Federal Reserve Meeting

The biggest part of the week is the Federal Reserve’s meeting and what their announcement will be. It’s not what they are going to do, which is likely raise rates, but what they will say that is very important. The Fed right now, in our opinion, is the most likely driver of the next recession. The economy is growing strong right now. However, the Fed does have a history of stopping the party when no one asks them to, so to speak. The fear is not that a rate increase will push us into recession right now but what they will talk about over the next year. Will they raise rates to the point where it hinders the economy? Will they hinder borrowing? Will they increase short term rates over long term rates with the inverted yield curve? These are the questions we are interested in. It’s also important to note that housing starts are at a high of this current expansion. The rise and fall of housing starts are good indicators that we could go into a future recession. People will stop buying houses if interests rates increase because they aren’t interested in paying a higher mortgage. Currently interest rates aren’t impacting this but you could see it in the future if the rates continue to climb.

Treasury Bonds

The 10-year U.S. Treasury almost made a record high last week. The high was 3.11% and we made it to 3.10%. That matters because it is a key indicator of investor confidence going forward for people investing their money long term. That’s one more indicator on top of the tariff news that you’re hearing. If the long ends keep going up it gives the fed a lot of room to increase the short end.

 

Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here

Ashley Page, JD, MBA
Senior Vice President
Wealth Consultant
Email Ashley Page here

Trey Booth, CFA®, AIF®
Senior Vice President
Wealth Consultant
Email Trey Booth here

Adam Vansant
Associate Vice President
Wealth Consultant
Email Adam Vansant here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

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