Welcome to our October Viewpoints, a monthly bulletin from PDS Planning to our valued clients and friends.  Our goal with each issue of Viewpoints is to provide you with a wide variety of perspectives on life and wealth.  Feel free to share with others. 

By Drew Potosky, CFP®

  • I Bonds Projection Lowered: Despite inflation remaining elevated and the Fed funds rate increasing at a faster pace than we’ve seen before, the next 6 months of I Bond interest is expected to decrease. Starting in November, the updated estimate is 6.47%, down from 9.62% for the previous 6 months. Read more for what you need to know about I bonds (Source: Keil Financial)
  • Of All Time: After the most recent inflation data came in hotter than expected – something I’m sure everyone is tired of hearing – many expect the Fed to raise interest rates another 0.75%. Even without the next rate hike, rates are rising faster than any other time in history. The late 1980’s may exhibit a similar slope near the end of the hiking cycle, but in no other time period have we gone this high this quickly from the start. (Source: Visual Capitalist)

  • Volatility Has Picked Up: Kurt wrote about it in the October Market Commentary, “Volatility has certainly picked up, with 25% of all trading days so far this year experiencing declines of 1% or more.” According to BlackRock, there have been 33 days of +/- 2% single day market returns, 18 of which have been negative as of the end of September. (Source: BlackRock)

  • Projected Interest Rates: We wrote about market predictions back in January, 2021. We began the post with a quote from economist John Kenneth Galbraith, “The only function of economic forecasting is to make astrology look respectable.” So with a grain of salt, below are the Federal Reserve projections through 2025. The expectation is the Fed rate will level out in 2023 and begin to tick down before the 2023 year end. (Source: WSJ)

  • Anyone BUT the Phillies: The Philadelphia Phillies are fighting their way to win the 2022 World Series, but would that mean America is heading towards a recession? The last 4 times a Philly team has won the World Series was 1929, 1930, 1980, and 2008, we’ve experienced an economic recession. But, the answer is obviously no. It’s a classic example of correlation not implying causation, but skeptics may still want to root for San Diego… (Source: Morning Brew October 5)

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