Election is over… Finally!

Whether or not your candidates won or lost, Americans everywhere can breathe a sigh of relief to the end of constant robocalls and text messages. Twenty-four seven campaign coverage can be replaced by real news that affects our lives. Most importantly, the markets can start to follow the economics! As of this writing, the Republican party has secured a majority in the Senate and is likely to also secure the majority in the House of Representatives, in addition to a decisive victory in the White House. This will enable President-elect Trump to implement his plans more easily after he is sworn in in January 2025. How these plans will affect the interest rate markets will be something we closely watch. 

As expected, the Federal Reserve (Fed) cut the Fed Funds Rate by 0.25%.The committee voted unanimously as they still feel that job gains are slowing. They are pursuing their goal of a “soft landing,” meaning avoiding a recession. During the press conference with Chairman Powell, he acknowledged that inflation was progressing downward, especially when examining three and six month averages. He made it clear that the Fed members understand that shelter is lagging and that there are some low replacement numbers in the next couple inflation reports that will make it mathematically difficult to show inflation lowering. He confirmed that the Fed’s loosening stance would remain undaunted by this stickiness in inflation. The market appears to be pricing in a 70% chance of another rate cut at the December meeting. 

Looking Ahead: 

Next week will see markets closed for the Veterans Day holiday on Monday

• Wednesday: Consumer Price Index (CPI inflation report)
• Thursday: Initial Jobless Claims, Producer Price Index (PPI Wholesale inflation report)

Now that the election is complete, let’s see if the markets can settle down and get back to following the economics.