2020

Below is a brief summary of yesterday’s FOMC statement. Rates In their final meeting of 2020, the FOMC voted to keep the Fed Funds target rate unchanged within the 0.00% to 0.25% range. This outcome was widely expected, and all committee members voted in favor of the action. The forward guidance on monetary policy indicated continued support for maintaining the current target range through 2023. Inflation Today’s statement reiterated the Committee’s commitment to the average inflation-targeting approach that was announced in August and September. The language remained unchanged, as the statement again noted the Fed will “aim to achieve inflation…

Overview The pandemic-induced downward spiral in the credit and equity markets which began in February was halted largely on the strength of historic actions by the Fed and Treasury. By Mid-March they had announced rescue programs including bond buying, interest rates at zero, loan programs, stimulus checks, and enhanced unemployment benefits. The subsequent recovery has been remarkable, with the S&P 500 returning ~60% since the market low. Fed guidance has suggested rates will remain low for the foreseeable future and further stimulus appears likely. An accommodative Fed and Treasury is encouragement for investors to be less risk averse, helping sustain…

Please find the next blog in our monthly series that provides a review of the prior month’s market data, the state of the economy, and the global financial markets. Global Economy: Global equity markets rallied in the month as investors cheered a barrage of positive COVID-19 vaccine news. Encouraging data around the safety and effectiveness of three different vaccines more than offset negative sentiment from the ongoing surge in the virus which continues to see record cases in both the US and abroad. Logistical challenges remain around production and distribution of the vaccines, but a firmer timeline is beginning to…

Please find the next blog in our monthly series that provides a review of the prior month’s market data, the state of the economy, and the global financial markets. Global Economy: The US and Euro-area economies both soared to record GDP growth in the 3rd quarter following the previous quarter’s record declines. More recent indicators paint a gloomier picture as the coronavirus continues to surge, threatening additional lockdowns. Fed policy is likely to remain accommodative for the foreseeable future, but any new fiscal support has been delayed until after the election. Controlling the virus will ultimately be the key to…

Background Joe Biden secured the majority of the electoral college votes (exceeding 270) to become President-Elect. Currently, it seems likely that Republicans will maintain control of the Senate and Democrats will hold majority in the House of Representatives. A split Congress should lead to continued gridlock, making it more difficult for the new administration to speedily enact its full agenda. However, outstanding votes in Georgia could still swing the Senate back toward Democrats. Regardless of the outcome of the elections, the immediate task for the new President will be managing the nation’s economic recovery from the COVID-19 pandemic. Below, we…

This is our next article in a series about how to plan and care for our aging loved ones. In this piece, we discuss the potential day to day financial management assistance our parents, or aging loved ones, may need as they age. Below are questions we use with our clients to help guide discussions and provide advice. What are their sources of income? The easiest place to start here is with their tax return. The tax return tells all. We can quickly look at social security, pensions, what accounts are generating interest, dividends, capital gains, IRA distributions, etc. What…

Please find the next blog in our monthly series that provides a review of the prior month’s market data, the state of the economy, and the global financial markets. Global Economy: The US economy continues to rebound from the pandemic-induced recession but faces a new hurdle as Commerce Department figures show personal income falling with the expiration of government aid. Countries around the world continue to grapple with increasing case counts and new lockdowns. Fed policy is likely to remain accommodative for the foreseeable future, but new fiscal support remains elusive as Congress has failed to reach an agreement. Controlling…

Is History Any Guide?  We find ourselves in the fall of 2020 preparing for a general election with a historically unique set of circumstances: a global pandemic, an economic recession, the fastest equity market correction (and subsequent recovery) on record, multiple natural disasters, and social unrest. And if that wasn’t enough, we face the potential for a contested election outcome, which could add to market volatility through year end. Can history be of any use in such a year?  While no previous election year contains all of these same variables, we can find some insights by examining the individual effect…

Please find the next blog in our monthly series that provides a review of the prior month’s market data, the state of the economy, and the global financial markets. Global Economy: The pace of recovery has slowed over the summer with an increase in infections, but high-frequency economic data continues to show growth. While the US has managed to reduce its daily case count from the July peak, Europe now faces a virus resurgence brought on by easing restrictions and summer travel. Fed policy is likely to remain accommodative for the foreseeable future, but new fiscal support remains elusive as…