Interest Rates Remain Steady – For Now

Written By: Anna Carlson

Quarterly economic projections show a majority of Fed officials who participated expect rates to fall to just 5.1 percent by the end of 2024.

Policymakers say they need to have “greater confidence” that inflation is coming down before lowering interest rates. While inflation has fallen somewhat, it’s still hovering around 2.8%, which is well above the Fed’s 2.0% target.

The Federal Reserve recently voted to hold interest rates steady and has scaled back on the outlook for rate reductions later this year. That means there’s still a nice window of opportunity to take advantage of these 23-year high interest rates.

Between the interest rate environment and current economic conditions, moving money into fixed products is a strategy worth exploring. If you feel you’re too exposed to the stock market, now is a great time to make some adjustments to your investments. One of the best ways to take advantage of higher interest rates is to invest in a fixed or fixed index annuity now. A fixed annuity will enjoy the same rate for the life of the policy, regardless of any future moves by the Federal Reserve. A fixed index annuity may give you less & less upside potential with any future rate reductions, so they’re also an especially attractive option while interest rates are high. The same goes for lifetime income annuities – the annual income payments are higher when the same goes for interest rates.

Just like most everything related to our economy, we know interest rates have a cycle. Sometimes they dip, penalizing savers. Right now, though, they’re at a 23-year high AND the Fed doesn’t plan to make many changes soon. So now is an opportune time to explore fixed products & investments, allowing you to “lock in” at these nice rates, while we still have them.

Say What?

The number of Americans looking to retire abroad has tripled over the past 30 years. Social Security recipients living outside the U.S. increased to 450,000 as of 2022.

This week in history

1943 – Happy 80^th birthday to Mick Jagger. The Rolling Stones front man, actor, and film producer was born July 26, 1943, in Dartford, Kent, England.

1958 – NASA (National Aeronautics and Space Administration) is created by the National Aeronautics and Space Act to make sure America will win the space race. 11 years (and billions of dollars) later, Neil Armstrong stepped out of the lunar module Eagle and onto the moon’s surface on July 20th, 1969.

1965 (July 30) – President Lyndon B. Johnson signed Medicare into law.