Fed Raises Interest Rates by 75 Basis Points

November 4, 2022

Dear Friends and Clients,

The U.S. Federal Reserve (Fed), in keeping with its aggressive efforts to curtail inflation, announced its fourth consecutive interest rate hike of 75 basis points (bps) at the November Federal Open Market Committee (FOMC) meeting. That brings the cumulative increase year to date to 375 bps and marks the sixth interest rate hike since March 16, when the Fed’s tightening cycle commenced.

“The Fed is expected to continue raising interest rates at least one more time this year, and then one to two more increases next year. During its December FOMC meeting, we expect the Fed to increase the federal funds rate by another 50 basis points, and then two more 25 basis point increases in February and March of 2023,” said Raymond James Chief Economist Eugenio J. Alemán, Ph.D.

As inflation concerns and talk of a recession lingers, there’s some uncertainty in the air. You may have asked yourself: “How will these factors impact my portfolio?” It’s a normal question to pose when the word “recession” is whispered, and market fluctuations are ever present. As your financial advisor, we’re here to help assuage your concerns and work with you through this period.

While what’s transpiring may feel out of the ordinary, we have seen market pullbacks and corrections before. They are necessary to sustain a healthy market.

You’ll likely recall in our previous conversations our emphasis on developing a tailored financial plan that’s focused on long-term financial goals. What’s currently happening illustrates the importance of that approach.

“We encourage investors not to focus on daily headlines and certainly not to make investment decisions based on those headlines,” said Raymond James Chief Investment Officer Larry Adam. Here are some key facts to bear in mind:

  • Markets are cyclical, and long-term returns have been historically positive

  • Missing even a few trading days in an attempt to time the market can significantly impact your returns

  • Temporary pullbacks may present an opportunity to strategically add to your portfolio

As always, we look forward to speaking with you to discuss these matters as well as address any questions or concerns you may have.

Thank you for the trust you place in us.

Sincerely,



Investment advisory services offered through Raymond James Financial Services Advisors, Inc. and Goodrich and Associates, LLC. Goodrich and Associates, LLC is not a registered broker dealer and is independent of Raymond James Financial Services, Inc. All expressions of opinion reflect the judgment of Raymond James’ Chief Economist and are subject to change. There is no assurance the trends mentioned will continue or that the forecasts discussed will be realized. Past performance may not be indicative of future results. Economic and market conditions are subject to change. Investing involves risk, and you may incur a profit or loss regardless of the strategy selected.