There is no shortage of news to keep investors busy. Will there be a Fed rate cut? What is happening with inflation? How will the election impact the market?
Wise investors filter the sensationalism to get to the heart of what they need to know.
This week, we’re distilling three pieces of investment news, including updates on inflation data, thoughts on the market’s reaction to the election, and expectations for a Fed rate cut.
1. August’s Unexpected Inflation Data
Inflation remains a hot topic.
In August, underlying inflation unexpectedly increased with higher prices for housing and travel.
The August CPI report contained both positive and negative news: goods disinflation continues, yet disinflation in housing rents remains stubbornly slow.
While it’s worth noting, investors do not need to fret over monthly inflation data. At Credent, our Investment Policy Committee watches the economy and markets, adjusting client portfolios as necessary.
2. The Market’s Reaction to the Election
The election is also top of mind for many, but as with any geopolitical event, staying invested amid volatility is essential.
In “Our View of 2024”, we noted that the fiscal policy backdrop would gain tremendous media coverage as part of the presidential election cycle, as showcased during last Tuesday’s first presidential debate.
The media can stir up concern in investors as they anticipate election results, but we believe the election’s impact on capital markets will be short-lived.
That said, investors should avoid making material investment decisions based on political rhetoric.
Instead, if you have questions about the election, connect with your advisor, who can offer an unbiased outlook that encourages a long-term perspective.
3. The Possibility of a Fed Rate Cut
The Federal Open Market Committee (FOMC) will likely begin its rate-cutting cycle at the September 17th-18th FOMC meeting.
Whether policymakers start with a cut of 25 or 50 basis points remains uncertain, but markets are pricing in a 120-basis point reduction by December.
Again, our Investment Policy Committee is monitoring the insights and key takeaways from policymakers following this meeting. Policymaker forecasts for economic growth, unemployment, and inflation will inform our views on the current state of the economy, asset allocation, and risk management decisions.
With the help of your financial team, you can stay up to date on economic and capital market developments without being in the weeds of portfolio management. This means more time to focus on what matters most to you.
If you have any questions about current investment news, reach out to an advisor using the form below.