Announcer:
4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money, we’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you, Brandy. Appreciate it.
Brandy Auterson-Hurst:
So there seems to be a lot of questions recently about when the Fed is going to start cutting interest rates. So what are you watching to stay informed?
David Nelson:
Well, you’re right, there’s been a lot of discussion. If we look just a few months back as far as the expectations at the end of ’23, most of the so-called talking heads, the experts, were calling for a four, five, six cuts, as far as the interest rates in 2024. It looks like now one to two is probably more realistic. I think the Fed has been pretty comfortable as far as that inflation continues to come down, and certainly the economy is doing well at this point in time.
The chart I brought today, it’s going to give people a little visual of the two different metrics that are used. I think most people think there’s one instrument. The CPI is the only thing the Fed looks at. That’s not necessarily the case. That’s one of them. The other is the Personal Consumer Expenditure. There’s a mouthful for you. But anyway, it’s basically two different tools looking at a lot of the same data, but in a different way. And both of them seem to be moving again in the right direction.
So the disparities between the two is probably the biggest challenge for the Fed, because as you see in the far right, they’ve spread out a little bit as far as on the very far right there, showing that there’s a disagreement as far as what those tools are seeing.
Brandy Auterson-Hurst:
All right, so how can viewers use this information when it comes to their investments?
David Nelson:
The big takeaway is, don’t try to anticipate where rates are going to go. A lot of people can lose a lot of money as far as trying to guess, and when they’re wrong, you can find yourself on the wrong end of the making money, versus losing money.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on Ourquadcities.com.