Latest / Markets with Megan: A Quick Financial Markets Update / Wrapping Up the Year with Megan's Take on Inflation and Interest Rates | Episode 086 | 12-22-2023

Transcript

Wrapping Up the Year with Megan's Take on Inflation and Interest Rates | Episode 086 | 12-22-2023 · Markets with Megan: A Quick Financial Markets Update

• 0:02
  Megan Horneman: Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors.
• 0:06
  Megan Horneman: We're coming to you today with our regular segment of Markets with Megan, and we're coming remotely, so thank you for listening.
• 0:12
  Megan Horneman: We are going to discuss a little bit of the data we got this morning, specifically on the much anticipated inflation data that this is the PCE Core deflator.
• 0:23
  Megan Horneman: This is what the Fed pays the most attention to.
• 0:25
  Megan Horneman: On the headline level it actually declined on a month-over-month basis On at the core level.
• 0:31
  Megan Horneman: This is what the Fed's going to look at.
• 0:33
  Megan Horneman: This will strip out food and energy.
• 0:35
  Megan Horneman: This rose a little bit less than expected.
• 0:38
  Megan Horneman: That brings the year-over-year rate down to 3.2 percent.
• 0:43
  Megan Horneman: The expectation was for 3.3, but this is down lower than last month's, revised at 3.4.
• 0:49
  Megan Horneman: This is welcome news for the Fed.
• 0:52
  Megan Horneman: Inflation is definitely trending in the right direction.
• 0:55
  Megan Horneman: This is good news.
• 0:57
  Megan Horneman: The concern that we have is investors are pricing in now the first rate cut in March and then at least 150 basis points of rate cuts in the calendar year of 2024.
• 1:08
  Megan Horneman: Again, very optimistic view.
• 1:11
  Megan Horneman: We don't take that view.
• 1:12
  Megan Horneman: We're a little bit more cautious.
• 1:14
  Megan Horneman: That the Fed's going to have to keep I guess you could say, not their foot on the pedal, but they're going to have to rein in this optimism with investors, primarily because inflation is not at that 2 percent level.
• 1:27
  Megan Horneman: It's over 3 percent still.
• 1:29
  Megan Horneman: We have often warned that to get from this level down to that 2 percent is where it gets trickier.
• 1:35
  Megan Horneman: We will watch the data.
• 1:36
  Megan Horneman: We'll be back if there's anything necessary to report.
• 1:39
  Megan Horneman: But this is likely our last podcast for the year.
• 1:42
  Megan Horneman: We've recorded up close to 90 podcasts.
• 1:45
  Megan Horneman: We really want to thank everybody for tuning in and listening.
• 1:48
  Megan Horneman: It's been a great experience for us.
• 1:50
  Megan Horneman: It's been a lot of fun.
• 1:51
  Megan Horneman: We want to wish everybody a happy holidays and a very happy new year.
• 1:55
  Megan Horneman: We'll be back in 2024, and we look forward to these regular podcasts.
• 1:59
  Megan Horneman: If you have any questions or comments, please feel free to reach out to podcastsatverdencecom.
• 2:03
  Megan Horneman: Thank you.