{"id":199,"date":"2019-08-19T00:00:00","date_gmt":"2019-08-19T00:00:00","guid":{"rendered":"https:\/\/www.retirementrefined.com\/index.php\/2019\/08\/19\/interest-rates-plummet-and-some-recession-talk\/"},"modified":"2019-08-19T00:00:00","modified_gmt":"2019-08-19T00:00:00","slug":"interest-rates-plummet-and-some-recession-talk","status":"publish","type":"post","link":"https:\/\/www.retirementrefined.com\/interest-rates-plummet-and-some-recession-talk","title":{"rendered":"Interest Rates Plummet and some Recession Talk!!!"},"content":{"rendered":"

Interest Rates Plummet!<\/strong><\/h4>\n

Incredible!\u00a0 According to the news media, approximately 25% of the worlds outstanding Government Debt has a negative yield, which simply means, you pay the Government to hold your money!\u00a0 A couple of weeks ago, that figure of $14 Trillion of negative yielding Government Debt rose to $15 Trillion in just 2 days!!<\/p>\n

 <\/p>\n

In Germany, you cannot obtain a positive yielding government bond (bund), and the same goes for Japan.\u00a0 France has negative government debt rates all the way up to a 14 year Bond.<\/p>\n

 <\/p>\n

\"\"Last week we saw the US 2 Year Treasury yield rise higher than the US 10 Year Treasury.\u00a0 Since 1950, this has been a precursor of upcoming recessions, all but one time since.\u00a0 In reality, the US 1-Month, 3-Month, 6-Month and 1 Year Treasuries have been offering a higher yield than our 10 Year for some time now.\u00a0 Some are now suggesting that we may see US Government interest rates also fall into negative yielding territory!\u00a0\u00a0 Certainly uncharted waters!<\/p>\n

 <\/p>\n

Last summer we were debating how high the 10 Year US Treasury would rise, especially when it hit 3.25%.\u00a0 Incredible to believe that as of last Friday, the yield had dropped all the way down to 1.54%.\u00a0 Certainly a great time to buy a home or refinance your mortgage!!!<\/p>\n

\u00a0<\/strong><\/p>\n

 <\/p>\n

 <\/p>\n

Recession Talk…<\/strong><\/h3>\n

This yield curve \u201cinversion\u201d that I just described above has the press suggesting and guessing when the next recession will take place\u2026..\u00a0 Opinions are all over the place!!!!!\u00a0 A lot of our manufacturing data recently has weakened, which is not surprising based on the targets of the tariffs so far.<\/p>\n

 <\/p>\n

When President Trump announced the latest round of tariffs on the remaining $300 Million of Chinese imports, that pushed rates down as these tariffs were directly targeted at the consumer, meaning additional tariffs on cell phones, sneakers, etc.\u00a0 Trump then backed off, suggesting he will delay the tariffs until December 15th<\/sup>, so not to hurt the holiday shopping season.\u00a0 To me this is a declaration that he admits the tariffs do in fact have a negative impact on our economy.\u00a0 Hopefully this won\u2019t continue indefinitely!<\/p>\n

 <\/p>\n

So the question is, are we headed for a recession and if so, when?\u00a0 Of course no one has the answer and I certainly do not believe that economic and market expansions have to end because of old age.\u00a0 They end because what people do!\u00a0 Remember the \u201cMORTGAGE CRISIS\u201d?<\/p>\n

 <\/p>\n

In the United States, unemployment is low and we are not being bashful to spend our money.\u00a0 I also believe that the millennial generation has helped push the expansion further as this generation is certainly not shy to spending their money.\u00a0\u00a0 So if we\u2019re spending our money and companies are profitable, what can stop the expansion?<\/p>\n

 <\/p>\n

My concern is a self-fulfilling prophecy.\u00a0\u00a0 I fear the tariff situation may escalate further; we have the Federal Reserve in unchartered territory, high stock valuations and plummeting interest rates.\u00a0 When the markets drop over a period of a few months, consumers start to get nervous and pull back on spending.\u00a0 This then leads to lower corporate revenue, lower corporate profits, increasing unemployment and of course, lower stock prices.<\/p>\n

 <\/p>\n

So for now, the self-fulfilling prophecy is the concern.\u00a0 Although it certainly makes a lot of sense to pay close attention to everything else going on!\u00a0 Especially with a Presidential Election around the corner.<\/p>\n

 <\/p>\n

 <\/p>\n

The Markets Last Week<\/strong><\/h3>\n

Certainly was not a good week for equities as the Dow Jones dropped (1.40%), the S&P 500 (.94%) and the Russell 2000 lost (1.24%).\u00a0 Over the pond, equities followed the short-term trend with the developed markets losing (1.45%) and Emerging Markets down approximately (1.01%).<\/p>\n

 <\/p>\n

Bonds on the other hand, because of plummeting interest rates rose .95% as indicated by the Barclay\u2019s Aggregate Bond Index.<\/p>\n

<\/h2>\n

<\/h2>\n

 <\/p>\n

 <\/p>\n

Question of the Week…<\/em><\/strong><\/h2>\n

IT\u2019S ALMOST FOOTBALL SEASON!!<\/strong><\/p>\n

\"\"For all of you die hard Eagle Fans, don\u2019t google it!<\/strong><\/p>\n

What was the Philadelphia Eagles first season in the NFL?<\/p>\n

    \n
  1. 1920<\/li>\n
  2. 1926<\/li>\n
  3. 1942<\/li>\n
  4. 1933<\/li>\n<\/ol>\n

    During that year, the Eagles finished 3-5-1.\u00a0 They were shut out 3 times by the New York Giants, the Portsmouth Spartans and the Green Bay Packers.<\/p>\n

     <\/p>\n

    Answer to last week\u2019s question\u2026!<\/em><\/strong><\/h2>\n

    What is the Oldest Hamburger Chain in the United States?<\/p>\n

      \n
    1. McDonalds<\/li>\n
    2. Burger King<\/li>\n
    3. Denny\u2019s<\/li>\n
    4. White Castle<\/li>\n
    5. Checkers<\/li>\n<\/ol>\n

      The answer is #4 – White Castle!\u00a0<\/strong><\/p>\n

       <\/p>\n

      For information on our upcoming September 2019 Educational Medicare Workshops, please click HERE<\/a>.<\/span><\/span><\/strong><\/h1>\n","protected":false},"excerpt":{"rendered":"

      Interest Rates Plummet! Incredible!\u00a0 According to the news media, approximately 25% of the worlds outstanding Government Debt has a negative yield, which simply means, you pay the Government to hold your money!\u00a0 A couple of weeks ago, that figure of $14 Trillion of negative yielding Government Debt rose to $15 Trillion in just 2 days!! […]<\/p>\n","protected":false},"author":3,"featured_media":201,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":"","footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts\/199"}],"collection":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/comments?post=199"}],"version-history":[{"count":0,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/posts\/199\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/media\/201"}],"wp:attachment":[{"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/media?parent=199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/categories?post=199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.retirementrefined.com\/wp-json\/wp\/v2\/tags?post=199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}