The articles below offer general information, opinions, and forecasts and should not be considered advice.
Market Memo
July 2022 – By Kyle Rohrwasser
In last month’s memo, I quoted Jerome Powell; he stated in May that the Federal Reserve (Fed) would not raise the federal funds rate higher than 50 basis points in June, but they moved it to 75 basis points after a higher-than-expected inflation number. This time around a 75-basis point rate hike is locked in but a 100 (1%) basis point move is still on the table.
Continue readingJune 2022 – By Kyle Rohrwasser
Last month, Federal Reserve Chair Jerome Powell put any mention of a 75 basis point hike to bed, implying that they would not move too quickly. However, after the June 10th inflation report came in higher than expected (8.6%), the idea of a 50-point hike seemed like nowhere near enough. In a sign that the Fed is serious about fighting inflation, and willing to pivot quickly as the economic data changes, the Federal Reserve hiked the Federal Funds rate 75-basis points (0.75%). In addition, they also updated their estimates projecting a year-end Federal Funds rate of 3.4%, substantially higher than initial projections of 1.9% made in March.
Continue readingJune 2022 – Scott Rosenquist, CFA®
The consumer price index (CPI) for the month of May came in higher than expected. The headline number was up 8.6% over the last year showing the largest increase in decades as price increases were broad based with gas, food and shelter contributing the most. Investors were looking for signs of inflation peaking but will have to remain patient as economic conditions continue to tighten. The Federal Reserve has signaled several interest rate increases over the coming months while also starting to reduce the size of their balance sheet. This process will take time to filter through the economy although the market has anticipated this and reflected across several financial asset classes. The Federal Reserve meets this week and investors are looking to see if they act more aggressively than previously signaled to combat rising prices.
Continue readingMarket Memo
May 2022 – By Kyle Rohrwasser
The war in Ukraine continues as governments look toward a slowing global economy with continued inflationary pressures. News outlets have decreased their war coverage, but the conflict and its economic impact remain real. European countries have seen rising energy prices and COVID lockdowns in China have added to supply chain woes. In the United States, we feel these effects domestically through rising food and gas costs mainly. Based on the rising value of the dollar to other currencies, it implies that we are in better shape than most other economies.
Continue reading