Rather, we are in a period of low unemployment, low interest rates, slightly rising wages, strong consumer confidence, reasonable inflation, and moderate economic growth. At present, we do not think such a catalyst is in place. Rather, we believe that there must be a catalyst – a major economic or geo-political event or series of events – that would lead to a recession or a bear market. Similarly, we do not believe our current bull market will end simply because it has been around for quite a while. We do not subscribe to the theory that our period of economic expansion should or will end soon simply because it is now the longest on record. There are several reasons why we are of this mindset.ġ. We believe the answer to this question is yes – at least for the foreseeable future (through mid to late 2020), barring any number of known and currently unknown economic or geopolitical uncertainties that could throw our economy or financial markets off-course. The length of the bull market and this period of economic growth has some investors concerned – is it possible this bull market and this impressive period of economic growth can keep going? equity bull market and we are still in the midst of the longest single economic expansion in our history. But, we are also more than 10 years into the current U.S. They also appear to be heading into 2020 with a decent head of steam. equity markets are poised to turn in an impressive performance for the year. Now, a year later and following 3 fed funds rate decreases, U.S. monetary policies all conspired to push equity markets markedly lower throughout the second half of 2018 and global economic growth and the potential for recession along with the trade dispute with China and tightening U.S. equity markets did not like hearing that interest rates would likely push higher in 2019. This capped off a 3-year period of gradual interest rate increases which brought the fed funds rate from 0.00% to 2.50%. “The Committee judges that some further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 % objective over the medium term.”
At the same time, the Federal Reserve noted in its accompanying press release that: One year ago, the Federal Reserve increased the federal funds (“fed funds”) rate by 25 basis points from a range of 2.0% – 2.25% to 2.25 – 2.5%. equity indices have turned in the following performance on a year-to-date basis: At the time of this writing (12/23/19), the major U.S. equity indices are now at or very near their all-time highs. equity indices were approaching bear market territory (down 20%+), many U.S.
In stark contrast to this time last year when U.S.
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