Perplexing Headlines | Wisdom, Wealth, and Wellness

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®, CDFA®, DACFP

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management. On today’s episode of “Seeking Wisdom, Wealth, and Wellness,” I want to sort of describe what perplexes people.

Unemployment news comes out, and it’s better than expected. More people are employed. Shouldn’t that be good news?

Why is good news bad news and why is bad news good news? Part of it has to do with people pricing and the expectations of how the Federal Reserve is going to react to that news. So because employment is so good and so tight, the unemployment rate is so low, that means that the Federal Reserve has room to tighten conditions, pull back, accelerate quantitative tightening, tightening up money supply, because everybody’s in good shape right now. They’re calibrating the liquidity in the market to try to bring down inflation. And that extra liquidity, if they tighten and unemployment starts ticking up, they don’t want unemployment skyrocket, but they want to calibrate it where it’s at a level where we can tame inflation and keep it at a rate that’s sustainable and in a healthy range for their comfort zone over a long period of time so the economy can grow at a more consistent pace over time, rather than boom, bust, boom, bust. It’s just like threading a needle. You hope they tighten smartly and the markets react negatively because now they’re expecting interest rates to be tightened, money supply to be tightened, and therefore they’re repricing down securities as a forward expectation six to nine months from now. And then when the opposite happens, you’ll see things reverse course.

So that’s a little explainer as to why is good news bad news for markets at times. Just look beyond the headlines.

Have a great day.

Get the Latest Wealth Insights, Delivered.

Video Recorded September 2, 2022
SHARE
Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

Further Reading

In Pursuit of Being Healthy, Wealthy, and Wise

With each new year comes new resolutions and goals. If your January plans did not pan out as you hoped, don’t fret! February brings a fresh start and another chance...

Leverage | Wisdom, Wealth, And Wellness

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management. And on today’s episode of “Seeking Wisdom,...

Understanding | Wisdom, Wealth, And Wellness

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management. And on today’s episode of “Seeking Wisdom,...

Talk to an Advisor today

232 Madison Avenue, Suite 400 New York, NY 10016
(212) 584-1900

© 2022 SATOVSKY ASSET MANAGEMENT | PRIVACY POLICY | FORM CRSTERMS OF USE/DISCLAIMERS

NOT FDIC INSURED. NOT BANK GUARANTEED | MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL | NOT INSURED BY ANY STATE OR FEDERAL AGENCY

Website Developed by Finovo

Get Wealth insights Delivered To Your Inbox

Don’t miss a beat – Sign up to have the latest investor insights, mindfulness tips and market news from our blog delivered right to you.