The Russian invasion of Ukraine has made the Fed’s interest rate decision a little more complicated.
The Fed
appears set to raise interest rates by 0.25% at its March meeting. Up until
recently, there was talk by Fed officials that the economy needed a 0.5% bump
to help manage inflation.
Energy prices
have been rising since Russia began to assemble forces at the Ukraine border.
As prices rise, consumer discretionary spending trends lower as businesses take
on higher costs. (Remember, consumer spending accounts for a big chunk of our
overall economy.)
Higher energy
prices, higher commodity prices, and the prospect of slower economic growth due
to lower spending place the Fed in a bit of a pickle; the inflationary impact
of these factors could be considerable.
Fed Chair
Jerome Powell testified before Congress that he still sees interest rate hikes
ahead but acknowledges that geopolitical events have interjected uncertainty
into the Fed’s outlook.
I work with a team of professionals who monitor the Fed and help me interpret its signals about the economy. If you’re feeling a bit unsettled, please reach out. Some think that it’s best to be proactive at times like this. We can discuss your thoughts and compare them with your overall strategy.
Taylor McClish may be reached at (503) 239-3060 or Taylor.McClish@cunamutual.com
Oregonians Financial Planning Website
This material was prepared by MarketingPro, Inc. for use by Taylor McClish.
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