This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Customizable Assessment Collaborating in Word T HE E CONOMIC O UTLOOK The U.S. economy continues to charge forward. We anticipate this growth to continue throughout this year, although the rate may slow slightly depending upon the Federal Reserves position on interest rates. In a recent speech before the Economic Council of New York, the Federal Reserve Bank Chairman noted that inflation was once again their primary concern. The Chairman noted that the Federal Reserve Bank will preempt any inflationary pressure with interest rate hikes. As a rule of thumb, stock prices tend to fluctuate with interest rates. Investors are almost always willing to pay higher multiples for stocks when interest rates are low. Thus, an increase in interest rates will tend to have a dampening effect on the stock market. I t is our opinion that an interest rate increase of 50 basis points in the first six months of this year will cause an overall decrease in stock prices of around 10 percent. Even with rising interest rates, our Balanced Portfolio has recorded an prices of around 10 percent....
View Full Document
- Spring '10