Wednesday, July 6, 2022
The hot consumer price index (CPI) number last Friday has caused major damage to the equity markets. Volatility has remained elevated. There seems to be no relief in sight regarding the inflation numbers that we are seeing across industries—and, most importantly, in our daily expenses. The Federal Reserve will do what it can to increase […]
When the Fed bailed out the banks in 2008, interest rates dropped to historic lows. Many retirees were heavily invested in CDs and quality bonds earning a safe 6% interest, paying their bills, and enjoying their golden years. Overnight, trillions in CDs and bonds were called in, savers lost a major portion of their anticipated […]
Last week I spent a few days on the road with my travel trailer. On those long driving days, I like to listen to CNBC on Sirius XM. That service is the greatest thing ever for road trips, and listening is especially fun when the market is having a big down day. You would think […]
Last fall the Fed said it began “tapering” the amount of debt securities they were buying. This Wall Street on Parade (WSOP) headline reports; “Since the Fed Announced It Was ‘Tapering’ Last November, It’s Actually Added $332 Billion in Liquidity with New Debt Security Purchases.” The Fed says one thing and does another; they continued buying debt […]
Dear Investor, High inflation has become a driving force in our lives. It’s challenging to invest for income and keep up with inflation, especially outside of commodity-focused investments. It takes an extra step to ferret out investments that will perform well while inflation stays high. We need higher interest rates. But one category of income […]
The public is on to the Fed’s inflation game! The Fed called it “transitory”. Baloney! The Fed announced: “…it is accelerating its removal of monetary support for the economy, citing a rise in inflation that has seen the biggest jump in prices nearly 40 years. In a move to cool growth, policy makers also said they expect to […]
Dear Investor, Last week, the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac, reported that the average interest rate for 30-year fixed-rate mortgages jumped to 3.45%, up from slightly more than 3% a month ago, and 2.79% one year ago. Higher rates hurt traditional mortgage companies – refinancing business dries up, and […]
With earnings season coming up, we’re seeing some unusual action in big bank options. The expected rate increases from the Fed in 2022 mean that banks could see greater profitability from their interest rate spreads. This is leading to expectations of strong guidance from banks during earnings season. One strategist is using a covered call […]
The banking sector can be challenging to trade when interest rates are near zero. On the one hand, banks tend to earn more profits when interest rates are higher. On the other hand, if low interest rates lead to economic improvement, that’s good news for banks. The reason ultra-low interest rates are typically not the […]
The Federal Reserve’s ultra-low interest rate policy and quantitative easing programs are regularly debated among economists, armchair analysts, and everyone in between. Monetary policy can be pretty complex, with hundreds of variables to consider. So, it’s not a huge surprise that there’s so much disagreement on policy. Most studies have shown that the Fed’s increasingly […]
