Watch this Month’s Market Commentary on YouTube
CLICK HERE – Market Commentary October 2024 – Summit Financial Consulting LLC
Beneficiary Designation Reminder:
This is just a reminder that if you’ve experienced any significant life changes (such as marriage, divorce, birth of a child, or changes in employment), your beneficiary designations on investment accounts may need to be updated. Please contact our office at (586) 226-2100 to review and update your designations if necessary.
Fed Rate Cut Update:
On September 18th, the Federal Reserve announced a jumbo rate cut of 0.5%. This was a bit surprising and makes you wonder if the Fed is worried that they waited too long to cut rates because the normal increment for Fed Rate cuts is 0.25% in our opinion.
Inflation has been stubbornly high since the spring of 2022 when Russia invaded Ukraine, but the percentage increase year over year has been decreasing.
Food price inflation topped at 11.4% in August of 2022 but has since dropped down to 2.1%.
Source: U.S. Bureau of Labor Statistics
This is exactly what the Federal Reserve wants to see, but they do not want to keep interest rates too high, because that could slow down the economy and lead to job losses. When they cut interest rates, that has the potential to help the economy. The unemployment rate has been creeping up, which may be a reason why the Federal Reserve decided to cut rates by 0.5% instead of 0.25%.
Source: US Bureau of Labor Statistics
Source: US Bureau of Labor Statistics
Rate Cut Consequences:
As we’ve discussed in our recent blog post, some investments, like bonds, tend to make money when interest rates decrease. However, many investments or bank products have the potential to get watered down when rates decrease.
If you are interested in locking in current rates before they decrease further, please reach out to us to discuss your options. When rates are reduced, many forms of debt, including auto loans, credit cards, and new mortgage loans, will cost less because of decreased interest rates.
We are hopeful this will stimulate the economy and that 2024 will end strong after the uncertainty of the Presidential Election is removed.
Watch This Month’s Market Commentary on YouTube:
Financial Planning and Review Meeting
If we haven’t spoken in a while, or you’ve had any changes to your beneficiaries, income, job status, marriage status, a new birth in the family, 401K options, address, risk tolerance, or any other financial changes, please contact us right away at (586) 226-2100 to schedule a review meeting.
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, James Baldwin, and Daniel Ladzinski
Sources:
- U.S. Bureau of Labor Statistics – Consumer Price Index by Category
- U.S. Bureau of Labor Statistics – Employment Situation Report
- Federal Reserve – Press Release on the Jumbo Rate Cut
- Federal Reserve Interest Rate Policy
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