The reaction from markets to the release of Q1 2024 real GDP results has given every sector of the market another chance to give their own interpretation of what is coming regarding Federal Reserve (Fed) policy, inflation, and the federal funds rate.

Discover the reasons investors diversify their portfolio with alternative investments.

Timing has never been a crucial undertaking for fixed income allocations dedicated to asset preservation largely because this is a long-term endeavor dedicated to keeping an investor’s wealth intact.

We put the recent market movements in perspective, which have been driven by time (it has been a while since we had a 5%+ pullback), overly optimistic, complacent market sentiment, and higher Treasury yields amid persistent inflationary pressures and signs of a more patient Fed.

The impact of high inflation on individuals’ finances is not something to take lightly, especially in the U.S., because for almost 40 years we have had no experience with such an event and have no clue how to deal with it or how to try to minimize its negative impact.

For a typical consumer, the two most hot-button topics are food and energy. Both play a significant role in household spending, and just as importantly, both are highly visible.

Fed Funds Rate: According to Bloomberg calculations based on where Fed Funds futures are currently trading, there is a 20% chance that the FOMC cuts the overnight rate in June and a ~50% chance that they cut in July.

Growth and inflation have remained remarkably resilient since the start of the year, causing the market to once again rethink the Fed’s rate path. As a result, the odds of a June rate cut have collapsed

Before we start discussing the Consumer Price Index again, we want to remind readers that CPI inflation is not what Federal Reserve officials use to determine monetary policy. It is true that markets put a lot of emphasis on this measure, but we would like to caution giving too much importance to it.

Senior Investment Strategist Tracey Manzi notes that with a Federal Reserve easing cycle on the horizon, the fixed income markets are relatively attractive.

This week’s discussion is a follow-up to last week’s overview of the elongation of the economic cycle.

While artificial intelligence and new technologies have captured the market's attention, this quarter we reminisce about the good old days and a key piece of technology that has endlessly entertained us all – classic video games.

Can Federal Reserve (Fed) officials live with such a strong labor market and still start lowering interest rates in June or July?

We are normally reluctant to use trendy phrases to explain either our good and/or bad calls regarding the U.S. economy. However, saying that ‘this time is different’ is more than fitting today to understand what has happened to the U.S. economy since the recovery from the COVID-19 pandemic.

Market rally driven by a broadening of the market and optimism that the Federal Reserve will deliver rate cuts later this year.

With technology changing the way we live, we are taking a trip down memory lane to look back at a piece of technology that has entertained generations: classic video games.

For lack of a better word, the fixed-income mantra is getting stale. Interest rates have peaked, and they remain at elevated levels, allowing investors to take advantage of higher income and ample cash flow opportunities.

The Federal Open Market Committee (FOMC) comprises the Federal Reserve System’s decision-makers on monetary policy in the United States. This monetary policy is designed to keep the Fed’s dual mandate of maximum employment and price stability in line with targets.

Larry Adam takes stock of how the economy and markets have performed since the beginning of the year and take a fresh look at where we are heading as we progress through the year.

Markets have taken the Federal Reserve (Fed) decision to keep about 75 basis points (bps) cuts in its dot plot as a very positive sign that the Fed is going to actually cut 75 bps during the year and are still acting upon the news.

The central bank will look to cut interest rates three times by the end of 2024.

Doug Drabik discusses fixed income market conditions and offers insight for bond investors.

Do you know that the headline Personal Consumption Expenditures (PCE) was 2.4% in January while the core PCE was 2.8%? This is very close to the 2% target.

With the U.S. economy posting two consecutive quarters of 3%+ GDP growth, recession calls have quieted down.

For many investors, fixed income is intended to serve as the ballast of a portfolio. This means that it hopefully provides stability in turbulent times while providing consistent and known income, cash flow, and return of principal.

Sometimes, and February was one of those times, the information on the U.S. labor market doesn’t make sense. Many argue that government agencies are cooking the books.

The move higher in the S&P 500 has been historic. In fact, the S&P 500 has climbed ~17% over the last four months and is on pace to rally 17 of the last 19 weeks.

Recessions are part of the economic cycle. No one looks forward to a recession because of the pain it can impose on investors or worse, job security.

The economy continues to hum along (Atlanta Fed 1Q24 GDP estimate: +3.0%), albeit shifting down a notch from the pace seen in the final quarters of last year.

Personal income increased more than expected in January, up 1.0% (or $233.7 billion). The increase in January closely matches what happened in January of 2023 when it increased by 0.95% (or $213 billion).

Equity investors didn't mind the extra day this February as both domestic large-cap stocks and small-to-mid-cap stocks saw steady gains through the month, bringing both groups into positive territory year-to-date, though the latter continues to lag.

Rob Tayloe discusses fixed income market conditions and offers insight for bond investors.

Four years ago this week (2/19 to be exact) the S&P 500 climbed to an all-time high of 3,386 before plunging over -34% as the world economy shutdown due to the pandemic.

From a very weak retail sales report for January 2024 to stronger inflation readings as well as increases in credit card and auto loan delinquency rates during the last quarter of 2023, the picture for consumer demand has weakened considerably.

Even at the risk of sounding like a parrot by repeating the same thing again and again, we think that it is, once again, appropriate at this time to do so: “One data point doesn’t a trend make.”

One of the major benefits of municipal bonds is that the interest earned is exempt from federal income taxes. The appeal of earning money that you do not have to pay taxes on understandably piques the interest of many investors.

Once again, as we have argued several times before, if the Fed, once after having achieved its 2% target and remained at the target for several years, decides that a different target may be more effective for conducting monetary policy, they may decide to change the target.

Most of us associate 529 accounts with college savings. They’re flexible, allowing you to transfer assets to anyone, including yourself, for the express purpose of furthering the education of your beneficiary. But did you know that a 529 can be a powerful estate planning tool?

Mega-cap Tech names have been strong outperformers year-to-date. In fact, a composite of the biggest names, or MAGMAN (MSFT, APPL, GOOGL, META, AMZN, NVDA) is up 12%, while the rest of the S&P 500 is up just 2%.

Whether you have a family member turning 18, or someone in your life looking to build wealth from the bottom up, this primer provides a solid overview of the basic types of securities, investing strategies, and valuable lessons to help pave the path toward financial confidence.

The can has been kicked down the road several times but it feels like the end of the road is in sight.

Markets have made themselves clear for a while: they want more rate cuts than what Federal Reserve (Fed) members seem to be willing to accept at this time.

A period of market volatility and consolidation is likely as markets have already priced in much of the economy's good news.

The Fed concluded its January policy meeting leaving interest rates unchanged, which was widely expected.

The Federal Reserve (Fed) elected to not raise the federal funds rate at the January 2024 Federal Open Market Committee (FOMC) meeting.

For many investors, fixed income investments have a primary objective of preserving wealth. The known characteristics of owning individual bonds are a major reason for this: known income, known cash flow, known redemption date, known redemption value.

In the middle of 2023 we argued that, according to our forecast for GDP at the time for the whole of 2023, employment was growing too fast and that it would have to slow considerably during the second half of the year.

Mega-cap tech-related names (MAGMAN) drove equity returns in 2023. However, heading into 2024 market consensus expected returns to broaden to other equity sectors and market cap sizes.

Many investors buy individual bonds as a means to preserve their wealth. They can serve as a method to balance growth assets (such as stocks).

Treasury yields have steadily climbed since the start of the year, with the 10-year Treasury yield rising back to 4.16% after reaching a low of 3.79% in late December.