The Fed raised rates 12 basis points, but the real market mover was the dot plot projection. Variable-rate loans cost more now, cash earns higher yields but still loses to inflation, and retirees should review income annuities and required returns with their advisors.
Here's what I do not want you to miss. The rate hike was priced in, 92% probability going into 2 o'clock yesterday. The market did not react to the hike. The market reacted to the dot plot. So here's the one-of-a-kind move. If you own a variable rate loan, your payment just went up. Pull the statement, know the number. If you have cash sitting in the checking account, that cash is now costing you more than yesterday. Money market yields, short-term yields, and CD yields all move up slightly with the Fed. Cash on the sideline is not free, folks. It is losing to inflation, and the Fed is telling you that they're trying to tame inflation, but it's not under control. If you're a retiree with a written plan, look at the income annuity page. Look at the guaranteed income slot. Look at what you need as a required return to be able to keep up with the cost of living. The re-quote in December may be materially better than the quote in June. This is a planning trigger, time to reach into your advisor and find out where it is.
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
How to evaluate AI growth stocks (Nvidia, Oracle, CoreWeave) beyond market hype
