Will The Feds Lower Rates Soon?

Not a day seems to go by in our world without someone asking the question; “when is the Fed going to lower rates”? It kind of reminds me of a few years ago when we were waiting for the “pending recession”. Lol. All kidding aside, we do believe that the Federal Reserve will lower rates in the near future. The economics may back it up, but as is often the case, politics also seems to support it. Whether they start moving very soon, as we think they will, we believe the worst case would be next spring as a new chair of the Federal Reserve is selected.

While there are many things economically connected to interest rate cycles, including treasury yields, savings and lending rates, etc., the main thing for us is managing through how different investments behave in different environments. Two sectors we have shifted emphasis toward are dividend paying stocks and small caps. In addition, processing through bond market maturities and duration has led us to hopefully be poised for some good opportunities should rates start to fall. For our tax-sensitive clients, we think the municipal bond market offers a bright spot moving forward.

All in all, we come to work each day and work no matter the economic environment. However, we believe rates coming down in the near future is an easy call at this point, and are planning for it, barring something unplanned for and very out of the box.

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