Weekly Update:

Good morning!

We began this volatile week with a quote by Thomas Edison. It is fitting as today, at its December meeting, the December Federal Open Market Committee (FOMC) is releasing their decision to raise interest rates or to leave them unchanged. In a lot of ways, the FOMC will let us know if the light bulb is on or not.

As I look at the US Treasury yield curve this morning, we are inverted. The 2-year is yielding 2.650%, the 3-year is yielding 2.633%, and the 5-year is yielding 2.648%. This is a strong warning by the bond market to the FOMC that there are problems brewing. Is it the large amount of government debt? Is it the large amount of subprime corporate debt? Or neither? We will soon find out.

The Federal Open Market Committee (FOMC) will announce their decision at 2:00 pm today. We expect that the market probability of 67% will follow through and that the FOMC will raise the Federal Funds rate by 0.25% to 2.50%.

We will be in contact with you when the FOMC releases their decision.

Contact your MFA advisor to discuss ways to succeed in this volatile market. All of us at McQueen Financial are dedicated to your long-term success.

Have a great week.

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