America's central bank, the Federal Reserve (FED), yesterday chose to leave the policy rate unchanged in the range of 5.25-5.5%, in line with expectations. Federal Reserve Chairman Jerome Powell has previously said he wants to see clear evidence that inflation is approaching the 2% inflation target before any rate cuts can be considered.
The personal consumption expenditures (PCE) result was higher in June at 2.5%, compared to what analysts had expected, although it was down from May, which was 2.6%. PCE is a measure of spending on goods and services by people in the United States, and is the measure that the FED attaches importance to when deciding whether to raise or lower the policy rate.
We have a mix of stocks that benefit from either a lower or a higher policy rate, so overall our portfolio is not significantly affected by this announcement. The strengthening of the Swedish krona over the past 2 days has done significantly more damage to the value of our portfolio.
Of our four worst paying months of the year, August comes in 2nd place, with only November performing better. The absolute worst month of the year is February. It will be exciting to see how much better February 2025 will be compared to 2024.
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