Broker Check

801 West Bay Drive Suite 707 Largo, FL 33770

(727) 210-7795
marc.delia@premierplanninginc.com
Download Brochure
Premier Planning Partners Home
Premier Planning Partners Home
  • Home
  • About Us 
    • Meet Our Team
    • Financial Planning Philosophy
    • Business Philosophy
    • Investment Philosophy
  • Services 
    • A Blueprint for Business Succession Planning
    • Comprehensive Financial Planning
    • Levels of Partnership
  • Our News 
    • Premier Insights
  • Resources 
    • Retirement
    • Estate
    • Investment
    • Insurance
    • Tax
    • Money
    • Lifestyle
    • Glossary
    • Tax Resources
  • Contact
  • Account Access 
    • Client Login
    • Wealth Management Platform
    • American Funds
    • Lincoln Financial Group
    • Midland National
    • Nationwide
    • Ohio National
    • Symmetry Partners
Download Brochure

Interest Rates Market Update

February 27, 2021
Share |

You may have seen news reports about recent interest rate movements in the media. We want to keep you informed as to what is going on in the markets and offer our perspective on what that means for you and your portfolio.

Recent Interest rate movements
Over the past couple of months, interest rates have increased. The 10-year Treasury, a closely watched security that many consider a bellwether for rates, was yielding about 0.9% at the beginning of 2021. As of the close of trading on February 25th, the 10-year Treasury yielded 1.53%. While this doesn’t seem like much to some, a move of this size and speed has garnered a lot of attention in the relatively calm world of bonds. Similarly, this volatility has spread into the equity markets over the past few days.

Why is this happening?  
We have experienced an increase in economic activity over the past few months. Another round of stimulus checks along with mass distribution of the vaccine has brightened prospects even further. However, some fear that these factors could lead to an overheated economy, resulting in higher interest rates and inflation. The volatility has spread to the equity market because inflation and high interest rates have often been negative for business and profits.

What happens now?
While the perception of economic conditions has pushed rates higher, there is a powerful player on the other side of this who disagrees. Chair of the Federal Reserve, Jerome Powell, recently stated he believes interest rates will remain low for a considerable period and doesn’t expect inflation to reach the Fed’s 2% target for perhaps three years. This is part of the ebb and flow of investing as the market adjusts to an economic transition. We will, as always, be monitoring these events and any potential impacts to you or your portfolios.

What does this mean for my portfolio?
While parts of fixed-income allocations have come under modest pressure recently, there could be some positives from a longer-term perspective. First, it shows the economy may be strengthening, given the prospects of a return to a more normal environment. That is vital for future investment returns. Second, income from bonds is an important part of future returns for most investors, so sustained periods of near-zero interest rates aren’t doing us any favors. Near-term pressure on bond prices may take away from current returns but could result in larger payments in the years to come.

What should I do?
It is likely that we have already done a lot to prepare for this.  An important part of our process is to build portfolios in anticipation of changes in market conditions - not in reaction to them. We hope that the sudden and severe market declines of the pandemic followed by the powerful recovery to new highs has demonstrated that. As the world hopefully reopens and the economy adjusts, we will continue to be there for you.

As always, communication is key to our success. If you have any questions or concerns, we are here.

Sincerely,

Marc D'Elia CLU, ChFC, WMCP

 

CRN-3469924-022621
Sources of data: WSJ, US Federal Reserve, CNBC

Contact

Office: (727) 210-7795

Fax: (727) 245-6900

801 West Bay Drive

Suite 707

Largo, FL 33770

Send an Email

Quick Links

  • Retirement
  • Investment
  • Estate
  • Insurance
  • Tax
  • Money
  • Lifestyle
  • All Articles
  • All Videos
  • All Calculators
  • All Presentations

Check the background of your financial professional on FINRA's BrokerCheck.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named representative, broker - dealer, state - or SEC - registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

We take protecting your data and privacy very seriously. As of January 1, 2020 the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal information.

Copyright 2023 FMG Suite.

Terms of Service | Privacy Policy

This website is for educational or informational purposes. It is not intended as investment, legal, retirement or tax advice.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.

The LPL Financial registered representative(s) associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.