Tag Archives: Fed Funds Rate

How Snowflakes are Formed … Very Relevant in Our Neck of the Woods recently… Preview of more AI (Artificial Intelligence) and good ole Federal Funds Rate (Increase this week)

Posted on December 24, 2022 by | Leave a comment

Ya ya … it was 100+ degrees for like 60 days this summer….those afar go ahead and giggle (many have already jabbed- tha’s cool and deserved – haha)… in the 20’s suddenly and the schools in our area were closed T-Friday — Make up Weather days here we come…. amazing how out of sorts the schedule can get with just a few snow days….digressing

How Snowflakes are formed

Of course from our buds at Visual Capitalists… thought timely for sure!

Travels Coming – Previews

With some business and pleasure travels planned – south and north soon, early work on posts are on deck… Want to talk more on AI (Artificial Intelligence) if you missed it, we spoke about it here- who knew it would be so cutting edge… not us – and our good ole friend Federal Funds Rate which were raised this week….

Ahhhhh….today is a “Thaw out Friday” and “See how much School can be forgotten in Three… no Four Days” Weekend…

Enjoy your Friday and weekend1

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

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Posted in Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Retirement Planning

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Heads Up for a Busy “Headlines” Week – CPI Consumer Price Index aka Inflation Measurement – FOMC Federal Open Market Committee Rate Increase Announcement …

Posted on December 12, 2022 by | Leave a comment

While the Holiday Season is getting closer, Economic data must go on….

On Tuesday we get the CPI (Consumer Price Index) bluntest of instruments for Inflation report from the BLS (Bureau of Labor Statistics) ….

All about expectations versus actual, “for the moment” …. Last months was 7.7% year over year and the expectation this time is for 7.3% …

Above the 7.3% will likely lead to disappointment and below or well below a short term applause …

On Wednesday Jerome Powell and his buddies at the FOMC (Federal Open Market Committee) will in all likelihood raise rate the much expected .50% to the 4.25% – 4.50% level….

While it is not super obvious from the chart above, the longer term 10 year treasury (blue) is much lower and trending lower than the shorter term 2 year treasury …. this is an inverted yield curve….

With Powell pushing short term rates higher with a .50% increase, the interesting observation will be what the 10 year does, as the 2 year is captive to Powell’s movements, being so near in time frame!

Sorry for the heavy start to the week… we promise an easier rest of the week… but wanted to let you behind the curtains of our watch this week….

Have a Great “Busy Economics” start to the week!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

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Posted in Economy, FOMC, General Financial Planning, Investing/Financial Planning, Market Comments

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Fed Raises Rates and then heads home for some R&R for over two months … Last Friday of July … Going Fast …

Posted on July 29, 2022 by | Leave a comment

As expected, on Wednesday of this week the federal reserve raised rates by 75 basis points (.75%), an early leak to their favorite Wall Street Journal reporter all but absolutely solidified this decision. Note the speed of the move compared to the most recent rate increases…

Now with an open calendar of over two months the federal reserve can head for the hills and get some R&R before having to stew over the next meeting ….. and what will be likely a much more complicated decision! Recall here our note about being in a pickle!

Speaking of R&R this note comes from a cooler higher altitude climate as the family and I recharge the batteries, sharpen the saw or however that goes, and spend time together. A turnaround trip back home is a necessity for the incoming freshmen‘s mandatory sport tryouts with a quick return back to the family …. hopefully!

Today is a Friday, hope you may have some time for some R&R as well!

Talk next week…

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 Economy, FOMC, Interest Rates, Investing/Financial Planning, Market Comments

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Several Weeks of Consecutive Short Road Trips Finally … FOMC Raises Rates … Spring Friday Crazy Southern Weather

Posted on May 6, 2022 by | Leave a comment

Happily, the schedule shows several road trips in the next few weeks making for a fast May …. Nothing air related, but a nice drive in all different directions in a return to normal…. as also mentioned in our Three Positives Happy Post here mid week….

FED Increases Rates – Jerome Powell

Mid Week, as expected the FOMC (Federal Open Market Committee) led by Jerome Powell increased the Fed Funds Rates (think our checking accounts) by 1/2 Percent or in Wall Street Speak, 50 basis points… We will talk more about this soon, but wanted to let the Capital Market Dust Settle before diving in….

