We certainly have a lot of ground to cover this week but as always, my intentions are to keep these weekly updates brief, simple and to the point. But first things first, Happy Mother’s Day to all the wonderful women in our lives that truly keep the world running. There is no doubt in my household that without Whitney’s patience and support, the men in her life would struggle!
As expected, the Federal Reserve on Tuesday held true to their beliefs in a measured approach to taming the inflation beast by announcing the first of what will most likely be several half-point interest rate increases. This temporarily provided a boost to the markets mid-week, but as has been the case so far this year, the volatility and negative sentiment crept back into play. Many market pundits want to see an even more aggressive Federal Reserve, and this has caused frustration on some levels. To be clear, this is not an easy task. With so many different economic indicators to monitor, the balancing act of being cautious and not overreacting is a true game of chess. We continue to hear the popular buzz words being thrown around like recession and stagflation. During times of uncertainty like we are experiencing right now, it can become very confusing to truly understand what is occurring while sifting through the noise. I have included a video link below (Vimeo) from our internal economist, Kara Murphy, that speaks to the stagflation point. I think she does an excellent job of explaining why today is different than the late 70’s where raging inflation and high energy prices caused turmoil throughout the economy. It is worth a watch in my opinion.
I had the opportunity to travel and spend a few days with many of my peer advisors over the past week. It was encouraging to see old friends that I had not connected with in several years and share the many experiences we each bring to the table. You have heard me say this before, but I will reiterate that travel is alive and well. Pent-up demand is very strong and should last throughout the summer. Consumer spending is already shifting in my opinion and while we may not “see” it firsthand, I do believe it is occurring rapidly around us. My long plane flight also gave me time to reflect on our current environment. In many ways we are all passengers on the airplane of life. We are all trying to get to our destinations (retirement) in the safest manner possible. Storms and turbulence tend to pop up along the way and simply cannot be avoided. It isn’t always easy to just fly around and avoid them in many cases. Instead, we buckle our seatbelts, remain seated, and trust the pilots (your advisors) and the plane (your investments) will get us there safely. It might not feel good at times, but you have been in this situation before, and each time have made it home safely. Perhaps your itinerary has changed, or you need to make adjustments. That’s ok, that’s why we are here. Never hesitate to reach out with questions!
I Bond Follow-Up: Steven took some time to write up a piece on the recent I Bond repricing for the period of May 2022 – October 2022 (attached Word document). The rate came out at a whopping 9.62%! I would again encourage you to consider this if you are looking for a place to park cash that would otherwise be sitting in a low interest-bearing savings account and not needed for at least 12 months.
Have a nice weekend and celebrate all the wonderful Mother’s in our lives!