Civil War Brewing at the Fed?

Posted in , By David Robinson

Financial eyes are on the upcoming Federal Reserve interest rate setting meeting, scheduled for September 17th. Barring a surprise, it will take place against the backdrop of the chilling effect of the China trade conflict on economic growth. The U.S. central bankers, who vote on interest rate policy, are not in complete agreement on the degree of threat to the economy. Some favor a rate cut of 0.50% or more, while others believe that the current economy, with strong consumer spending and near full employment, does not warrant any rate cut. Look for Chairman Powell to gather the votes for a 0.25% rate cut, as a measured attempt to support the economy.

Meanwhile, Hurricane Dorian is rampaging up the U.S. coast, leaving a trail of suffering and economic destruction. It has also caused us to take a second look at the risk of hurricanes, particularly in Florida, where a significant number of firm clients own homes and/or vacation. 

There is more: a political insider lays out his top ten fall issues and predictions; encouraging news for optimists; ideas for fall travel in New England and beyond; and two entertainment suggestions. We hope you read and enjoy!

  • Dueling Fed Views: As noted above, there is an internal policy debate at the Fed on how much stimulus, if any, is needed by the U.S. economy. One camp favors a more proactive effort to stimulate the economy with a hefty rate cut, while the other comes from a “minimum effective dose” (or no dose at all!) perspective. (Reuters) (Washington Post)
  • Predicting Recessions Isn’t a Science: Economists have a bad track record for predicting economic downturns. (fivethirtyeight.com) As far as that goes, it is not clear that a recession is inevitable. (New York Times)
  • The Risk of Hurricanes: Data shows that the likelihood of more destructive hurricanes has been growing. (New York Times) Given its geographical profile, Florida is especially vulnerable. (CNN)
  • Ten Dominant Issues and Predictions: Greg Valliere is a seasoned and pragmatic observer of our capital’s political and policy currents. His viewpoint tends to be slanted toward the impact on investors. Here he lays out his top ten issues and predictions for the fall. Note that you can subscribe to his e-newsletter for free, if so inclined. (AGF)
  • Optimism Increases Longevity: A recent Boston University study shows that optimists are more likely to make it to age 85. One question may be whether we can and want to learn to be more optimistic. This excellent article is less “fluffy” than you might think and digs into these issues. (NPR)
  • Autumn Travel: I refuse to concede that summer is truly over, as long as the days are reasonably warm. Autumn can be a great time to travel, if your family situation permits, and this article has several terrific ideas, including two in Maine.  (New York Times)
  • Thriller and Television Drama Recommendations: Karin Slaughter is a new author to me, but I loved The Last Widow. This thriller focuses on an investigation into a southern white supremist organization. Slaughter is good at both plot and character development. (Washington Post) The second entertainment recommendation is a Welsh detective drama called Hinterland. It may take some patience. At first it seemed heavy on “meaningful looks” and arresting but bleak scenery. Then it started to grow on us, and we found ourselves discussing it over dinner, meaning that we were hooked. (Wikipedia)

Feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.

david-robinson

About the Author David Robinson

A wealth advisor with more than 25 years of experience in the financial field, Dave serves as Robinson Smith Wealth Advisors’ Co-Chief Investment Officer and is a Co-Managing Member of the firm. As a Certified Financial Planner® and non-practicing attorney, he provides clients with deep expertise in areas including investment management and retirement planning.
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