Wednesday - January 29, 2025
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 29 January 2025
⏱️ 6 minutes
🧾️ Download transcript
Summary
Market Reactions to Fed Policy Announcement
In this episode of Dividend Cafe, Brian Szytel discusses the market reactions following the Federal Reserve's policy announcement on January 29th. The episode addresses the modest sell-off in the Dow, S&P, and NASDAQ, and the flat interest rates. Brian highlights the Fed's decision to maintain the interest rate and shift focus to employment risks over inflation. He argues that the positive correlation between interest rates and economic growth is currently balanced. The episode also touches on the record $1.2 trillion goods deficit in 2024 and provides insight into comprehensive wealth management services offered by Brian's firm.
00:00 Introduction and Market Overview 00:20 Federal Reserve Meeting Insights 00:49 Economic Indicators and Market Reactions 02:35 Trade Deficit and Economic Health 03:15 Q&A: Beyond Dividend Growth 03:34 Comprehensive Wealth Management Services 04:05 Conclusion and Contact Information
Links mentioned in this episode: DividendCafe.com
Transcript
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| 0:00.0 | Welcome to the Dividend Cafe weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. |
| 0:10.0 | Welcome to Dividend Cafe. This is Wednesday, January 29th, and Brian Saitel with you in the last couple days here of the month. |
| 0:22.6 | And already I'm going to say this year is flying by because it seems like it really is. |
| 0:27.6 | We had a negative day in markets, although they were off the lows of the session. |
| 0:30.6 | We were up most of the morning. |
| 0:32.6 | Today was Fed Day. |
| 0:33.6 | So this is the conclusion of a two-day Fed meeting where Powell is going to set policy |
| 0:38.9 | and so markets were up a little in the morning and then after policy was announced and then the |
| 0:43.3 | press conference sold off a little bit, but fairly benign. The Dow was down 136 points. S&P was |
| 0:49.6 | down 0.5 percent and so was the NASDAQ. So modest little sell-off. Interest rates were dead flat on the day. |
| 0:56.1 | The yield curve did flatten a little bit with the two year up a little bit more than the |
| 1:00.4 | longer term rates, but a pretty benign reaction to markets, which means a lot of this is priced in. |
| 1:06.3 | And here's what they said. So holding rates the same was 100% basically expected in Fed future. So that part |
| 1:13.5 | wasn't new. There's still a Fed funds rate unchanged at four and a quarter to four and a half. |
| 1:18.3 | They did shift gears a little bit on employment being the bigger risk versus inflation to the |
| 1:23.3 | economy. They moved back the other way. So this is a little bit more hawkish-leaning sentiment. |
| 1:28.9 | They said employment is fine. Inflation is still elevated. And so we're going to take our time |
| 1:33.4 | with interest rates. I think all that is fine, too. My comment today was that we need to remember |
| 1:40.9 | there's a positive correlation between interest rates and growth. That isn't always |
| 1:46.0 | perfectly so. I believe it's fairly balanced at this particular time, which is what I like to see. |
| 1:51.6 | In other words, higher interest rates is citing a higher growth in the economy as well. And if you have |
| 1:58.3 | rates policy that starts to move lower, it's because growth is starting |
... |
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