Friday in the South – Heated Weekend

With near 1000 followers … many from all over the country of friends and clients we like to toss you the rollercoaster ride of deep South Texas weather every once in a while … a high 40 degree mid week start of the day to only top out at 60 this week, was a cool spell …. this weekend Donald the Brain hits 100 in his neck of the woods and we are expecting mid 90’s…

That is ok the cold, rain and ice are gone… Lot’s of water, sunscreen, shade and no extended time in the first round of heat….

Have a Great Friday and super Weekend- Talk next week!

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 Debt - Debt Management, Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments

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All Eyes on Jerome Powell FOMC Interest Rate Increase …. 25bps/.25% Expected …. Spring Break Working Analysis

Posted on March 14, 2022 by | Leave a comment

In the middle of this week as noted here on the FOMC Calendar the FOMC chaired by Jerome Powell will most likely increase the short term federal funds rate by 25 basis points or .25%. … think your checking account interest rate.

CME Estimator at almost 100% .25-.50% increase

While the last FOMC meeting was approximately 2 months ago, what may seem like a decade given the events that have unfolded in the last 60 days, Powell in several speeches recently walked back the original 50 basis points or .50% thinking that many market participants had priced in.

Last week’s continued hot CPI report, has bond market participants pushing the probability up of further rate increases, and maybe even a higher 50 basis point rate increase this week that even the Fed has said cryptically would not occur.

As can be seen by this expanded detailed graph of the FOMC federal funds rate versus the two year treasury, the treasury market has rate increases priced in very far ahead of the FOMC.

Should the Federal Reserve increase by 50 basis points, with market participants for the most part not expecting that, turbulence would likely be the result.

This meeting is also accompanied by the economic forecasts also known as the dot plots of the Federal Reserve members, which are their expectations of future interest rates. Keep in mind these estimates fluctuate dramatically, but make for good information.

Look for more detailed information from us on the possibility of why the CPI has already neared the highest end of its range and will continue to roll over as we get copyright approval from a great new source to help explain what’s going on with that report. No doubt we are all feeling  inflation costs especially at the food and the gas lines, but due to comparables the other nonparticipating inflationary pressures will likely over power the few extreme outliers.

Have a Great “All Eyes on the Fed” 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

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Posted in Economy, FOMC, Interest Rates, Investing/Financial Planning, Market Comments

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Capital Markets Pre-Empt Interest Rate Hikes … Amazing Correlation of 2 Year Treasury Bond and Fed Funds Rate …

Posted on February 9, 2022 by | Leave a comment

FOMC (Federal Open Market Committee) members use the very short term Federal Funds Rate (think interest on your checking account) to help throttle the economy. When it is too hot they raise rates. In Paul Volcker’s case to almost 20% way back in the hyper inflation days. When the Economy is struggling they lower rates, as of late to zero, both post Great Financial Recession and the most recent Virus induced mini-recession.

There is an interesting predictor or front runner of the FOMC interest rate movement, sparred by the very short term fixed income traders, specifically the 2 year Treasury bond.

Markets Pre-Empt FOMC Rates

The chart below is of the Two Year Treasury (Red Line) and the afore mentioned FOMC Fed Funds Discount rate (Blue Line) –

The correlation is so strong it is almost hard to even see there are two lines….

Zooming into a shorter time frame of just 5 years, not only can we see the difference, but in looking over to the right, the markets are predicting multiple rate hikes in short order, at this time!

Will see if this holds, but as mentioned in our post earlier this week here, Economic number and the markets are expecting rate hikes!

Have a Great “FOMC Rate Correlation” 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

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Posted in Economy, FOMC, Forecast, Interest Rates, Investing/Financial Planning, Market Comments, Retirement Planning

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December 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Posted on January 3, 2020 by | Leave a comment

Hello and Welcome to our December 2019 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

December – 2019 Video

Financial Planning Tip (s) –

12-31-19 Secure Act House Ways and Means

SECURE Act is Signed at the Finish Line of the Year

As mentioned here in our preview post, with a stroke of a pen on the Saturday before the Christmas week, the SECURE ACT (Setting Every Community Up for Retirement Enhancement) – Wow that is a mouthful!

The Biggies:

  1. Age 72 RMD, up from the confusing 70.5
  2. Non-Spouse 10 Year Mandatory distributions of Inherited IRA – Mandating taxes by beneficiary

Tons of planning techniques and lots more to the law, but these again are the biggies!

