Uncle Jerome FINALLY stopped raising rates.
After an unprecedented 10 months of rate raises, they paused to find out what the economy does from raising rates over 5% since last March.
It’s about freakin’ time!
Have you ever driven a boat?… excuse me – piloted a boat?
I You know how it’s a little disorienting because there’s a significant lag between turning the wheel and the boat changing directions?
Like WAY more of a lag than driving a car which is very responsive.
Now imagine just how much lag there is driving one of those massive freight boats you see in the SF Bay.
If they want to make a right-hand turn, they must have to turn the wheel 20 minutes before the turn.
Piloting the economy is like piloting a freight boat.
It takes anywhere from 6-18 months for our economy to fully digest rate increases, so with inflation on a steady downtrend since last summer, it only makes sense to chill out on the rate increases to see what direction we end up facing.
For the most part, I’m a fan of the Fed and a fan of Jerome Powell so I have faith that they made the right moves, but I can’t help raising just one of my eyebrows.
That said, the market just hit a 12-month high this week, so it’s possible your portfolio saw the worst of things last October.
(We’re up 20% since then.)
