The Norstar Group’s CEO, Jason Nordlund, has provided expert insight into the role that the Federal Reserve (FED) should play in analyzing interest rates in 2023.
The Norstar Group, a prominent investment company, connects entrepreneurs and investment professionals with opportunities through networking events, education, deal flow, and consulting services. The Norstar Group’s CEO, Jason Nordlund, has provided expert insight into the role that the Federal Reserve (FED) should play in analyzing interest rates in 2023.
As an investment specialist with extensive experience, Jason Nordlund has made it his mission to teach people how to assess risk and reward and make better investment decisions. He has helped countless professionals navigate the world of finance. In a recent interview with Jason Nordlund, he provides insights and suggestions for any investor navigating the market in 2023.
Q: What is your outlook on the Federal Reserve’s monetary policy in light of recent bank failures?
Jason Nordlund: Recent bank failures are the FED’s cue to pivot. Rate increases will soon be a thing of the past, and it won’t be long until rates start lowering again. Maybe not immediately, but we doubt we’ll see much more hawkishness from the FED.
In the era of modern banking, unprecedented monetary expansion is accepted but also required if our current system is to survive. Rates are like gravity; they will end at zero before they go negative. With little doubt, rates have been on track to head lower this entire time.
Q: Why Has The FED Raised Rates Significantly as of Late?
Jason Nordlund: Because nothing in the markets can go straight up or down, they’ve been raised to be lowered again. And they’ll go lower on this next leg down.
Q: Is Lowering Rates A Good Thing?
Jason Nordlund: Yes and no. It’s good for the stock market. The bull market can now resume, which is the most crucial barometer most use, assuming they have a traditional 401K and retirement account.
Q: Why Is Lowering Rates a Bad Thing?
Jason Nordlund: Lowering rates can be harmful in the long term because incomes will continue to get squeezed relative to the cost of living. Unfortunately, there’s no way around this. Wages can’t compete with the rising cost of goods and services. This is why most households require two incomes to support themselves. Yes, this may be the result of inflation. Many consider it inflation itself. However, inflation is an increase in the supply of money. And the impact of this increase in the money supply is price increases across the board. This is why inflation is such a problem and why lowering rates will make citizens poorer in the long haul. It’s often considered a hidden tax.
Q: Should The FED Continue To Keep Raising Rates?
Jason Nordlund: No. Raising rates would only lead to a quicker demise as more bank failures would continue before the government defaults on its debt. But lowering rates is choosing a slow death over a quicker death as the markets continue to climb in value.
So, overall it seems it isn’t time to run for the hills just yet. Jason Nordlund emphasizes that the Federal Reserve’s recent bank failures indicate a need for a pivot in monetary policy and suggests that rates will likely begin to lower again soon. While this may be good for the stock market, Nordlund warns that lowering rates will negatively affect citizens’ purchasing power due to inflation, making it essential for investors to consider assets that can preserve their purchasing power in the future.
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