Capital Market Comments –

FED Pauses and Markets Yawn… Finally

The FOMC (Federal Open Market Committee) led by Jerome Powell and company, FINALLY were able to not lower rates and market participants accepted it… Shhh, lets keep it our secret..haha

12-16-19 Fed Funds Rate

 

Happy 2020!

Have a Great Day – Talk to you at the end of January!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Leave a comment

Posted in Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Tax Related, Video

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November 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Posted on December 2, 2019 by | Leave a comment

Hello and Welcome to our November 2019 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

November – 2019 Video

Financial Planning Tip (s) –

Email is the New Physical Address – Harder to Change

With email replacing our home address in importance, its not a surprise and only a mild inconvenience (due to the safety) to have to get a signed form in order to change our address.icons-157872__480 email address

In our descriptive post on the subject, we also predict eventually we will all likely be forced to transact most of our business in a paperless way….  Uncomfortable for many, but much better for our environment in the long term!

Why an Inheritance is Usually NOT Taxable

After running into this question numerous times we did a post here, and will also have an expanded article coming in our Q1 2020 Newsletter.inheritance

For the most part, inheritances are not taxable and in our post we go over the reasons why, and discuss techniques for being most tax efficient.

Just after this post a good follow on subject directly related to this post occurred that will go well in our “Why” Series Collection – Watch for another Inheritance Related Post and likely Newsletter Article !

 

Capital Market Comments –

When FED lowers, Recession Averted? Hmmmm

Near the end of the Quarter, as mentioned in our Fire Hydrant CEO post here, we ran into a most interesting chart (below)….

A first ever to see, the speaker points out that recessions are averted when the FED (Federal Open Market Committee – Jerome Powell the leader currently) lowers rates during an inverted yield curve… hmmmm

Not to worry, doing more research on this … oddly the speaker did not think much of Powell’s economic prowess, but spoke firmly that due to his LACK of horsepower on the Economy he may have a better chance of soft landing this slowdown…

 

img_5485

Always learning!!

Have a Great Day – Talk to you at the end of December!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Leave a comment

Posted in Cyber, Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Video

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October 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Posted on November 4, 2019 by | Leave a comment

Hello and Welcome to our October 2019 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

BREAK IN

D Magazines Best Wealth Managers

2019 Final Approved Dmagazine Best Wealth Manager

D Magazine Best Financial Planner – 13th Consecutive – Wow

Best_Financial_Planner 2019

Sirius Satellite Radio Co-Host

JK Sirius

 

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

October – 2019 Video

Financial Planning Tip (s) –

Why we want ANY seeming Important Document

In this post, due to recent fantastic $$ savings just by having access to very old documents… some almost two decades, we were reminded of how important it is for us to safely keep ANY seeming important document…. forever

Only thing is, if we do not have a soft copy… we cannot save it!

Capital Market Comments –

FED Lowers Once Again, another .25% – Likely Pause Expected

Jerome Powell Chief of the FOMC (Federal Open Market Committee) lowered rates by .25% to the 1.50% to 1.75% range, which will directly effect our overnight money, such as checking accounts and money markets… We think in part, to answer expectations… the good news is they have set future pause expectations… which we like!

Longer term rates have followed a bit, for now.

11-2-19 Fed Funds Rates

 

Have a Great Day – Talk to you at the end of November!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Leave a comment

Posted in Economy, FOMC, General Financial Planning, Interest Rates, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Video

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FED lowers again …. but only (.25%) – Longer Term View – Friday

Posted on September 20, 2019 by | Leave a comment

Last Wednesday the FOMC (Federal Open Market Committee) led by Jerome Powell and attended by Dallas’ own Robert Kaplan, lowered rates by .25% to 1.75 to 2.00% Range…

FOMC Lowers rates once again

With a ton of information coming at you (Newsletter is full of interest rate talk) we will keep this short…

The FOMC lowered rates a second time, making for an unofficial change in this cycle from raising to lowering of rates….

FOMC Rate now

While the chart above may seem extreme … let’s look longer term….

FOMC MAX RAte

It’s ok… a .25% move is not that much, but we really would like room to lower when the inevitable recession comes…. who knows, if the tariff talks get fixed, raising of rates may be in the cards…. wouldn’t that be an interesting turn of events… hand tight, we have your back!

Today is a wet Friday, enjoy your weekend and grab that umbrella.

Have a Great “Interesting Rate Cycle” 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

Leave a comment

Posted in FOMC, Interest Rates, Investing/Financial Planning, Market Comments

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