Federal Reserve Raises Interest Rates – First Time in More Than Nine Years
In 2006, the Federal Reserve raised interest rates for the last time (23 rate increases in that last cycle). Since that time, the Fed lowered interest rates to zero or near zero and kept them there far longer than anyone expected.
Finally, in December of 2015, the Fed reversed course and raised interest rates by a 1/4% (25 basis points) in probably the most telegraphed move in history. The fixed income market reacted with a ho hum and kept on its merry way. At this point, no one knows if the Fed is leading the market or if the market is leading the Fed.
On the program this week, I discussed the Fed’s rate increase, delved into the high-yield bond market and then did a short primer on fixed income.
Gary Allen on Business – Sunday, December 20, 2015
Segment 1 – Fed Raises Interest Rates
Segment 2 – The Party is Over (High Yield Bonds Crumble)
Segment 3 – Fixed Income Primer
Segment 4 Fixed Income Primer
This marks the final show for 2015 and with that a big thanks to my producer Justin Siddhu for all the fine work this year. I want to wish all my listeners a very happy holiday season and a healthy and prosperous New Year! I can’t wait to get started on our new shows in 2016, which marks my 18th year on KNBR. Where has the time gone! – Gary
From experience, I know that most people do not understand the differences between a fiduciary adviser and a broker/insurance agent/salesperson.The average person would say they ALL sell financial products and charge commissions.The reality is actually far different. In my opinion, it is crucial for the general public to understand the differences and what it means to your financial future.
Fortunately, one of my business partners, Scott Simon has written a recent column on the subject where he nails it. Scott has been writing for Morningstar for more than ten years on fiduciary matters, but this column really hit home for me. He does a great job of dissecting the differences between the various adviser types and why it matters.
Scott’s column focuses on a retirement plan sponsor and her obvious confusion about the various types of advisers. Scott writes a sharp and brilliant letter to the plan sponsor in his column outlining in detail why it is important for everyone to know the difference and how it impacts their employees.
If I could, I would make this letter by Scott mandatory reading for every employer/plan sponsor in the United States. It provides a clear understanding of why they should care. Please feel free to share this post with anyone you know.
Here is a link to Scott’s most recent column for Morningstar.