Is the Fed going to cut rates?

With 2019 more than halfway over, there are a few things that investors should continue to keep an eye on until year-end that could lead to market movements.

One of the biggest drivers continues to be Fed decisions – while they did not do anything in June, they did give a blueprint to rate cuts that might occur in July or later in the year. It looks like the stock market, and the bond market for sure, has priced in a 25 basis point ease in July, but we’ll have to watch to see where things go and whether they will in fact lower rates.

From an economic standpoint, there aren’t many triggers that are flashing “red” and raising concern for a downturn, it’s quite the opposite. We are still running up on the economy and there is nothing on the horizon that would initiate making changes to investments right now.

Globally though, there are some items to watch — we are seeing negative interest rates throughout the world and when that happens, it makes it difficult for the U.S. to compete. We also have trade issues, the Iran sanctions, and at any time, a major geopolitical event could shift the market sentiment (either positively or negatively).

Investors should remain cautiously optimistic and long-term oriented – continue to ladder purchases, like a mix of longer-dated securities coupled with shorter-term securities that can be reinvested once we have more clarity on domestic and global movements.