Carol Schmidlin, President of FedSavvy Educational Solutions exclusive interview with Mike Sorrentino, CFA, Chief Strategist at Global Financial Private Capital in Sarasota, Florida.
THE GOOD OL’ DAYS
Carol: Conservative investors have realized next to no return on bank CDs, money market funds, and other cash investments since the financial crisis in 2008. This war on seniors and savers has forced investors to choose to earn nothing in cash or use risky investments to generate an attractive return.
Mike: Expectations around when the Fed will raise interest rates has become the talk of both Wall Street and Main Street, as investors yearn for the days when a bank CD paid 5% in yield. I receive countless inquiries from investors asking this very question and during our conversation will run through a quick but thorough analysis to determine when we could see the first rate hike by the Fed.
Carol: Can you share your thoughts with our readers on when rates will rise?
Mike: In order to answer the question of when rates will rise, it’s first important to understand why the Fed would even want to raise rates.
If our economy is growing very fast, overall demand for products rises as consumers and businesses spend rapidly, which will often cause inflation to surge. Too much inflation can be devastating, so the Fed tries to manage the level of inflation in our economy at all times.