As we look back to the first quarter of 2024, which for the record went by at warp speed, a few items stand out in our minds. We also have reminders for later in the year, with specific reminders of bantering headlines.
Have you ever heard that phrase “The smartest guys in the room?”
The straightforward version of this in Capital Market speak are the bond guys. Bond guys are known as the smartest guys in the room because they only have a few things to think about period. 1) The possibility that they’re going to get paid back their interest payments 2) The risk of them receiving their principal back and 3) The term or time until they get paid back.
The good thing about these “smart” guys is they dictate interest rates. U.S. Government debt/treasuries are one of the safest assets in the world which takes several of these prior concerns off the table, thereby making the bond guys job even easier. Back in the fourth quarter of 2023 these smart guys bid the prices of bonds up, pushing rates down sharply.
Fast forward to today and the smart guys are selling bonds, pushing rates up albeit slowly but they are retracing a large move. Part of the reason these interest rates have gone up is because the economy is like a little red engine that could, and will not slow, While this puts pressure on refinancing and mortgage rates as well as corporate refinance or loan rates, this is good news as savers as safer money will continue to pay us more.
Political Season Cometh
While not in full force yet the political engine is certainly about to start up as we hit the fall presidential elections. We would not to take super seriously possible new laws that are mentioned until they’re actually written and passed. There will likely be some disturbing thoughts voiced, but until law, they do not concern us.
We will obviously talk heavily about this type of information and other, in our shorter and more playful venue, www.street-cents.com which we hope you are now receiving every Monday Wednesday and Friday at 10:30 AM central time.
Thanks for your time!
Sincerely,
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
