Fed Signals More Aggressive Action on Interest Rates

Fed Signals More Aggressive Action on Interest Rates

April 11, 2022
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Stock prices fell last week in response to the Fed’s plan to combat inflation, which staked out a more aggressive stance than investors had anticipated.

The Dow Jones Industrial Average slipped 0.28%, while the Standard & Poor’s 500 fell 1.27%. The Nasdaq Composite index dropped 3.86% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slid 2.05%.1,2,3

Fed Roils Markets

After a positive start to the week, stock prices turned lower on a more hawkish tone from Fed officials. On Tuesday, investors were surprised by comments from Fed governor Lael Brainard, one of the Fed’s more dovish members, who suggested the Fed could take a more aggressive approach with interest rates.

The unease extended into Wednesday when minutes of the last Federal Open Market Committee (FOMC) meeting were released, signaling a potentially faster pace in both interest rate hikes and the wind-down of the Fed’s balance sheet. Yields climbed steadily throughout the week as the bond market digested this new information. Particularly hard hit were high valuation stocks, as reflected in the 4% drop in the Nasdaq.

Fed Minutes

After raising the federal funds rate by 0.25% last month, the minutes from the March FOMC meeting made it clear the Fed is serious about fighting inflation with higher interest rates.

Fed officials indicated they might have hiked rates by a half percentage point in March had it not been for the uncertainty created by the invasion of Ukraine. Multiple Fed officials suggested that future rate hikes may reach 0.5%. Fed officials also discussed allowing up to a $95 billion monthly run off the Fed’s balance sheet, a faster pace than the market expected.4

This Week: Key Economic Data

Tuesday: Consumer Price Index (CPI).

Wednesday: Producer Price Index (PPI). 

Thursday: Jobless Claims. Retail Sales. Consumer Sentiment.

Friday: Industrial Production.

Source: Econoday, April 8, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Tuesday: CarMax, Inc. (KMX), Albertsons Companies, Inc. (ACI).

Wednesday: JPMorgan Chase & Co. (JPM), Delta Air Lines, Inc. (DAL), BlackRock, Inc. (BLK).

Thursday: UnitedHealth Group (UNH), The Goldman Sachs Group, Inc. (GS), Wells Fargo & Co. (WFC), Morgan Stanley (MS), The PNC Financial Services Group, Inc. (PNC).

Source: Zacks, April 8, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.



WEALTH WATCH: BONDS IN A ROUGH SPOT, LOOK TO GROWTH TO BEAT INFLATION

The HCM-BuyLine® is positive, and we are buying on pullbacks. As you can see from the chart below, the market is in a trading range, and the pullback we are seeing now is a normal reset after the move higher last week. We feel the odds are...[READ MORE] 5

This communication is issued by Howard Capital Management, Inc. It is for informational purposes and is not an official confirmation of terms. It is not guaranteed as to accuracy, nor is it a complete statement of the financial products or markets referred to. Opinions expressed are subject to change without notice. 

Beware of Phishing Scams

A phishing scam is when someone pretends to be a trusted source, such as a bank, tax preparer, or credit card company, to access your personal information.

To avoid falling victim to a phishing scam, here are some recommendations from the IRS:

  • Never open an email from a sender that you don’t recognize.
  • Never disclose personal information, including your passwords, bank account number, credit card number, or Social Security number, to anyone online. The IRS will never ask for this information via email.
  • When possible, use two-factor authentication to protect your accounts. Two-factor authentication requires a secondary form of identification (such as a phone number) to access your account.6

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

What’s the Deal With Downward Dog?

Even if you’ve never set foot on a yoga mat, you’ve probably heard of one of the most popular poses called Downward Dog.

The pose is so popular because it has many benefits, such as increased flexibility and spinal strength. In yoga, it’s a resting posture to let your muscles lengthen and straighten. It can help stretch your back, neck, hamstrings, and calves. You can sit in the pose without moving (a static hold) or “walk the dog,” which includes pushing your heels toward the ground to stretch out your calves.

If you’re new to downward dog, practice proper form by bending your knees and focusing on lengthening your back and arms. Ideally, your body should be in an inverted “V” shape. Eventually, you may be able to straighten your legs and have your heels touch the floor!7

Crab Artichoke Toasts

Servings: 24 toasts

Total Time: 25 mins

Ingredients

  • 1 (10-ounce) whole-wheat baguette cut into 24 (1/4-inch-thick) slices
  • 1/2 cup plain nonfat Greek yogurt
  • 3 tablespoons finely chopped fresh flat-leaf parsley divided
  • 1 teaspoon fresh lemon zest 
  • 1 tablespoon fresh lemon juice 
  • 1/4 teaspoon garlic powder
  • 1/4 teaspoon kosher salt
  • 1/4 teaspoon black pepper
  • 1/8 teaspoon cayenne pepper
  • 2 ounces gruyere cheese shredded, about 1/2 cup (fontina or gouda would be great too!)
  • 1 ounce Parmesan cheese finely grated, about 1/4 cup
  • 1 (14-ounce) can artichoke hearts drained, patted dry, and roughly chopped
  • 1 (4-ounce) can lump crab meat drained

Instructions:

  1. Place the oven rack in the upper third of the oven. Turn on the broiler to high. Line a baking sheet with parchment paper.
  2. In a large bowl, stir together the Greek yogurt, 2 tablespoons parsley, lemon zest, lemon juice, garlic powder, salt, pepper, and cayenne. Stir in the gruyere and Parmesan, then gently fold in the artichokes and crab. Taste and adjust seasoning as desired.
  3. Spoon 1 heaping tablespoon of the artichoke-crab mixture onto each baguette slice. Broil until the cheese begins to melt, about 3 minutes. Watch very carefully the entire time so that the toasts do not burn. Sprinkle with remaining 1 tablespoon fresh parsley. Serve warm or at room temperature.

Stay safe!

Footnotes and Sources


1. The Wall Street Journal, April 8, 2022

2. The Wall Street Journal, April 8, 2022

3. The Wall Street Journal, April 8, 2022

4. CNBC, April 6, 2022

5. howardcm.com, April 7, 2022

6. IRS.gov, August 26, 2021

7. DoYou.com, September 30, 2021

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

Copyright 2022 FMG Suite.

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