Economic data was strong, and the Fed has become more hawkish.

The Advance Report for fourth quarter Real GDP was much stronger than expected. Growth was reported as having increased by 6.9%, well above the consensus forecast of 5.5%. Personal consumption expenditures grew by 3.3%, up from the 2.0% growth in the third quarter. The big surprise was the $173.5 billion growth in inventories after three consecutive quarters of inventory declines. The growth in consumer spending was in the services sector, which grew by 4.7%. Spending in the goods sector only increased by 0.5% for the quarter. The increase in service spending took place in the first two months of the quarter before the surge in the omicron virus.