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Let's Not Lose Sight of the Big Picture

May 09, 2023

Let’s Not Lose Sight of the Big Picture

These days we are barraged daily with information, and it seems to be easier than ever to lose track of the big picture.

Where are we economically?

Benchmark target of Federal Reserve is now five full percent above where we were just one year ago. This is the second largest rate increase in history. 

We expect the Fed to be done shortly and expect them to pause for the rest of the year.

Inflation is three full percentage points less than one year ago.

We expect this trend to continue but further progress will be slower

Corporate earnings for the first quarter came in stronger than expected.

We expect earnings for the full year 2023 to be slightly better than last year. The S&P 500 earnings for last year were 35% greater than pre-pandemic 2019 (which was an all-time record year).

Job growth remains robust.

We expect this trend will slow in the face of higher rates and banks tightening credit.

Small business confidence - A recent survey from Bank of America (2023 Small Business Owner Report) finds that small business owners are bullish about their prospects in 2023, despite continued external pressures like inflation and supply chain constraints. Two-thirds of business owners anticipate increased revenue over the next 12 months, and nearly half of them plan to expand their business this year.  Economist magazine

What are we watching closely?

Debt ceiling – Typical political shenanigans continue. We have seen this over and over.

Banking crisis – We are looking for a fix to FDIC limits. We are also watching the issue around commercial real estate loans held by banks.

We are here to help answer any of your financial questions, please call us!