Happy Friday! In today’s email:

• September Interest Rate Cut?

• Global Debt Reaches $315 Trillion

• 2024 Stock Market Recap, So Far

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• Stock Market Recap For The Week (Week return as of market open, Friday August 23rd)

  • S&P 500 = +0.27%

  • Nasdaq = -0.13%

  • Dow Jones = +0.14%

September Interest Rate Cut?

8 times per year the FOMC meets to discuss decisions about the “stance” of U.S. monetary policy to help move the economy toward the congressionally mandated goals of maximum employment and price stability. One way they can do this is by changing the discount rate (which is the minimum interest rate set by the Federal Reserve for lending to other banks). The target rate is 5.25-5.50%, currently.

However, in less than a month, this is predicted to lower. According to the CME FedWatch Tool, there is a 0% chance rates stay the same after the September 18th meeting.

As of writing this, there is a 73.5% chance rates get cut by 25bps and a 26.5% chance rates get cut by 50bps.

While this is interesting to see, it is important to note two things:

1. This is just a prediction. In no way does this graph depict what will actually happen with rates after the September meeting. Just because this graph predicts 0% chance of rates not changing, does not mean rates are guaranteed to lower.

2. These prediction percentages change every day. If you look at the bottom of the image, just 1 month ago there was still a 3.8% prediction that rates stayed the same. There was also only a 3.8% chance rates lower by 50bps. Today, those chances are way different.

What is the takeaway? While getting an interest rate cut is coming sooner rather than later, there is no guarantees it will happen in September. The FOMC can do whatever they see fit, so if they believe rates need to stay where they are, then they will keep it unchanged. Also, I would say, short term, an interest rate cut is not as bullish as you may think…

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Global Debt Reaches $315 Trillion

What is the takeaway? Debt debt debt… all over the world the growth of debt is increasing at staggering levels. I prefer to be debt free 🙂 

2024 Stock Market Recap, So Far

This year has been full of ups & downs (like pretty much every year is), which can make us forget to look back on how the market has been doing so far in 2024.

News of a potential rate cut, news of jobs data report revised down, upcoming presidential election, war in Europe…

Let’s take a step back & look at 2024 so far…

It is always good to zoom out, especially when times are negative. Do you remember a few weeks ago (August 5th to be exact) when the market had that quick sell off? Well, the S&P has already recovered from that & is within 2% of an All Time High (as of August 22nd).

What is the takeaway? I know sometimes we can forget to zoom out when there is negativity around the market. Especially as we enter into the presidential election time, there will be a lot of conversation about the market. However, I am not too worried long term because here is what the S&P 500 has done under each president, ranging back to 1926:

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