Monday, March 25, 2019

TELFPlus Investment commentary Miles Capital, Investment Advisor
March 1, 2019

A The Fed’s Powell’s Patient Pause Pivot

The Federal Reserve (Fed) raised rates four times during 2018, including once during the last quarter of 2018. After this barrage of activity, the Fed has recently indicated they will take a more patient tone toward raising rates as we move through 2019. In explaining this change, Fed Chairman Powell commented that the healthy U.S. economy has faced some “crosscurrents and conflicting signals”, and he highlighted how “financial markets became more volatile” at the end of last year.

Even with these “conflicting signals” economic growth remains strong. Earnings grew 13% during the fourth quarter of 2018 and sales at 6%. This was the fifth consecutive quarter of double digit earnings growth. Employment has remained high and ISM surveys are still strong. And consumers, which represent approximately 70% of the U.S. economy, are still doing well.

Based on our view of continued economic growth, we believe the Fed will raise rates one more time in 2019, likely in the second half of the year.

ERegardless of changes, we remain steadfast in our disciplined investment approach and focus on the long-term to help provide value for our clients.

The views expressed herein are the current views of Miles Capital as the stated date and are provided for informational purposes only. They are believed to be correct, but accuracy and completeness cannot be guaranteed and should not be relied upon for legal or investment decision purposes. All expressions of opinion and predictions presented are subject to change wihtout notice. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any securit. Past performance is not a guarantee of future results.

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