The Federal Reserve announced the release of the Federal Reserve Bank’s second (November) statement of policy, and the first (June) statement of policy. As has been widely reported, recent statements show the Fed is tightening policy and doing so incrementally. The first statement was a mixed read, but the second was a significant step forward in the rate-hike process.
The Federal Reserve Bank has announced that it will release the second April statement of policy because this will give the Fed more confidence about the next major policy announcement. This was the first time the Fed had released a policy statement.
The Fed’s statement was a welcome step forward, but it’s not the end of the line. The statement has also been widely reported that the Fed is considering doing another rate-hike next month, and that could happen as soon as next month. The Fed may cut rates again in the fall, but this will probably be the final rate-hike before the end of the year.
This isn’t just the first major FED policy announcement for the Fed (last month was the rate-hike, this will be the next major policy announcement). With any luck, the Fed will be ready to cut rates by the end of the year. The Fed’s last major rate-hike was in 2008, and it’s widely expected that the Fed will cut rates again this year.
Thats right, the Federal Reserve is going to lower its benchmark rate by nearly another point. That’s good news for most Americans because it means that interest rates will finally start to drop back down to their most normal levels.
The reason that the Fed will cut rates is because it’s doing exactly that already. The Fed had originally suggested that it would do it by the end of the year, but it’s too early to say but the market is really starting to grow so expect to see the Fed do that in the next couple of weeks.
If you’re not in the market right now, you should really start now. The market’s up nearly 50% so there’s no reason to wait.
The market is so strong that there is little reason to wait. But, if you have a lot of assets or other investments that you want to protect from the drop in interest rates, then it might be worth waiting to see if the market starts to shrink. At the current rate you should have more than enough money in the bank to take out your biggest expenses.
For most of us, the only real expense we care about is our 401K. But the market has a lot more in it for us. If you own stocks, you can now borrow money at 5% (or even more) and invest it at 15% or higher. You can also pay down your debt and invest in a variety of other assets like bonds and other debt. The market is so strong that the only thing standing in the way is your own personal savings.
The way we see it is that we’re in a tough time. We’re in a time like when we can’t get any of the people in our lives to pay for our 401K or the mortgage. The biggest challenge we face is how to pay back the money we’ve borrowed. The biggest pain is finding the funds that make up the money we’ve borrowed from the market and selling those dollars back to the government.