Andrew Slimmon, Managing Director and Senior Portfolio Manager at Morgan Stanley Investment Management, joined Wealth! to discuss the Federal Reserve’s decision to keep interest rates steady. Slimmon explained that holding rates too long could potentially weaken the economy, but a key indicator of economic weakness has not yet been triggered. He emphasized the importance of watching the two-year yield, which can provide clues about the health of the economy. Currently, the yield curve is inverted, with the two-year yield higher than the ten-year yield. However, if the economy were to start showing signs of weakening, the two-year yield would start to drop, indicating potential trouble ahead.
Chair Jerome Powell made the announcement that the Federal Reserve will keep interest rates steady following a two-day meeting. The reason for this decision was a lack of progress on inflation. Slimmon provided insight into the Fed’s decision and offered advice to investors on how to monitor the markets as policy remains unchanged. He explained that holding rates too long could potentially weaken the economy, but he pointed out that a key indicator of economic weakness has not yet been triggered. Slimmon emphasized the importance of watching the two-year yield, which can provide clues about the health of
