As the Federal Open Market Committee (FOMC) prepares to announce its final interest rate decision of the year, the markets are buzzing with speculation. Jared Levy, Chief Markets Strategist at Peak American Financial, weighed in on what we might expect and how investors should approach the uncertainty.
Will There Be a Rate Cut?
A lot of people are expecting a rate cut, but I’m not so sure. There could very well be a dissent, and there’s a chance the Fed decides not to cut. That said, let’s assume they do cut. For me, the real story isn’t just the rate decision—it’s what happens with the 10-year Treasury yield.
I’ve been laser-focused on the 10-year because it’s such a critical barometer of our economy. It drives the cost of everything from credit cards to mortgages. And while things might feel pretty good for now, true long-term economic health depends on getting that yield down and creating a more accommodative rate environment. That’s easier said than done, and I think the Fed will have a tough time managing this balancing act.
My Trade of the Day: Caution First
As we head into the holidays, my “trade of the day” might surprise you: it’s nothing. I don’t recommend adding to positions this close to the end of the year. It’s a time to take stock of what you have, not take on new risk.
Personally, I rarely add to positions right before the Christmas holiday. This is the time to reassess your portfolio, evaluate what worked this year, and think about how you want to approach 2025.
What I’m Watching
While I’m not adding anything new this week, I’m still keeping an eye on some of my favorite big tech names. I like Google and Amazon, and I’ve talked about my enthusiasm for X before. These are solid companies that I believe have room to grow, but now isn’t the time to rush in.
Instead, I’m waiting for the new year to kick off. I want to see how market action unfolds and what signals we get before making any big moves.
Final Thoughts
Here’s how I’m approaching the current market environment:
- The FOMC decision is important, but don’t get too caught up in the headline. Keep an eye on the 10-year yield for a clearer picture of the economy.
- Now isn’t the time to make big trades. Use these final days of the year to review your portfolio and prepare for 2024.
- Big tech continues to look promising, but patience is key. Let’s see what January brings.
This time of year is about discipline. By taking a measured approach now, we can set ourselves up for success in the year ahead. Let’s stay focused and strategic—2024 has plenty of opportunities waiting for us.
CLICK HERE to watch Jared covering this topic on Business First AM.
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