Fed Funds Rate Watch

Market Memo

December 2023 – By Bob Veres

Most of the investing world is a bit weird about the Federal Open Market Committee meetings, which is where the nation’s central bank announces its latest interest rate policy.  The announcement concerns the overnight borrowing rate for banks that need short-term financing if they run (temporarily) short on liquidity.  The idea is that if the Fed raises or lowers this rate, then interest rates throughout the economy will bounce up or down accordingly, raising or lowering the cost of financing for America’s corporations and potentially leading to recession (and lower stock prices) or economic prosperity (and higher stock prices).

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Barely Reported Growth

Market Minute

December 2023 – By Bob Veres

It’s surprising that this isn’t getting more attention in the press, but the U.S. Commerce Department has reported that the American economy grew by a remarkable 5.2% annualized pace in this year’s third quarter.  Corporate profits were up 4.3% for the quarter, following a somewhat anemic 0.8% gain in the second quarter.  Consumer spending rose 3.6%, and the next report could top that, based on record-setting sales reported on Black Friday and Cyber Monday.

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