Following a two-day meeting, the Federal Reserve decided to keep interest rates steady citing a lack of progress on inflation. Chair Jerome Powell made the announcement, and Morgan Stanley Investment Management Managing Director and Senior Portfolio Manager Andrew Slimmon joined Wealth! to provide insight into the Fed’s decision and offer advice to investors on how to monitor the markets as policy remains unchanged.
Slimmon explained that holding rates too long could potentially weaken the economy, but he pointed out that a key indicator of economic weakness has not yet been triggered. He emphasized the importance of watching the two-year yield, which can provide clues about the health of the economy. Currently, the yield curve is inverted, with the two-year yield higher than the ten-year yield. However, if the economy were to start showing signs of weakening, the two-year yield would start to drop, indicating potential trouble ahead.
For more expert insight and the latest market action, viewers can click the link provided to watch the full episode of Wealth! with Andrew Slimmon.