This past week, the US Federal Reserve (Fed) announced that it would keep the benchmark interest rate at 5.5%, a move that was widely expected. However, the Fed also hinted at the possibility of a rate cut in September, as inflation cools and the labour market shows signs of slowing. The Federal Open Market Committee (FOMC) unanimously agreed to maintain the federal funds rate in the 5.25% to 5.5% range, where it has been for the past year.
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Weekly Update for the week ending July 12, 2024
Mr. Powell goes to Washington In a week of high anticipation, US Federal Reserve (Fed) Chair Jerome Powell took center stage in Congress, providing crucial updates on the future of rate cuts. During his Senate testimony on Tuesday, Powell expressed optimism as inflation approached the Fed’s 2% target, signaling potential for future rate cuts. He […]
Weekly Update for the week ending June 28, 2024
I am very happy with the nearly 19% gain in Microsoft’s (NASD: MSFT) share price since the start of the year. Normally, that would be a fantastic return for six months. But compared to the performance of another tech giant – Nvidia (NASD: NVDA) – it is modest. Nvidia is experiencing extraordinary times, thanks to […]
Weekly Update for the week ending May 3, 2024
This past week, the US Federal Open Market Committee (FOMC) convened to set monetary policy, most notably the US benchmark interest rate. These decisions have a profound influence on investors in both Canada and the United States. Generally, lower interest rates can lead to higher stock prices and a calmer market environment, and happier investors 😊. Conversely, higher rates can introduce volatility and encourage a shift towards more conservative investments.
Beyond investor sentiment, the FOMC’s decisions on the US benchmark interest rate can significantly influence the actions of the Bank of Canada (BoC) with regards to Canada’s interest rate. The relationship between these rates is critical because a substantial difference can have several repercussions on the Canadian economy.
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Weekly Update for the week ending April 19, 2024
April has not been the easiest month for us investors. We have seen losses across the board, with each week bringing its own set of challenges. The first week the markets dipped following strong US labour data, suggesting the economy might be too warm, which could deter the US Federal Reserve (Fed) from lowering interest rates. In the second week, higher-than-expected inflation data further soured the mood, heightening concerns about persistent high prices. This past week, comments from various Fed officials have added to market jitters. Fed Chair Jerome Powell emphasized that the current 5.5% interest rate could stay in place “as long as needed” to manage inflation, a stance echoed by other officials who see no rush to cut rates.
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Weekly Update for the week ending April 12, 2024
This past week was pivotal for investors. The latest US inflation numbers, measured by the Consumer Price Index (CPI), could swing the door open for a possible US interest rate cut in June – if it indicated that inflation was on the decline. Conversely, flat, or rising inflation rates could extinguish any hopes for a rate reduction in June.
In this week’s edition of our series for new investors, I will cover a few of the risks beginners should be aware of when they start investing. Alongside the latest US inflation report and what it meant for investors, let’s see what else happened this past week….