If the Fed decides to cut short-term interest rates, it would be the first adjustment to be lower in more than four years. In his August speech in Jackson Hole, Wyoming, Fed Chair Powell confirmed that “the time has come for policy to adjust.” He also indicated that the Fed is more concerned about supporting the labor market while its progress on inflation continues. Powell’s hat tip to the labor market appears well-timed. As you can see in the chart below, the Labor Department’s August Job Openings and Labor Turnover Survey (JOLTS) fell to its lowest level in 3½ years and now sits at a ratio of 1.07 job openings to job seekers. The JOLTS update preceded a disappointing August jobs report, which showed payrolls expanded by 142,000.
Market speculators anticipate the Fed dropping rates by 0.25% at its September meeting. Some expect the Fed to cut rates by 0.5%, but others say a more significant cut may send a mixed message about the economy with the presidential election just a few weeks away.
To us, this means buckle up for the next few weeks—in fact, buckle up for the next few months!
After the Fed meeting, the election cycle will accelerate. Historically, volatility has picked up heading into a presidential election. At Eiger Wealth Management, we'll continue to:
Maintain security and asset class diversification within our portfolios
Seek out tax planning and investment opportunities in the changing economic and political landscapes
Avoid the short-term pricing "curveballs" that will appear due to current market volatility
Stay focused on your personal goals and investment objectives
As always, don't hesitate to contact us with any questions or comments.
The information contained on this site may not reflect current developments; does not constitute investment, tax, or legal advice; and should not be relied upon for such purposes. There is no guarantee that any forecasts made will come to pass. We make no representation about the accuracy of the information or its appropriateness for any given situation. This information is not an offering. Past performance does not guarantee future results.
Comments