As most know – I love numbers, finance and the economy. As we close quarter one of 2017, I thought it would be helpful to have an expert’s opinion on the economy and the financial markets. A close business partner of mine, Mollie Savage, was kind enough to take the time out of her day to chat with me on the economy and what the future may hold.
In your opinion, how is the state of the economy?
The economy is going through a lot of ups and downs right now given there are a lot of changes happening with the election. We are seeing that inflation is increasing and if tax cuts are approved then we are likely to see more inflation in the very near future, this would have to be approved by Congress. Orders for durable goods are increasing, however, we will have to compete with imported goods that are coming into our country at a cheaper price. We need imports and exports to continue and also to continue to have competitive pricing for our competitive advantage. Demand for housing is growing rapidly and people are buying more rapidly, despite the increase in rate change. Consumer spending has been increasing and it seems to be increasing, as well as it is estimated to continue to increase on the retail front.
The Fed just increased the interest rate again, what does this mean for the economy?
The reason the Fed would increase the interest rate is to counteract inflation and slow its progress. The reason they do this is so the economy doesn’t spiral out of control, we have this system in place to counteract the two extremes: depression and inflation. If the Fed raises interest rates it is only being done in order to help centralize, control and try and effectively manage the monetary system in the US and outside markets.
Recently the stock market hit its highest point ever, is inflation a concern?
The Market has done well recently but we can continue to see ups and downs in a fairly drastic manner. Mortgage rates are skyrocketing and yet people are still buying even with low supply. Consumer spending is increasing (helping the market) as well as treasury rates are increasing as well. If people continue to spend then the market will continue to look decent, however, there are reprocussions that I anticipate with tax cuts and imported/exported goods. If we are not competitive with our exported goods (pricing wise) then they market will suffer. If people are not spending (when given a tax cut) we will see corporations and small businesses suffer, its up to consumers to continue the increase in consumer spending in all areas; we will see if that happens, I am optimistic it will. Gas prices are rising, however, it is seen (from an economical point of view) that the supply will flatten- not necessarily elevating prices in that sector.
Mollie works for GCG Financial. She does full comprehensive financial planning and implement life insurance, wealth management and employee benefits when employers want to give their employees: a 401(k) and/or health insurance.
Mollie can be reached at mollie.savage@gcgfinancial.com or 720-937-0229.
Liz works full-time as a Real Estate Agent with LUX. Denver
