From the Desk of Todd Wike

Just as it looked like we were all ready for the “Grand Reopening” as Covid numbers improved, we’re hit with higher inflation, exploding oil and commodity prices, worrisome geopolitical tensions, and now the Fed hiking interest rates 25 basis points. We all knew an increase in interest rates was on the horizon, but raising rates earlier than we originally expected has added to an already volatile market. During the mid-March Federal Open Market Committee meeting, 2022 inflation projections were revised up from 2.7% to 4.3%, and 2022 GDP growth projections were revised down from 4% to 2.8%

The “Wall of Worry” now looks a bit different than at the beginning of the year – with brand new additions. I warned you it would never stop. 😊

The Fed raising rates, in and of itself, is not a cause for major concern. We haven’t experienced an increase since 2018 and it’s been widely expected that the Fed was going to have to raise them eventually. It’s one of the few, powerful tools that the Fed has at its disposal to try and combat inflation and help the economy through our next recession. We want higher interest rates to slow inflation. Still it’s a delicate balancing act between raising them just enough to curb inflation, but not done in a way that drastically slows the growth of our economy. Getting the timing and frequency of interest rate increases just right is particularly tricky. Fed officials anticipate at least another 150 basis points in rate hikes by the end of the year.

The market has been and will continue to watch and react to the timing and frequency of the anticipated interest rate hikes. If you’d like to learn more, I’m sharing helpful video commentary from Scott Brown, Economist, Raymond James, Fed raises interest rates for first time since 2018. Below is also a helpful infographic explaining monetary policy.

All of these factors combined are now leading to uncertainty regarding our economic growth, which has not been as much of a worry for the last 18 months. Although the Russia-Ukraine conflict has been a destabilizing factor in global markets, the Fed has repeatedly asserted that the U.S. economy and labor market are strong. We’ll be watching it closely and, of course, really hoping that the situation in Ukraine improves very soon.

In light of the ongoing conflict in Ukraine, I came across a list of charities in a recent article, and I thought it was worth sharing. We (Potomac Financial Group or Raymond James & Associates) are not associated with any of these organizations. I am simply sharing a list of links that I came across for anyone who might be interested in helping.

List of Ukraine Charities:

Ukraine Focused

Large, Globally-Focused but Working in Ukraine

Governmental

Faith Based

Small

Social Media

Take care,

Todd M. Wike, CFP®
CERTIFIED FINANCIAL PLANNER™
Managing Partner, Potomac Financial Group
2022 RJFS Chairman’s Council Member*

The information contained in this material does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Todd Wike and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Raymond James is not affiliated with and does not endorse the services or opinions of the various podcasts or applications discussed in this material. Chairman’s Council Membership is based on prior fiscal year production. Re-qualification is required annually. The ranking may not be representative of any one client’s experience, is not an endorsement, and is not indicative of advisors future performance. No fee is paid in exchange for this award/rating. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®,CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

List of Ukraine Charities:

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