The Federal Open Market Committee (FOMC) Committee’s projections indicate that it expects to begin raising the federal funds rate in 2022, returning to “normal” rates in excess of 1% as early as 2023. The FOMC did not change the target of the federal funds rate – the rate that banks use for overnight loans – and did not begin to “taper” their purchases of US Treasuries and agency mortgage back securities. Unofficially, however, the Committee suggested that it might start to taper those purchase in one of the two remaining FOMC meetings this year.
What does this mean for you, your business, and your wealth? Between the historically low interest rates we’ve experienced during the Covid-19 pandemic and the combination of Congressional spending, Chinese lending shocks, and expected Biden administration movement on income and estate taxes, 2022 is shaping up to be an interesting year. We are meeting with clients daily to position their businesses, their operations, and their wealth to weather these future storms while taking advantage of opportunities available today.