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Historic Changes in US Monetary Policy

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Marco Fragnito, Managing Principal | Robert R. Fragnito, Chief Operating Officer & Financial Advisor

Last week financial markets witnessed a historic announcement on the future of monetary policy in the United States. We want to emphasize in this alert the significance of Federal Reserve Chairman Jerome Powell’s speech on Thursday, August 27 at the annual Jackson Hole Symposium.

Powell laid out a new direction for the Fed in how it will perceive the impact of inflation on the US economy. The Fed’s new strategy puts more focus on labor market conditions over high inflation. Interest rates will remain low until inflation exceeds the Fed's 2% target threshold. This new framework responds to surprisingly low inflation averages over the past decade despite low interest rates, and large bond buying programs by the Fed.

We at MCF believe this is a positive development for financial markets and we will follow-up in the near-term with a more in-depth analysis on how this will impact portfolios for years to come.

If you enjoyed this article and have any questions please contact us directly at 949.472.4579, and feel free to forward this article to anyone who might be interested in our insight.

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MCF Capital Management, LLC is an independent, family-run, financial advisory firm that manages investment portfolios for individuals and businesses through quantitative market data analysis. 

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The opinions expressed here reflect the judgement of the author(s) as of this date and are subject to change without notice. Information presented here is for informational purposes only and does not intend to make an offer, solicitation, or recommendation for the sale or purchase of any product, security, or investment strategy. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here. The information being provided is strictly as a courtesy.