Last week, we discussed the complex and dynamic landscape of the current economic environment, offering insights that could significantly impact investment strategies. This week, we’ll do an in-depth analysis of current economic intricacies, which can be overwhelming—but we believe knowledge is the key to making informed financial decisions.
CPI Report Highlights: In the latest Consumer Price Index (CPI) report, we dissect the numbers, including a 0.4% increase in the headline CPI, and a 0.3% rise in the core CPI. The role of housing costs and wages in shaping the broader economic landscape is emphasized. Notably, the core CPI, excluding shelter, has risen by approximately 2% over the past year, aligning with the Fed’s target.
Retail Sales and Consumer Trends: The September retail sales report showcased a 0.7% increase and solid performance in Q3. Yet, potential challenges loom as student loan repayments have resumed, and consumers are tapping into their pandemic savings, potentially leading toward reduced spending in Q4.
The Fed’s Influence: We explore the Federal Reserve’s role in the economic shifts and how higher interest rates on the long end of the yield curve may impact the broader economy.
Investment Strategy: We underscore the value of maintaining a long-term investment perspective, especially considering the daily barrage of news. We discuss the opportunities in the bond market with a focus on slightly longer-dated bonds, the appeal of U.S. Treasury and high-quality corporate bonds, and our commitment to prioritizing quality in equity portfolios.
Our goal is to provide valuable insights into the economic nuances that influence investment choices and outline our investment strategy to weather economic crossroads. If you have questions, please don’t hesitate to reach out to us.
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