In the Conversation: Rate Hike on The Horizon

Tom WilsonTom Wilson, Managing Director, Wealth Advisory &
Senior Investment Manager

Just a few months ago, it seemed unlikely that the Federal Reserve would raise interest rates. However, on the precipice of the December 16 meeting, the consensus opinion has shifted to the Fed likely to raise interest rates when they conclude their two-day meeting. Investors will be looking closely at the comments coming out of the meeting.

We expect the Fed to highlight the positive aspects of U.S. employment, which has been one of their two mandates. This can provide them the justification for increasing interest rates from today’s exceptional levels. Their second mandate is an inflation target that supports price stability and economic growth. On this point, the Fed will likely note that the economy is running below their 2% target and thus could make dovish comments on the prospect of raising rates in the future.

Investors will also be looking to see how the Fed comments on China’s economy, the drop in oil prices, and the decline in global equity markets. More specifically, the market would be looking for insight on how much the Fed will weigh this information when setting monetary policy here in the U.S.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.

In the Conversation: No Surprises Here

Tom WilsonTom Wilson, Managing Director, Wealth Advisory &
Senior Investment Manager

After completing their two days of meetings, The Federal Reserve decided to leave the Federal Funds Rate unchanged. As noted in yesterday’s blog, this was the consensus opinion of what would take place today.

The Fed noted that general business conditions had improved since their last meeting in July. They specifically noted the continued improvement in the labor markets, strength in the housing sector, and modest improvement in consumer and business spending. On the negative side, they stated that export growth has been soft and that inflation continued to run below the committee’s longer-term target. In addition, Fed chair Janet Yellen commented that weakening global growth had also contributed to today’s low level of inflation.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.

In the Conversation: FOMC Meeting

Tom WilsonTom Wilson, Managing Director, Wealth Advisory &
Senior Investment Manager

The consensus opinion now is that the Federal Reserve will not raise interest rates when they conclude their two-day meeting tomorrow, September 17.  Thus, such a decision will not be a surprise to the markets, but investors will be looking closely at the comments coming out of the meeting.

We expect the Fed to note the positive aspects of U.S. employment, which is one of their two mandates. Their second mandate is an inflation target that supports price stability and economic growth. On this point, the Fed will likely note that the economy is running below their 2% target.

Investors will also be looking to see how the Fed comments on China’s economy and its impact on global growth, particularly on Pacific Rim countries and world equity markets. More specifically, the market would be looking for insight on how much the Fed will weight this information when setting monetary policy here in the U.S.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change.