Mosaic Weekly Article 9/16/2022

Let me start this weekly update with some good news. We have a new team member here at Mosaic Asset Partners. Baby Jack Dengler arrived early this morning and on schedule which mom certainly appreciated! All are doing well (including Steven), and we are excited to welcome him to this big, bright world. Here is something to ponder. Do you think he will ever learn to drive a car? It’s amazing to think that in 15-20 years that simple aspect of our lives may no longer be the same.

On to some other fun facts for the week. Inflation concerns inched a notch higher over the past week. The latest data points showed that price increases have become more widespread than previously anticipated. The August data showed that rising shelter, food, and medical costs outpaced the declines in energy and oil. With total CPI slightly higher for August, +0.1% versus July, it is still lower overall from the high-water mark set in June. For consumers, the frustration lies in prices that are simply not snapping back to levels we were used to. In other words, the life we were accustomed to won’t return anytime soon. Higher prices in general, are likely to remain with us for some time. The belief is that the Federal Reserve will continue to raise rates until the inflation trend slows considerably, and likely extends further than we would like. Many economists agree that the employment rate will need to move higher coupled with a slowdown in spending i.e., the economy, before the Fed will ease off the gas pedal.

The Federal Reserve will conduct its two-day policy meeting on Tuesday and Wednesday of next week, with an interest rate decision and press conference scheduled for Wednesday afternoon. Markets are widely anticipating a ¾ point interest rate increase as we have discussed. Since March, a cumulative increase of 2.25% has already been put into place. It is amazing to think how far we have already come with no apparent end in sight. Chairman Powell’s tone during his post meeting press conference remarks will be telling and no doubt impact how things unfold in the near-term. Meanwhile, we will hold our breaths for some signs of moderation. In my opinion, that time is likely very near.

To summarize, inflation levels overall still appear to have peaked a few months back, even though they remain stubbornly high. Any real signs of easing other than a few select areas in the economy remain puzzling. The rapidly rising interest rate environment should catch-up with the lagging economic data points in due time. And finally, the elusive “soft landing” we are all hoping for is still to be determined. These are uneasy times we know, but hang in there, we will get through this. In the meantime, let’s celebrate the beginning of new things to come. It is an ongoing adventure we are on after all!

https://www.cnbc.com/2022/09/13/inflation-isnt-just-about-fuel-costs-anymore-as-price-increases-broaden-across-the-economy.html

https://www.cnbc.com/2022/09/13/inflation-rose-0point1percent-in-august-even-with-sharp-drop-in-gas-prices.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

https://www.investopedia.com/what-to-expect-for-the-markets-next-week-4584772