Stock Market Mentor - Stock Market Mentor

By Brian Therien June 16, Driving most of the market's action was the Federal Reserve and several other important economic data reports. Prepare your portfolio for interest rate and stock market volatility by rebalancing to the mix of stocks and bonds that aligns with your comfort with risk and your long-term financial goals. As expected, the Federal Reserve Fed announced this week that it would increase the target range for its federal funds rate by 0.

This is the Fed's fourth short-term rate increase in the current expansion and its third increase in the last six months.

Weekly Market Update

FOMC members also published an updated version of their "dot plot" which revealed expectations for one more rate hike this year and three more in The Fed has been raising rates to bring them toward more normal levels, not to slow down the economy.

We expect the path of the Fed Funds rate to be dependent on economic data, with a focus on unemployment and inflation. While labor markets have been strong, inflation has been below the Fed's target, which may constrain future rate hikes. While the Fed directly controls short-term rates, its impact on long-term rates is not always predictable.

Treasury rates declined by 0. We expect long-term rates to rise slowly going forward. One reason for this is that long-term rates in the U.

Additionally, monetary policies in the rest of the developed world are mostly still providing more stimulus, which will likely keep international rates low. Prices have an inverse impact on rates, which we expect to dampen a sharp rise in rates. The Fed also released details on how it intends to unwind its balance sheet, which will modestly reduce demand for long-term bonds, but we don't expect a significant impact on rates. Despite the Fed's measured approach to tightening monetary policy, we believe the ongoing bull market for stocks can continue, supported by the growing economy, rising corporate earnings, and the relatively favorable interest rate environment.

It's important to remember that fixed-income investments play an important role in your portfolio by providing diversification, stability and income. With stocks near all-time highs, they may now be a bigger part of your portfolio than you intended — and you may buying stocks premarket to rebalance back to the mix of stocks and bonds that aligns with your comfort with risk and your long-term financial goals.

Market Update

Index Close Week YTD Dow Jones Industrial Average 21, 0. Past performance does not guarantee future results.

In a light week of economic reports, existing home sales will be released on Wednesday, and new home sales will be out on Friday. Investors should understand the risks involved of owning investments, including interest rate risk, credit risk and market risk.

The value of investments fluctuates and investors can lose some or all of their principal. Special risks are inherent to international investing, including those related to currency fluctuations and foreign political and economic events.

This information is approved for use with the public. It is intended stock market recap for the week informational purposes only. It is believed to be reliable, but its accuracy and completeness are not guaranteed.

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Back to Online Access Log Out. Enter search terms Close Search Search Site. Fed model of stock market valuation Jones Hide Menu. Set Country US En Set Country US En CA En CA Fr. Weekly Market Update June 12 — 16, The Fed Funds Rate's Future for Fixed Income As expected, the Federal Reserve Fed announced this week that it would increase the target range for its federal funds rate by 0.

The Week Ahead In a light week of economic reports, existing home sales will be released on Wednesday, and new home sales will be out on Friday. Important Information The Weekly Market Update is published every Friday.

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