Recent Insights
There is an Election This Year
Since 1928, the S&P 500 Index averaged an annual increase of 11% (dividends were reinvested). The index finished the year higher 73% of the time, according to data provided by the NYU School of Business.
Waiting on the Long-Awaited Soft Landing
Some analysts have been warning for quite some time that Fed rate hikes will slow economic growth. Whether it results in a soft landing, which is the preferred outcome for investors, or a hard landing (recession), the rate hikes would be expected to blunt economic activity, at least to some degree.
Lessons from the 1960s
Fed Chief Jay Powell, along with other Fed officials, have been open about discussing the lessons they learned and the errors made during the 1970s.
Fitch Strips USA of Triple-A Credit Rating
Fitch said its decision “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden,” and repeated political brinkmanship surrounding the debt ceiling debates.
Reports of Housing’s Demise are Greatly Exaggerated
The 30-year fixed mortgage averaged 3.04% in 2020 and 2021, according to Freddie Mac’s weekly survey. The 15-year rate: 2.44%. Housing money was almost free…almost. Through June 22, the average 30-year fixed rate was 6.43%, a substantial increase.
Crosscurrents
What happens when an immovable object runs into an irresistible force? In today’s investing world, the Federal Reserve has been that immovable object, jacking up interest rates in order to quell inflation. For now, the Fed is betting it can keep its attention on inflation while using other tools to support banks that are in need.
Hiccups in the Job Market
The Federal Reserve was established in 1913 in response to the Panic of 1907. It was initially designed to address bank panics. Its initial purpose was to lend when no one else was willing. But recent events are a reminder that confidence is the cornerstone of the financial system. We place funds in banks because we expect immediate, unfettered, and full access to those funds.