Keel Point Insights

Check out our guides, tools and research for expert help on all your
life planning, wealth planning, and familiy management questions!

& Videos

Awards &
Press Releases


Keel Point
in the News

Market Recap – October 31, 2022

Robin Freese
October 31, 2022
Market Recap

Until the disinflationary data show up in official figures, the Fed will continue hiking interest rates with another 75 bp increase in November, bringing the Fed funds target to 3.75% to 4.00%.

  • The inflation data are not good enough to warrant easing interest rate hikes just yet, but also not bad enough to support a full 1% rate hike at November 1-2 FOMC meetings. September FOMC meeting minutes reported that its members see the greater danger in taking too little action to bring down inflation compared to the cost of being too aggressive.
  • While Chair Powell will be careful not to suggest a Fed “pivot”, he may indicate that smaller rates hikes lie ahead: 50bp in December and 25 bp in January, as signs of abating inflation become more evident. This would be consistent with other FOMC members indicating a need to assess the impact of Fed policy actions to date and new signs of declining inflation.
  • September’s CPI inflation reported two weeks ago showed another new high in core inflation at 6.6% over the past 12 months, but it also showed quarterly inflation annualized at only 2% in Q3.
  • No doubt the Fed’s raising the Fed Funds Rate and Quantitative Tightening are working: the average 30-year fixed mortgage rate reached 7.32% last Saturday, new housing starts are declining, and existing home sales have fallen over the past seven months. In addition, prices are down in rents, commodities, retail prices and other places, except services.

The question of whether inflation or interest rates peak first and then recede drives the debate on whether the economy is headed for a “hard” or “soft” landing.

  • The 2.6% annualized first estimate of Q3 GDP growth is helpful, but it was due principally to improving net external trade. Final sales to private domestic purchasers increased by only 0.1% annualized.
  • The Q-3 GDP estimate triggered the 10-year Treasury yield to ease back and then close at 4.02% on October 28. The 3-month T-Bill rate closed Friday at 3.95%.

Disclosure: Securities offered through Keel Point Capital, LLC, Member FINRA and SPIC. Brokerage and Investment advisory Services are offered under the Keel Point brand. Investment Advisory services offered by Keel Point, LLC an affiliate of Keel Point Capital, LLC. While reasonable efforts have been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Keel Point does not give tax, accounting, regulatory, or legal advice to its clients.

Related News & Articles

Market Recap – November 21, 2022

This past week highlighted the ongoing struggle between the positive forces of lower inflation and Fed officials trying to prevent an outbreak of “irrational exuberance” in financial markets. October CPI and PPI (Producer Price Index) inflation are lower on a monthly,...

read more

Market Recap – November 14, 2022

The most important news last week was the better-than-expected October CPI inflation report which spurred financial markets to rally on the belief that the Fed can ease back on the pace and ultimate level of interest rate increases. With the Fed already having...

read more

Market Recap – November 7, 2022

The Fed raised its Fed Funds rate another 75 bp this past week and said that while it will continue raising rates most likely at a slower pace the upper limit reported in its “dot plot” at its September meeting may be too low. Financial markets reacted negatively....

read more