Welcome to our latest Quarterly review and update. The big news for this quarter was the FOMC (Federal Open Market Committee) led by Jerome Powell lowering short term/overnight rates .25% or 25 basis points.
Tough Spot to be in – FOMC
The lowering of the federal funds rate, think checking account and money market was completed on the basis of slowing employment numbers. In his televised question and answer after the pre-written speech, Powell admitted the economy is in an interesting place and the FOMC is uncertain about where we are in the business cycle. The Consumer Price Index a.k.a. CPI – the bluntest of instruments measuring inflation, continues to increase; If our research team is correct toward a 3%+ range by year end, well above the FOMC 2% current target. As we have written on our blog at www.street-cents.com, lowering rates, all other things equal, would be a stimulus to the economy, which would drive the CPI even higher! – Confused yet? Tough positions to be in for the FOMC.
Longer term Interest rates, in part by all the above statements, began climbing in terms of rate, such as the 10 and 30 year – putting pressure towards higher mortgage rates. For the record, we do see this changing as the calendar turns, but we are far from that at this time.
Climbing a wall of worry
Markets, just like the little engine that could, after freaking out in the first quarter of the year, continued their form of chugging along, some might even say chugging too quickly. Across the pond, after long being left at the starting line, mostly due to the dramatic decline in the dollar has put the wind in the sales of almost all International Markets, another good reason to have a toe in various pockets in the world.
To the Finish Line
The last quarter of the year, can seasonally be positive, we hope this continues to be the case, but rely less on seasonality and more on data as it comes in. No matter the trajectory, we look forward to the next quarter and only hope it may go a little bit slower as the year has flown by so far!
Talk at the end of 2025!
John A. Kvale CFA, CFP
AI Content Authenticity: AI created the splash image. All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
