top of page
PWM-wo-Tag-Final.jpg

The Federal Reserve Raised Interest Rates - What's next?

Writer's picture: Jim Parks, CFP, AIFJim Parks, CFP, AIF

Few investors should have been surprised when the Federal Reserve raised interest rates after its May meeting.


Throughout April, Fed Chair Jerome Powell and several Fed Governors talked about the need to keep raising short-term rates to help manage hot inflation. They suggested that a series of rate hikes throughout the summer may be necessary to cool prices.


What should have surprised investors was the reaction by the financial markets.


As the May meeting came to a close, markets cheered as traders expressed confidence the Fed would be able to guide the economy to a “soft landing” and avoid a recession. But in the days that followed, stock and bond market volatility picked up as the reality of higher interest rates started to settle in.


What’s next? Fed Governors have prepared us for higher short-term rates in the coming months. But some economists point out that the bond market has already done some of the work for the Fed, meaning traders have already pushed longer-term interest rates higher. For example, the yield on the 10-year Treasury has doubled this year.

We’re in a transition period with the economy. High inflation is forcing the Fed into a cycle of raising interest rates. It’s best to prepare for more volatility as the markets adjust to what’s ahead.

Please reach out if you'd like additional insight. We’ll be happy to share more information.

Comments


Legal 

No strategy assures success or protects against loss. Diversification does not protect against market risk. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

 

All content is developed from sources that are believed to provide accurate information. The information provided in these materials is not intended to be tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and the materials provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Five Star Professional Wealth Manager Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of 2012-2024 Five Star Wealth Managers.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Private Advisor Group, a registered investment advisor. Private Advisor Group and Parks Wealth Management are separate entities from LPL Financial. 

The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: AZ, CA, CO, CT, DE, FL, GA, HI, IN, MA, MD, ME, MI, NC, NH, NJ, NY, OH, OR, PA, SC, TX, VA, WA, WV.

Contact

  • Facebook
  • LinkedIn Social Icon
  • LinkedIn Social Icon

Parks Wealth Management

 

Office: (201) 689-2020

Fax:(201) 689-6850

 

148 Prospect Street
Second Floor 
Ridgewood, NJ 07450

info@parkswm.com

Check the background of this firm on FINRA's BrokerCheck.

LPL Financial Form CRS

bottom of page