The Interest Rate Paradox Last month, the Federal Reserve reduced its key interest rate, and the consensus suggested (and still suggests) that the Fed will cut rates two more times before the year ends. A closely watched tool from the CME Group is pricing in a...

Happy Birthday The bull market turned two years old last week. Since bottoming, the S&P 500 Index has climbed almost 64% (through 10/17/24). The index is up 22% from its early 2022 peak, according to data from the St. Louis Federal Reserve. Following the 2022...

The Ebb and Flow of Inflation Let’s go granular and jump right into the numbers. Aided by a 1.9% decline in energy prices, the Consumer Price Index released by the U.S. Bureau of Labor Statistics (BLS) rose 0.2% in September. The annual rate slowed from 2.5% in August...

Investors Cheer the Fed’s Rate Cut The Federal Reserve implemented a significant policy shift last month with a larger-than-expected 50 basis point (bp, 1 bp = 0.01%) rate cut to 4.75 – 5.00%. This is the first time the Fed has begun with a 50 bp rate reduction since...

A Fed Rate Cut and Your Mortgage Rate A recent online advertisement from a major bank read, “The Fed just lowered interest rates. Could refinancing save you money?” There is an implicit assumption in the ad that the Fed’s half-percentage point rate reduction brought...

Boom—Fed Opts for 50 On Wednesday, the Federal Reserve announced a 50-basis point (bp, 1 bp = 0.01%) rate cut for the fed funds rate to 4.75 – 5.00%, its first reduction since 2020.  The announcement marks the end of the most aggressive rate-hike cycle since 1980 when...