During our WSG Seven Signs of a Changing Economy™ conference call last month, I introduced the name Nick Timiraos, Chief Economics Correspondent at the Wall Street Journal. Nick’s forecast for what will happen next is so accurate that it would not be nutty to think he is fed what is next by the Fed (see what I did there 😊) as a trial balloon.
As I write this update, Nick’s latest post (just search his name and it pops up) states:
“Fed officials have clearly signaled plans to raise rates by .50 basis points at their meeting on December 14, 2022.”
Nick added, “Elevated wage pressures could muddy the debate over another +.50% versus +.25% in February and lead officials to pencil in more hikes next year.”
My guess is the Fed does increase the .50% next week. The markets have priced this in. But should they go +.75%, expect the market valuations to drop, perhaps the nearly 5% they gained when Powell implied a +.50% hike during that November 30, 2022, speech.
As for 2023, Timiraos’ quote suggests to the Fed will wait for more data and other anecdotal evidence before they let Nick tell us if it will be a +.50% or +.25% increase at the February 2023 Fed meeting.
I’m interested in your thoughts, comments, and observations. Feel welcome to call, email or stop by the office and say Hi.
James O. Lunney, CFP®
CERTIFIED FINANCIAL PLANNER™ Professional
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.