Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, I Vanne Hampton. The first half of 2023 has flipped the script.

The Fed has paused interest rate hikes, a bull market, seems to have

chased away the bear market, and yields on super safe bonds have climbed. So what should investors

make up the first six months of the year? Morningstar Inc.'s chief markets editor and smart

investor newsletter editor. Tom Laura Seller is joining investing in sites. Let's start with the Fed

holding interest rates steady in June, but signaling more to come. Talk about their rationale.

Yeah, so what we've seen from the Fed is what a lot of folks are calling a skip, that the Fed has decided

to hold rate steady in June after raising rates unchecked since last March.

And the thinking is that they were just simply skipping the June meeting and will raise rates again potential in July.

This is different from what people are referring to as a pause or a pivot.

Lots of fun Fed-related jargon out there.

The basic idea here is that the Fed needs some time to assess the effect of their interest

rate increases on the economy.

The phrase we hear a lot is that monetary policy acts with a long and variable lag.

The translation of that is we don't know what kind of an impact, all those rate increases,

that five percentage points increase in the Fed funds rate will have in the economy. They need some time to see how

that will affect things. So that's where we are right now in terms of the Fed. And the Fed is saying

they're going to keep raising rates just going to be a lot slower pace. We'll have to see.

Well, three banks failed in the first half of the year. How is the stress in the banking sector

factoring into the Fed's decision? Well, this is an interesting situation. So the Fed acted pretty

aggressively back in March to try and staunch the bleeding related from those bank failures. We don't seem to

...