Home|Our Services|Why Pinnacle|Our Team|Our Clients|Client Center|Contact Us

Financial Briefs

More Articles  Printer Friendly Version

 

Watch The Fed Closely In The Months Ahead

In June, the economic expansion entered its eleventh year, officially setting a new record as the longest growth cycle in modern U.S. history. The previous record-setter was the 10-year expansion that bracketed the 1990s.

From The Great Recession of 2008, the worst spate of negative gross domestic product (GDP) since The Great Depression, the current growth cycle began in April 2009, and GDP grew only modestly until 2015, when real wage gains accelerated, and that has propelled stronger than expected growth for the U.S. for over four years. Though U.S. growth recently leveled off, it's been a spectacular expansion by modern standards.

The Federal Reserve was nimble in changing interest rate policy as trade war and as real war fears heightened, and the expansion is poised to continue into 2020, but the Fed's model of the economy has not always been accurate in the past. Far from it! The Fed has caused every recession since 1954 by making a monetary policy mistake and misreading the economy — tightening credit too much and choking growth.

Since this expansion began, the Fed's forecast for inflation has been incorrect. Fritz Meyer, an independent economist whose research we purchase, says the Fed's fear of inflation is overblown. If he's right, the Fed may come around and allow the economy to grow through most of 2020 without raising interest rates. Watch for the Fed to show less fear of inflation in the months ahead.


Email this article to a friend


Index
Business Owner Alert: Covid-19 Retirement Loans
Coronavirus Tax-Breaks For Individuals; Details Emerge From IRS
Coronavirus Tax Planning Alert
Amid The Awful News, Some Good Signs
How Negative Interest Rates In Germany Limit Pandemic Economic Damage To U.S.
The Current Economy And Outlook For May And June
To Fight The Financial Crisis Spawned By The Coronavirus, The Fed Is Utilizing Powerful New Tools
Financial Planning For The Long Run Amid The COVID-19 Epidemic
Business Owners: Paycheck Protection Program Update
Business Owner Alert: Paycheck Protection Program
Amid The Coronavirus Crisis, Nine Tax And Investment Tips
How Much Lower Can Stocks Go?
Coronavirus Fear And Investing For The Long Run
Harsh Truth: Covid-19 Correction Is A Tax Planning Opportunity
Financial Fears Over Coronavirus
Don't Be Deceived By New Tax Law's Name

This article was written by a professional financial journalist for Pinnacle Financial Group, LLC and is not intended as legal or investment advice.

©2020 Advisor Products Inc. All Rights Reserved.
© 2020 Pinnacle Financial Group, LLC | 823 Burlington Avenue, Western Springs, IL 60558 | All rights reserved
P: (708) 246-6262 | F: (708) 246-6288 jeanne@mypinnaclefinancial.com |
Disclosure | Privacy Policy | Contact Us

Securities offered through Purshe Kaplan Sterling Investments, member FINRA/SIPC, Headquartered at 18 Corporate Woods Blvd, Albany, NY, 12211.
NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL.  NOT INSURED BY ANY STATE OR FEDERAL AGENCY.