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Articles That Matter:

Federal Reserve Raises Interest Rates
by Geoff Garbacz

June 14, 2018

Yesterday the Federal Reserve Open Market Committee (FOMC) raised interest rates and announced that they were likely to raise rates two more times. Personally, I am in the camp of one more interest rate rise.

Also, the FOMC announced that starting next year they will do a press conference after every meeting. A big change took place several years ago when Federal Reserve Chairman Janet Yellen moved to holding a press conference on a quarterly basis.

FOMC Decision

The biggest concern is that as they raise interest rates the yield curve between 2 year and 10 year bonds get inverted. In other words, the 2 year has a higher yield than the 10 year. That would signal a recession down the road. The good news is that the stock market should rise a decent amount after the inversion before it begins to head lower.

We need to watch this closely.

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