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The Federal Reserve Board is the most wonkish group of economists you could assemble. To cut interest rates in the midst of a "booming" stock market, "great" unemployment numbers, etc., means that these very smart folks are listening to the other indicators that are screaming instability (inverted yield curve, slowing foreign markets, lack of middle class buying power, etc.).
We're headed towards a sizable correction. Either this move will help soften the blow or it won't have the intended effect and will eliminate one of the tools the Fed uses to help stimulate the economy when a recession hits. Time will tell, but I'd not be buying equities right now.
What it really signals is that the data that they pump out to the public is complete and utter garbage. Things are not as rosy as they seem in the weakest bull market in history. Cheap money didn't fuel real investment into the economy, but rather a ton of stock buy backs and investment into money losing tech startups. The wealthy that could invest heavily into the market were able to widen the gap between the top 1% and everyone else while the average American has seen no real wage growth in a generation, shrinking the middle class.You raise all the points that most people are concerned about. It doesn’t make sense to me to cut rates when things are going well, but again I’m far from a financial planner or working for the fed.
What it really signals is that the data that they pump out to the public is complete and utter garbage. Things are not as rosy as they seem in the weakest bull market in history. Cheap money didn't fuel real investment into the economy, but rather a ton of stock buy backs and investment into money losing tech startups. The wealthy that could invest heavily into the market were able to widen the gap between the top 1% and everyone else while the average American has seen no real wage growth in a generation, shrinking the middle class.
Depends on your time horizon. I'm 46 and have at least another 2 decades of investing in front of me. Every time the market has a good dip, like today and yesterday, I buy more S&P 500 ETF (e.g., VOO). Sure, we could tank 20% next year, or be up 20% next year, either way I'm staying in, but if we tank I'm buying more. Long term, nothing really compares to solid equities for wealth building. Even if someone went all in just prior to the financial crisis and the ensuing crash, they would be up wildly today. Unless the world ends, this will continue and you can only bet on the end of the world once. Just need to be able to bear the pain for a bit and keep a level head when the bottom falls out during a downturn.We're headed towards a sizable correction. Either this move will help soften the blow or it won't have the intended effect and will eliminate one of the tools the Fed uses to help stimulate the economy when a recession hits. Time will tell, but I'd not be buying equities right now.
every house of cards comes down eventually. don't sweat the lil feces. those who can will , those who can't won't and the wheels on the bus will continue to go round and round.Looks like the economy isn't doing as good as they would have you believe. I've always been a believer in watching what people do rather than what they say. In 2007 when Bush started giving away money calling it a tax rebate I knew the economy was bad so I took all my retirement money out of the stock market. When the crash came I made money and when the market started back up I put my money back in and retired two years earlier than planned. Not saying another crash is coming but definitely a correction. The trouble now is that the only real tool the fed has to stimulate the economy is to lower interest rates but rates are so low now that it doesn't do much to lower them more.
Tell that to the going rate, which is down over a 0.25% in the last week. Another week and I'm refi-ing.Long term debt, such as a mortgage, isn’t really affected by the FED overnight lending rate.
Mortgage rates are falling because the yield on US long-term notes and bonds is cratering, not because of the overnight lending rate. There is a big difference between how short-term and long-term debt rates are derived.Tell that to the going rate, which is down over a 0.25% in the last week. Another week and I'm refi-ing.
I means the Fed has gone political and my retirement funds lost $100k today, which means my wife is VERY unhappy.
You will get it back and then some....if that drop truley worries you, you may need to adjust how its invested. You have been in this game long enough to know that but thats still a hard pill to swallow.
With the 3% drop today I wish I had lost $100K.I means the Fed has gone political and my retirement funds lost $100k today, which means my wife is VERY unhappy.