"Kind of Fallen Apart"

You know what you don't expect the Chairman of the Federal Reserve to say?

That their inflation forecasts have "kind of fallen apart"...

Then again, honesty is refreshing.

📌 The Fed cut rates by 0.25% this week.

In total, the Fed has now cut 1% total.

So far so good.

After raising rates to fight inflation in 2022 and 2023, the cuts felt like a return to normal, sort of...

Of course, part of the concern was unemployment could easily snowball, as it hard in the past.

(I wrote about it in "Let the Games Begin")

But recently a bunch of things have happened

- Inflation is getting stuck closer to 3% than 2%

- The U.S. economy is proving to be shockingly strong

- The jobs situation seems steady

Oh and, there is the elephant in the room...

→ What does the U.S. PRESIDENTIAL ELECTION mean for INFLATION?

(Best guess: TBD)

And so the Fed doesn't quite know what the next move should be.

And they just told markets they're going to be stingy with more cuts until they (or we) know more...

It might be a while 😉.

What does this mean for MARKETS?

Simply put, markets were all kinds of excited about rates coming down.

Think "cheaper borrowing."

Well, that's on hold.

(Plus the Fed looks like they're wobbling, which markets really don't like).

So...

→ Interest rates went up (the 10 year Treasury jumped to 4.5%)

→ Stocks fell a good chunk (like 3% or so)

→ The U.S. dollar rose a bunch, making things harder from Brazil to Europe to Korea.

Eech... 😬

What does this mean for YOU?

Some STOCKS got cheaper for sure...

Whether they're "cheap" and a bargain is a different question.

But there is probably a good "rebalancing opportunity" somewhere out there.

If you were upset you had missed the window to buy BONDS at higher yields... Well, the window just re-opened.

That's true of U.S. Treasuries...

It's also true of their INFLATION-PROTECTED siblings, TIPS.

(They're now yielding 2.2% roughly after inflation for ten years, as opposed to right around 1.5% as recently as September).

How quickly the world changes...

But it's still almost YEAR END (and thus April 15 is around the corner).

If you had investments with LOSSES, those losses probably grew this week.

it's worth looking into whether that's the case.

HARVESTING some of those LOSSES may soften the blow of the tax bill coming your way in a few months.

I know, I know, you're still getting ready for the holidays, and here I am telling you to get ready for April...

Wishing everyone a great weekend.

Chat soon,

Jonathan 👋

📌📌 PS. Are you ready to regain understanding, control, and agency over your own wealth?

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