There were bound to be judgments made in response to Federal Reserve Chairman Kevin Warsh’s speech in Jackson Hole. And the consensus so far is that he’ll raise rates to fight inflation. The market is currently pricing in about two quarter-point rate increases by October 2027.
Take that with a grain of salt. Your Survival Guy is not in the interest rate prediction business, and those who are find themselves incorrect quite often.
You can’t count on predictions. All you can do is look at what’s right in front of you. Today that’s Dick Young’s North Star, a.k.a., the 90-day T-Bill yield, and the so-called “risk-free rate of return.”
The risk-free rate today is 3.9%. That’s below where the rates were in October of 2023, when they peaked at 5.63%, but if Warsh & Co. begin raising rates again, Americans could once again find themselves faced with higher short-term rates.
Action Line: When you want to talk about the risk-free rate and your investment portfolio, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
