interest rates Archives - Page 2 of 5 - Runnymede Capital Management

How does the Fed rate hike affect my stock portfolio?

Today the Federal Reserve is expected to hike rates for the 3rd time this year to 2.25%. This is good news for your savings account as you are likely to see a slight boost in your interest rates; but that is no guarantee as many major banks are still paying close to zero. More importantly, you may be wondering what impact the rate hike has on your investment portfolio, especially stocks. Is this a reason for concern?

Are you prepared for the next financial hurricane?

The media is focused on Hurricane Florence and its path toward the Carolinas and Virginia. Being a category 4 hurricane with 130 mph sustained winds, over a million residents are subject to mandatory evacuation due to risk of life-threatening storm surge, dangerous winds, and flooding. Our government is warning residents to take protective measures. This week also marks the 10th anniversary of the Lehman Brothers collapse; yet in the financial industry, investors are often told to stay the course and ride out the storm. Can you suffer through another bear market like 2000 or 2008 when the S&P 500 fell over 50%?

Is your bank still paying you nothing on your savings?

The Fed has been raising interest rates off its emergency levels for the past year and that should be good news for savers who can finally earn a risk free return. However, if you aren't savvy, then your large bank may still be “stealing” your interest by not paying you market rates. Do you know what your financial institution is paying on your savings account? If the answer is no, then you should check their website or your latest bank statement. Here is the ugly truth, Chase and Wells Fargo still are paying just 0.01% on savings accounts. That is robbery as they are pocketing your interest and dropping it into their profits which are in the billions. With money movement a simple mouse click away, you shouldn't allow the big banks to steal your interest.

1-year Treasury rates hit 10 year high

Today in the bond auction, the 1-year Treasury bill yield hit a 10-year high at 2.02 percent. This is good news for savers as they are finally starting to see some risk free returns on their money in the bank. Furthermore, new Fed Chair Jerome Powell testified on Capitol Hill and suggested that there will be 3-4 more hikes this year. That means that we may see 3 percent rates by year end. Powell said, “At the December meeting, the median [FOMC] participant called for three rate increases in 2018,” Powell said. “Now since then, what we’ve seen is incoming data that suggests a strengthening in the economy.”

Growth alert: New home sales hit 10-year high

Sales of new single-family homes surprised economists in October to the upside. Sales rose last month hitting their highest level in 10 years amid robust demand across the country. The Commerce Department said new home sales increased by 6.2 percent to a seasonally adjusted annual rate of 685,000 units. That was the highest level since October 2007 and followed September's strong 645,000 units. It was the third straight month of rising new home sales growth showing the strength underpinning the US economy.

Trump goes with safe pick for next Fed chair

President Trump made a safe pick for the next Fed Chair in Jerome Powell. This isn't the typical Trumpian move as he didn't make a non-traditional pick to replace Janet Yellen. We recently wrote about the possibility of John Taylor and viewed it as unlikely because Taylor would likely want to raise rates faster than the current Fed.