The U.S. economy added 162,000 jobs in August, significantly exceeding the consensus estimate of 53,000 and representing a sharp improvement from the subdued pace of hiring earlier this summer. The unemployment rate remained unchanged at 4.1%, continuing to signal a generally healthy labor market. In addition, previously reported employment figures were revised higher, with July…
Financial Markets Uncertainty Accompanied by Changes at the FOMC Entering 2026, the Federal Reserve’s dot plot and Fed funds futures contracts were both implying interest rate cuts later in the year. Then, in late February, the Middle East tension began, triggering widespread volatility across the capital markets spectrum. While equity valuations initially weakened, bond yields…
Don’t Overthink It – The Current Environment May Not Be As Uncertain As It Seems Although it may feel like the operating environment is in constant flux, driven by the war in Iran, a new Fed Chair and fluctuating inflation, it may actually be much less volatile than you think. If we separate the headlines…
A Strong Foundation, But a High Bar Equity markets have continued to move higher despite uncertainty surrounding inflation, monetary policy, and the conflict in Iran. While these issues have created periods of volatility, investors remain focused on a healthy economic backdrop and corporate results that continue to exceed expectations. In the medium to long-term, we…
Federal Reserve officials left interest rates unchanged for the fifth consecutive meeting. The Committee voted 9-3 to hold the benchmark federal funds rate in a range of 3.50% – 3.75%. Again, the Committee provided minimal forward guidance. The Investment Committee was not surprised by today’s decision to leave policy unchanged. The economic outlook remains murky,…
The U.S. economy added 57,000 jobs in June, falling short of the consensus estimate of 113,000 and the blowout 172,000 jobs created in May (downwardly revised to 129,000). Additionally, the unemployment rate fell slightly to 4.2%. While labor market conditions have remained surprisingly resilient throughout the first half of the year, today’s data represents a cooling…
In a widely anticipated decision, the FOMC voted unanimously to maintain the federal funds rate target in a range of 3.50% – 3.75% for the fourth consecutive meeting. Although today’s vote was unanimous, forward guidance implies a split consensus as to the interest rate path for the remainder of the year. Nine officials now…
The U.S. economy added 172,000 jobs in May, well above the consensus estimate of 85,000 and the 115,000 jobs created in April, signaling a reacceleration in labor market growth. Additionally, the unemployment rate remained unchanged at 4.3%, indicating that labor market conditions continue to be more resilient than many economists had anticipated and remain near the…
Rates higher for longer? Implications for equity investing Investor sentiment has shifted from one of optimism for Fed driven rate cuts in 2024 to one of a delay for rate cuts to as late as early 2025. While this is based on recent economic data showing a resilient economy to already elevated rates, a “higher…
We may have seen the last rate hike, but when will we see the first cut? Entering 2024 it was widely believed that interest rate cuts were on the horizon, as policy makers set the tone at the December FOMC meeting by increasing their interest rate forecast to three cuts, previously at two for 2024.…
Bank Board Strategic Business Planning Presentation: 2024-2026 “Challenge Brings Opportunity” Objectives for the Presentation: To provide an understanding of the current and anticipated operating environment which community based financial institutions face in the second half 2024/2025/2026 and the related key elements that institutions must consider and understand To present the primary challenges which…
Addressing the “Higher for Longer” Rate Environment for the Balance of 2024 Now that we are officially in the ‘higher for longer’ operating environment, how does that impact the balance sheet strategy for the remainder of 2024? Are there tactics that can be implemented in the short term to mitigate the impact of continued higher…
U.S. inflation registered in at 3.0% year over year increase in June, a decrease of .3% from the month of May and was .1% below consensus. While the month over month Consumer Price Index increase came in at -.1%, this continues to keep rate cuts in play for the September meeting. Recent data on household…
Interest rates are near the top of the range again, creating an investment opportunity Market expectations were initially projecting it to be a better year for fixed income investors, as many economists thought we would be in a recession by now or one looming right around the corner and interest rates would be lower. …
Since the beginning of 2021, the 10-year Treasury note has risen by about 70 basis points in yield. This rapid rise in rates has created high volatility across bond and equity markets, and as such, it is fair to question if and how the Federal Reserve may intervene to keep long-term rates low. We…
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