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Sound Money

Perspectives on Money, Credit, & Financial Markets

Perseverance in Down Markets

May 4, 2016

Categories: Asset Allocation, Bull Markets, Cash, Emerging Markets, Investing

The first Sunday in April is always one of my favorite days of the year as it typically marks the final round of The Masters Golf Tournament. This year, defending champion Jordan Spieth entered the final 9 holes of the golf tournament with a 5 shot lead. He had been flawless through 63 holes and it was almost a foregone conclusion that he would march through the final 9 holes and be the first back-to-back champion since Tiger Woods in 2001-2002. He bogeyed 10 and 11. Then he stepped to the tee of the famous 12th hole, a 155-yard par three, the middle hole of the vaunted “Amen Corner.” The typical Sunday pin placement on the front-right side of the green tempted Spieth and he promptly deposited two balls in Rae’s Creek and went on to post a quadruple bogey. He would never recover and finished 2nd

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Should the Fed Raise Interest Rates This Year?

September 16, 2015


The Federal Reserve concludes its two-day meeting on Thursday and will announce whether or not they plan to raise interest rates, specifically the Federal Funds Rate. The Fed has kept the Federal Funds Rate at zero since 2008 and hasn’t raised the rate in over a decade. Since discontinuing its Quantitative Easing (QE) program in October of 2014, the market has been obsessed with when the Fed starts to raise interest rates. This obsession makes sense as the Fed has used “forward guidance” as another monetary policy tool in recent years. However, I believe the first increase in interest rates is not nearly as important as the ultimate end to the rise in rates otherwise known as the “Neutral Federal Funds Rate.” So the question remains, will the Fed raise short-term interest rates this week or even this year? Predicting changes in interest rates and monetary policy moves is virtually impossible. However, in looking at the current global economic data, I would caution the Fed not to raise interest rates in 2015.

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