Summertime is here and you might be in the middle of planning vacations, outdoor activities, or other forms of fun. Meanwhile, the economy might have you on edge, especially with the recent interest rate hike. In a move unseen since 1994, the Federal Reserve has taken an aggressive stance toward inflation by raising the key interest rate by three-quarters of a percentage point.
Investors initially seemed cheerful, but stock prices soon fell as the reality emerged that interest rates would continue to rise.
With consumer prices soaring, pushing short-term rates higher is an attempt to slow economic growth while attempting to avoid a recession. Fed Chair Powell said that he expects rates to go up again at the July meeting and indicated that the Fed would take future decisions as they come.
In times like this, it’s good to remember Warren Buffett's 2016 quote:
“Don’t watch the market closely.”
You can also find comfort if you've done as we have and considered volatile markets when designing your financial strategy.
Summertime is also a good time to consider a few financial matters. Here are some questions to ask yourself mid-year.
- Goals still the same for 2022? Has market volatility affected your goals? Note any changes since the first of the year that may warrant reviewing your goals.
- Credit score looking good? Double-check your credit score for any red flags. This can be a good way to catch issues like identity theft early.
- Contributions on track? Consider increasing your contributions to any personal or workplace-sponsored savings plans if it suits your goals.
- Scheduled spending still make sense? Look at any impacts you've felt due to market volatility. Do your plans for the rest of the year align with reality?
If these questions have you thinking, please feel free to reach out. We're happy to discuss your financial picture in the summertime or any time.