The End is Near...a phrase used over the years to warn others of various dangers that lurk ahead. From an economic perspective, the end is not all bad. Take interest rates for example, higher interest rates are ending. The Federal Reserve began the expected rate cuts in spectacular fashion with a ½ point reduction. While rates are still high, they also signaled that more rate cuts could be coming.
As a result of the cuts, the financial markets rallied to record highs, fueled by predictions of additional cuts of 1.75-2.50% by the end of 2025. While those rate reductions sound great, this exuberance is overblown. Remember, these same analysts have been calling for these massive cuts for several years now; none of which panned out. The market pricing of stocks in the U.S. is rich right now, due primarily to rate predictions and I would not be surprised if we see a pullback by the end of the year, or a period of sideways trading.
Let’s remember what rate cuts signify...the economy is slowing, and potential problems may be near. Unemployment has risen and worries about the job market are beginning to creep in. We will wait and see if the dreaded R word (recession) begins to sneak its way into some analysts' predictions. From my perspective, the economy continues to chug along...albeit at a lower rate of growth.
Multiple assassination attempts and a candidate that did not receive a single vote in their party’s primary elections. While I predicted an unusual election, nobody would have seen this election chaos coming. With one month remaining until election day, I would not be surprised if the madness escalates in the final weeks. The good news is the markets do not care who is elected, as history teaches us that markets perform well no matter which party controls the White House. The markets would also like one political party in charge of the House and the other to have a majority in the Senate, and I believe this will be the outcome.
The End is Near...we always have plenty to be concerned about. War in the Middle East and Ukraine, a dock worker strike that could rekindle supply chain problems and kick inflation into high gear again, and a political divide that only gets worse each year. Yes, there are plenty of problems, but do not forget that the United States has the greatest economy (and nation) of all time and will always be the world leader that all look up to.
The people of Western North Carolina could care less about the world’s problems...many simply want a hot shower and a home cooked meal. Amid incomprehensible destruction and heartbreak, we see videos of neighbors helping neighbors...the true spirit of humanity that is only God given. Let us learn from those who have lost everything and understand what truly matters.
Thank you for your business and more importantly your friendship. May God bless those who have lost loved ones with peace and warm memories of days gone by. If you know someone who could benefit from my message, please feel free to pass this along.
