2 Aug 2019
US Interest Rates: PMI
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
This week marks the first interest rate cut by the US Federal Reserve since 2008.
Why did they reduce the benchmark rate by 0.25% to take the range down to 2.00% to 2.25%?
Returns on growth assets are up, especially for the 6 months to 30 June 2019 and interest rates are down.
The Purchasing Managers Index (PMI) may provide some insight because it is a measure of the prevailing direction of economic trends in manufacturing through its monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity.
When the PMI is falling it indicates that manufacturers are scaling down production because they are expecting reduced sales which can indicate slower economic growth.
Click for chart pack.
The key for investors with all of this market noise is to remain invested according to your appetite for volatility and then, when fear and panic take hold during the next financial catastrophe, to take advantage by buying more quality assets at discounted prices.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.
