero chance” that the debt ceiling wouldn’t be raised in September. His comments were in response to remarks by President Trump that he would be willing to risk a government shutdown in order to secure funding for a border wall with Mexico.  On Tuesday, House Speaker Paul Ryan said that tax reform should prove to be easier than health care reform because Republicans have already built consensus on the issue. On Friday, Gary Cohn, Director of the National Economic Council stated that he believes tax reform will pass this year.  Small cap stocks in particular benefitted from the statements.

Global central bankers gathered in Jackson hole on Friday for their annual symposium.  Investors hoped that speeches by Fed Chair Janet Yellen and European Central Bank (ECB) President Mario Draghi would provide insight on important policy issues facing both banks.  Instead, Yellen and Draghi focused their remarks on other topics; Yellen on the importance of financial regulation and the dangers of excessive de-regulation, and Draghi on the importance of free trade and the importance of making it more inclusive.  On the heels of Draghi’s comments, or more specifically, because Draghi did not address the timing of the ECB’s bond buying program, the Euro hit a 2.5yr high.  That in turn, had the inverse effect of pushing the dollar down to its lowest level since January 2015.  As a reminder, the Euro accounts for over 57% of the dollar index.