Nick DiLeone’s Post

- The Federal Open Market Committee cut its overnight borrowing rate to a target range of 4.25%-4.5%, back to the level where it was in December 2022. - “Today was a closer call but we decided it was the right call,” Chair Jerome Powell said. - The Fed indicated that it probably would only lower twice more in 2025, according to the closely watched “dot plot” matrix of individual members’ future rate expectations.

RBI Policy Meet: What Should Investors Do? Today, the RBI decided to keep the repo rate steady at 6.5% for the tenth consecutive meeting, but the focus has shifted with the central bank changing its policy stance to 'neutral' from 'withdrawal of accommodation'. This signals a potential move towards easing, but with inflation risks still on the horizon. Key Takeaways: >>Repo rate unchanged at 6.5% >>GDP growth for FY25 stays at 7.2% >>Inflation forecast maintained at 4.5% What Should Investors Do? >>Stay on course with asset allocation: Market volatility or possible rate cuts shouldn't shake your long-term strategy. >>Focus on your financial goals: Don’t be swayed by short-term movements. Keep an eye on what matters—growing your wealth sustainably. >>Position for future rate cuts: With a rate reduction likely in early 2025, consider adjusting your fixed-income exposure accordingly. While the RBI signals potential easing in the coming quarters, staying disciplined in your investment approach will help you navigate any short-term uncertainties. 📌 Follow me Prashant Mishra for more such updates.

The government bond market witnessed fluctuating yields over the past weeks, influenced by various factors. In the first week, significant selling pressure from mutual funds and state-owned banks pushed yields up despite RBI's liquidity management efforts. However, during the second week, yields on the 10-year benchmark bond decreased in line with the US treasury yields, hinting at a potential rate cut by the Federal Reserve. Strong demand for government bonds prevented further declines, while domestic yields were also guided by UST yields. The domestic market responded to lower-than-expected CPI prints, with limited downside attributed to the RBI Governor's cautious stance on rate cuts until inflation stabilizes at 4%.

Following up on yesterday's post: waiting for Fed rate cuts could potentially end up working against you. If many are doing the same, increased demand for fixed-rate debt could give lenders more pricing power, especially while their balance sheets are still constrained, potentially leading to higher all-in rates. #CommercialRealEstate #InterestRates #FedPolicy #RealEstateFinance #CapitalMarkets #CRE #RealEstateInvesting #EconomicOutlook

Assuming 25bps for each cut, that would make the Prime Rate at the end of the year 7.75% (8.50% today). Not a huge change but moving in the right direction at least. How does that affect the 10-year US Treasury rate (the index a majority of lenders use)? Not sure. It was down very slightly today on the news meaning the expectation was 3 cuts and this news simply matches that.

Many industry professionals I've spoken with over the past few weeks are waiting for the Fed's expected September rate cuts before considering perm or term loans. However, it's crucial to note that anticipated rate changes are already priced into treasury or swap markets, which fixed rates are based on. Waiting only makes sense if you believe the Fed will cut rates more than the market expects. #CommercialRealEstate #InterestRates #FedPolicy #RealEstateFinance #CapitalMarkets #CRE #RealEstateInvesting #EconomicOutlook

In case you missed the news! 🔈 Last week, the Reserve Bank cut the Official Cash Rate by 50 basis points to 4.75% following a 25bps reduction in August, signalling more affordable borrowing conditions. The majority of economists had predicted the 0.50% cut, as inflation is under control, but the economy remains sluggish. The cuts are part of a strategy to stimulate economic growth and ease financial conditions for kiwis. #OCR #RBNZ #InterestRates #EconomicGrowth #Marketnews

The combination of strong US growth and sticky inflation is raising the odds the Federal Reserve hikes rather than cuts interest rates, bringing borrowing costs to as high as 6.5% next year, according to UBS Group AG strategists.

Series I Bonds were all the rage in 2021 & 2022 when rates were between 7% and 9% per year. As inflation trends down (slowly), those rates are not nearly as appealing, especially with short-term T-Bills paying 5%+.

"✋🏻Candy, why Federal Reserve decides to cut rates? How this affects my overall financial planning?" 👉🏻FED cuts rates to stimulate growth, combat low inflation, and reduce unemployment. 💟 Short-term Savings Impact: 1️⃣ Lower Earnings on Treasury bills, bonds, and fixed deposits as interest rates drop. 2️⃣ Price Increase for existing bonds with higher rates. 3️⃣ Fixed Deposits yield less, becoming less attractive. 💟 Stock Market: 1️⃣ Boost for Stocks: Lower rates reduce borrowing costs, potentially increasing business profitability and stock prices. 2️⃣ Attracts Investment: With lower returns on safer assets, stocks become more appealing. 3️⃣ Sector Benefits: Sectors like real estate and consumer discretionary may gain more. ❣️ Financial Planning Tips: 1️⃣ Emergency Fund: Keep 3-6 months' expenses in savings. 2️⃣ Short-Term Goals: Opt for safer investments considering the low rates. 3️⃣ Long-Term Growth: Invest in stocks and diversify for better returns over time. 4️⃣ Retirement Planning: Maximize retirement contributions and consider an annuity for consistent income. Tailor your strategy to your unique financial situation. Let's chat over coffee for personalized advice. #FinancialPlanning #InvestmentTips #EconomicGrowth #StockMarket