During the Great Recession of 07-09, the FOMC (Federal Open Market Committee) led by then chairman Ben Bernanke, began an unprecedented (at the time), pushing of money into the financial system. Take a peek at the 2008-2009 move upwards in the graph below.
Fast forward to present, and the sequel (usually more dramatic) …. is well, MORE DRAMATIC…. take a look at the horsepower the FOMC is throwing at our current situation…. makes 08-09 look like a mini me version.
Bazooka is fitting!
Interestingly, these funds are finding their way, conservatively into deposits in institutions, which can be seen by the next chart…. oddly, a non banking crisis as compared to the great recession which was definitely a financial crisis has more worried… hence the parking of money into low interest savings rates.
Will be watching to see if this continues or begins to trickle out into the economy … would be very stimulative if it does!
Speaking of the FOMC, they have a meeting today, any major changes in their posture would likely be market moving.
Have a Great ” FOMC has a Bazooka” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
A Little Overzealous …. Friday …
So yesterday there was a lot of red (dropping in value) on many of financial professionals and likely your electronic apparatus with regards to Capital Markets…
What’s Up?
A Little Overzealous …
As you know, we are a very “Glass Half Full” firm and individuals as a whole…
But Hang on just a second … it makes no sense to rally all the way back to almost where we were before Covid 19 became an issue….
Do we think there will be a vaccine? Yes… Newsletter expands in great detail…
Do we think investors should look over the valley and to the greener pastures on the other side? Yes… and they are….
Do we think Capital Markets are ready to be where they where before all of this with the uncertainty of looking through the Valley? Not yet … a lot of uncertainty still…
Yesterday… Capital Market Participants agreed…
A dose of reality may have sunk in as the FOMC announced they expected slower growth for the next two years and as such lower interest rates….
Or maybe, some awakened to the fact of where we were … and where we are now… and said “Wait a Minute!”
All part of the process…. in due time this will all seem like a faded memory… not yet!
Expect ups and downs along the way!
Have a Great “Back to Reality” Friday!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in FOMC, Interest Rates, Investing/Financial Planning, Market Comments
Tagged FOMC, Overzealous, Wake Up Call