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Inflation Came In Hot With A Special Message

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Hello, and welcome to our Market Alert Video for today, which is September 15, 2023. I hope this video finds you healthy, wealthy, and wise, and all as well for you. Thank you for watching. Before I get going, we’ve got it, we’re going to talk about inflation and the Federal Reserve and interest rates and all that. I just want to tell you a quick thing we went to, as you guys know, I think, I’ve been playing tennis now for 58 years. competitively for most of those years, I still do. And so one of the things that I like to do, and my family with me is to go to the US Open Tennis Tournament in New York. And so last weekend, we were there. And so we stay in the city. And then we take the subway train to the tennis center. And it’s about a 30-minute train ride. So when you’re on the train, you know, you don’t want to stand for 30 minutes. So you’re always on the lookout for, you know, open seats that you know, when it stops and somebody gets up. Well, sure enough, the train stopped, and somebody got up and it was an open seat. So, I looked at the seat and then I looked over and there’s this 80 year old woman right there, and she’s eyeing the seat as well. And we made eye contact. And in that moment we knew, it was on. So, you know, and one of the things that’s really important if you know sport is that it’s that first step, you know, basketball, tennis, that first step is super important. And I just gotta say her first step is a little slow. So I got my first step in boxed her out, sat in the seat, I won. Actually, that’s what happened in my imagination. What really happened is I said, Ma’am, would you like to sit in that seat? And she said, Yes. And I stood for the next half an hour. But I could have won. I had it, it was there.
Anyway, as we’ve been saying, for many months, now, we thought that inflation would bottom in June at around 3%, which it did, and that we said that we thought it would trend back up which it has been. And we said that by the end of this year, we thought it might be back around 4%. Well, it looks like we’re going to be wrong about that. Because when the numbers came out this week, inflation jumped to 3.7%. So it’s already almost at 4%. And we’re not even near the end of the year yet. So, we might eclipse that we might even head higher towards 5%. So, what does that mean? Well, it means that inflation is not done, mission is not accomplished, the Fed still has work to do. So, what work will they do? Well, we’re gonna find out next week, what their decision is on interest rates. Most likely, you know, there’s two scenarios, there’s three, they could lower, they could keep the same, or they could raise, we think it’s going to be either keep it the same or raise. And so that, of course, is what everybody’s interested in. Because if they raise interest rates, a lot more than people are expecting, we could see the detrimental effects of that cause a recession, cause a bear market, and all the things that nobody likes. And so therefore, all eyes are go be on the Fed next week, our view is that they probably will raise, we give that a 60% chance, and a 40% chance that they’ll stay the same. So that’s kind of where we are with inflation.
Now, what does that mean to our investments, we still see that by the end of this year, the stock market will be higher, our stock portfolio will be higher than it is today. And the reason why is because investors are kind of digesting the fact that inflation is not gone, that the Federal Reserve still has work to do. But also there’s still this optimism that towards the second half of next year, inflation will come down, interest rates will start to come down. And because of that investors want to be in now ahead of that. So we think the stock market should be okay. And rising towards the end of this year. Our bond side though, we still are not going to go back in because of what I just said, as the Fed raises interest rates, which they might do, bonds do not fare well in that scenario, generally. And so, we want to stay on our bond allocation, the percentage of our money that we normally would have in bonds, we’re going to keep that in the money market for the time being, we’re getting paid 5% there. So that’s not bad at all, while we’re waiting. So that’s kind of where we are right now. We’ll see. Now if the Fed does raise interest rates here next week, then we’ll get paid more in our money market funds. So that’s a good thing. So right now, what we’ve been doing this year has been correct in our view, our forecast has been spot on which is always nice.
And so we hope that you have the peace of mind of knowing that we’re on it, letting us worry about it for you so that you don’t have to. Now all of your clients of course, but those of you who are retired are SCWPerS. So to the SCWPer nation out there. I hope you are out there enjoying your second childhood. without parental supervision you’re playing, you’re enjoying, and you’re not worrying about all this boring financial stuff. You’re letting us do that for you. So, share this video with as many of your friends and your associates as possible. Please recommend us to them. We want to help as many people become SCWPerS as we as we can. It’s our it’s our noble obligation. It’s a good thing for us. We take great pride in helping people to get there. And we want to help you if you’re not there, and any of your friends as well. So thank you for watching this video and we’ll talk soon!

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of MMWKM Advisors LLC (d/b/a Retirement Planners of America). ©Copyright 2023