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◀️ Rising Inflation & Interest Rates: Reverse Wealth Effect Thumbnail

◀️ Rising Inflation & Interest Rates: Reverse Wealth Effect

◀️ Rising Inflation And Interest Rates Are Creating A Reverse Wealth Effect

The latest inflation numbers confirm that the prices of everyday goods and services are still rising despite Fed rate hikes and a slowing economy. Major stock market indices continue to be in or near bear market levels, with the S&P 500 down 25% year-to-date, while interest rates jumped further last week, with the 10-year Treasury yield rising above 4%. Whether the Fed can regain control of inflation while keeping the economy steady remains the central question for investors and economists. Since inflation data is only released monthly, GDP data quarterly, and the Fed only meets once every six weeks, it could be some time before this question is fully answered.

We discuss in this episode of The Wealth Effect Podcast:
🏦 Historical Interest Rate Cycles
📉 The Yield Curve & Leading Economic Indicators
🏠 Mortgage Rates and Residential Real Estate


Matt Faubion, CFP®

Founder - Wealth Manager

Show notes and charts:

The current rate-hike cycle is the fastest in decades

Economic indicators point to a slowdown

Mortgage rates are the highest since 2008

The bottom line: Investors should continue to expect Fed rate hikes in response to inflation, putting downward pressure on the economy in general and the residential real estate market in particular. Further, we do not see a "Fed Pivot" in the near term as we have yet to see meaningful improvement in core inflation.

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This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.