Investing for the long-term: _ when the market is .
Kristi, a Senior Wealth __, talks about investment planning _ the COVID19 pandemic.
March 15th Fed Rate _
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By Ryan Lange, CFA, _. Senior Investment Strategist, Great __ Bank Wealth Management
As expected, the Federal __ raised the federal funds _ on this date by 0.25% to a new range __ 0.75% to 1.00% (from 0.50% to 0.75% previously). The _ markets already had this _ increase priced in with fixed income markets pricing __ a 100% probability of _ rate hike over the _ couple of weeks.
The key focus for _ for this Federal Reserve __ was not whether there be a rate hike, to gauge what we _ expect for the remainder __ 2017 and beyond. At beginning of this year, _ expectations were for two 0.25% rate hikes this year that has been shifting __ three rate hikes as data continued to strengthen. _ is highlighted in the curve below that shows yields on US Treasury across various maturities, from 1 month to 30 years. dotted yellow line shows interest rates across the __ maturities at the beginning __ the year while the green line shows the __ rate curve. Interest rates higher across the curve, __ the largest impact is __ short term rates.
The surprise coming from meeting is the reduced __ of future rate hikes. statements issued by the __ Reserve indicated that they _ continue “gradually” increase interest . This caused intermediate term to fall between 7 __ 12 basis points from _ before the rate announcement.
While the focus remains __ the interest rate increases, Federal Reserve has another _ at their disposal that _ can use with some _ on intermediate term rates. _ tool would be reducing size of their balance . Keep in mind that _ have been increasing their __ sheet since the financial _ in order to stabilize economy and keep interest low. This was done _ three quantitative easing (QE) . Since winding down the __3 program in 2014, they _ to maintain their balance at around $4.5 trillion is primarily made up __ treasury bonds and mortgage . As the assets that currently held mature, they still reinvesting those proceeds _ new assets. The Federal __ has not discussed a _ to allow these securities __ mature and not reinvest proceeds, but that is __ option at their disposal.
The chart below shows size of the Federal __&;_ balance sheet over the _ 10 years.
We continue to feel _ there remain many headwinds _ will make it difficult interest rates to increase __ a rapid pace. Fixed _ assets remain an important within portfolios to control .
To reach a member __ the GWB Wealth Management _, please visit https://gwb-online.com/bnk/digital/index.html/wealth-management/find-a-wealth-advisor/ .
Past performance is not of future results. Opinions _ are those of Great __ Bank Wealth Management and subject to change, not , and should not be recommendations to buy or _ any security. This newsletter __ limited to the dissemination __ general information pertaining to investment management services. Any , direct communication by Great __ Bank Wealth Management with _ prospective client shall be _ by a representative that __ either registered or qualifies an exemption or exclusion _ registration in the state the prospective client resides.
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