We had an outstanding start to 2025 with January bringing the S&P500 up by over 2% and the US Aggregate Bond Index up over 0.50%. In a perfect world for me, every month would give us those returns! We are still bouncing around those record highs so like I’ve said the past few months, let’s all be sure we’re at the proper risk tolerance. We go over it every annual review, but feel free to let us know if you have any questions.
Here are a few key things that happened in January:
- Wholesale inflation numbers (PPI) were released from December, and they rose less than expected.
- Consumer prices (CPI) also rose less than expected. Perhaps inflation is finally on the mend?
- The Federal Reserve is now in stand-by mode for interest rates changes. They seem to see CPI and PPI getting closer to their target, but don’t want to be too aggressive lowering rates. Inflation is still elevated over their target, and they’re trying to avoid another massive calibration error leading to a longer inflationary cycle.
- If you can recall from a past article, the money supply affects inflation quite a bit. Here’s a short article that explains M2 money supply, and it’s inflationary effects.
- Tariffs have been in the news lately. If you’re wondering how and/or if they actually affect inflation, here’s an outstanding explanation from Forbes.
Happy Valentine’s Day to you! If you’re on the ice spearing or even sewing your next blanket, feel free to send a pic or two into the office. We love to see what everyone is doing.
We wouldn’t be here without amazing clients like you!
Larry Mroczkowski
President
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All investing involves risks, including the loss of principal.