Winter Is Coming...

With the most recent report showing inflation increasing at an annualized rate of 8.20% through September, the Fed recently announced a rate increase of .75% bringing the Federal Funds Rate to 3.7% and maintaining the announced target of 4.5%.  We are likely nearing the end of the rate increases and should see the pace of inflation slow.  The next meeting of the Federal Reserve is scheduled for December 13th and 14th with the market expecting another .50% rise in rates.
 
In energy news, the CEO of ExxonMobil Darren Woods was quoted as saying “There has been discussion in the US about our industry returning some of our profits directly to the American people. That’s exactly what we’re doing in the form of our quarterly dividend."  In response, President Biden floated the idea of a windfall profits tax on oil companies and promised further restrictions on them if the price of gas is not brought down.  Such an action has little chance of passing a divided Congress.
 
In COVID news, Shanghai Disney was put into a lockdown trapping guests inside the park in response to a positive case from a visitor.  More than 400,000 people were tested for the virus in response and another 1.3 million residents of Shanghai's downtown Yangpu district have been confined to their homes in preparation for testing today.
 
The war in Ukraine continues with a recent development being Russia’s participation in the grain deal made in July in response to what Russia claims is the use of the humanitarian corridor to strike at their surface vessels.  On Monday, twelve ships with 354,500 tons of grain sailed from Ukraine, and on Wednesday Russia re-entered the agreement.  Counties including Ethiopia are dependent on these shipments.
 
In economic news, the third quarter GDP came in at 2.6% well ahead of the Goldman Sachs estimate for GDP to show a 1.9% annualized growth in Q3.  While the headline number is encouraging, the underlying data is less so.  We saw a sharp pullback in housing and a deceleration of consumer spending from the prior quarter.
 
In closing, I’ll leave you with an unexpected positive story in the aftermath of Hurricane Ian. A Fort Myers resident, Ashley Garner, lost her wedding ring a few days before the landfall and although she, her husband, and three children looked for the ring, they didn’t find it. In the aftermath of the storm, her husband found the ring while cleaning up the debris.
 
John M. Gehri, CFP®, ChFC®