October 2024 Financial Bullet Points

Written by Bob Barber, Matthew Barrovecchio, and Don VandeVanter; Prepared on September 26th, 2024

The Bullet Points for October are:

1. 1. Fed Lowers Interest Rates: As expected, the Federal Reserve lowered the Federal Funds rate in their September meeting, ushering in a season of increased confidence that inflation is trending towards the target of 2%. Somewhat unexpectedly, the Fed decreased the rate by 0.50% instead of 0.25%. Last month’s bullet points mentioned that our portfolio model updates in August were made strategically before a likely interest rate decline in September.
   2. Yield Curve Normalization: While we are still in modern history’s most prolonged yield curve inversion (when short-term interest rates are higher than long-term rates), parts of the curve are beginning to normalize. In early September, 10-year Treasury rates were higher than 2-year Treasuries for the first time in 25 months. This gives further hope that the economy may have a soft landing, as opposed to the recession many economists were forecasting.
   3. The Housing Market: Lower interest rates may soon lead to more existing homes being listed for sale. In recent years, many sellers with low mortgage rates have been reluctant to sell due to the fear of taking on a higher rate for their new home. As rates decrease, this could increase inventory, especially for homes priced at $500,000 and above. This situation could benefit buyers but may be challenging for sellers.
   4. CD & Money Market Rates: For the foreseeable future, short-term CD rates of 5% or higher seem to be a thing of the past, as the decrease in the Fed Funds rate has generally brought six-month CD rates closer to 4% (as of 9/24/2024). As many Money Market Funds begin to follow suit, investors will continue to evaluate the risk-free rate of their emergency savings.
   5. Investing with political uncertainty: It’s important not to abandon a long-term plan due to short-term fears. Regardless of the election outcome, God is still on His throne, and our lives shouldn’t be driven by fear or political changes, including the outcome of a Presidential election. Many politicians make promises they can’t keep just to gain power. As 2 Timothy 4:3 says, “For the time will come when people will not put up with sound doctrine. Instead, to suit their own desires, they will gather around them a great number of teachers to say what their itching ears want to hear.”
   6. Continuing Education and Scriptures. This month’s programs for Christian Financial Perspectives are listed below along with our Scriptures for the month:
      • Ep 210 – 10/10/24 – The Dangers of Fast Money
      • Ep 211 – 10/24/24 – The Fundamentals of Financial Planning
      • Luke 16:10 – Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much.
      • Proverbs 15:22 – Plans fail for lack of counsel, but with many advisers they succeed.

Remember, we moved to releasing episodes every other week to give people more time between episodes to listen or watch. To tune in, search “Christian Financial Perspectives” on almost any podcast platform or YouTube.
Visit our channel: www.cfa.lc/yt

Until next time, have a great October as temperatures begin to fall, the leaves change colors and Fall celebrations begin.

If you would like further explanation of any of the bullet points mentioned, please call or text (830) 609-6986 during business hours or email us by clicking here.

Bob Barber
Senior Wealth Advisor & President

Matthew Barrovecchio, CFP®
Senior Wealth Advisor

Don VandeVanter, CPA
Wealth Advisor

Christian Financial Advisors^®