The Fed Not Raising Interest Rates: What It Means for Investors | Affinity Capital

September 20, 2023

The Federal Reserve (Fed) is the central bank of the United States. It is responsible for setting monetary policy, which includes controlling interest rates. Interest rates are the price of money, and they affect the cost of borrowing and lending.

When the Fed raises interest rates, it makes borrowing more expensive and lending more attractive. This can slow down economic growth and help to bring down inflation. When the Fed lowers interest rates, it makes borrowing cheaper and lending less attractive. This can stimulate economic growth and help to boost inflation.

The Fed has been raising interest rates aggressively in 2023 in an effort to combat high inflation. However, at its most recent meeting in September 2023, the Fed decided to leave interest rates unchanged. This decision came as a surprise to many investors, who had been expecting another rate hike.

What does the Fed's decision mean for investors?

  • Borrowing costs will remain low. This is good for businesses and consumers, who can now borrow money more cheaply to invest or make purchases.
  • Investment returns will be lower. This is because interest rates are used to calculate the returns on many investments, such as bonds and CDs.
  • There is a risk of a recession. If the economy does enter a recession, it could lead to lower stock prices and other asset losses.

What are ways that Affinity Capital addresses this situation?

  • Invest in stocks that are likely to benefit from low interest rates. This could include stocks in sectors such as technology, healthcare, and consumer staples.
  • Bonds can provide stability to a portfolio and can also generate income. However, investors should be aware that bond yields are likely to remain low for the time being.
  • Portfolio diversification. We invest in a variety of sectors.

Remember, investing is a long-term game. We don’t make investment decisions based on short-term fluctuations in interest rates or the stock market. Instead, we focus on investing in companies with strong fundamentals and that are well positioned to grow over the long term.

We at Affinity Capital are here for you to discuss investing moving forward in a changing and challenging environment. Call or email to schedule an appointment.

Many of our new clients come from client referrals and we have provided service to these referrals in the form of portfolio advice, retirement planning and most recently assisting elderly parents in investing to meet their care needs.  All referrals receive great care and confidentiality and we appreciate the trust you place in Affinity Capital when you refer your friend, colleagues or family.

 

Signals from the Fed: Inflation, Growth, and What Comes Next

August 22, 2025
It was a Fed-heavy week, with three major developments that matter for markets and the economy. FOMC minutes (July 29–30) — released Wednesday (Aug. 20). The minutes reinforced a data-dependent stance : participants saw continued progress on inflation but noted that risks aren’t one-way, citing pockets of labor-market cooling and the growth impact of tighter financial conditions. Policymakers emphasized flexibility and the need to see inflation moving durably toward 2% before declaring victory. For investors, the takeaway is that the bar for rapid policy shifts remains high, but the Committee is clearly keeping both sides of the mandate in view. Weekly balance sheet (H.4.1) — released Thursday (Aug. 21). The Fed’s weekly statement showed the usual moving pieces: securities holdings, reserve balances, and program usage. While week-to-week changes can be noisy, the release remains a useful pulse on system liquidity and the runoff of the Fed’s portfolio under quantitative tightening . Markets watch aggregate reserves and Treasury General Account flows because they can nudge front-end rates and funding conditions at the margin. Jackson Hole — Chair Powell’s Friday address. At the Kansas City Fed’s annual symposium, Chair Powell underscored that policy decisions will continue to be guided by incoming data . He highlighted the balance between sustaining expansion and finishing the job on inflation , noting tariff-related price pressures and supply-chain considerations among factors being monitored. The message: no preset path, but openness to adjust as evidence accumulates. Historically, Jackson Hole is more about long-term framework and risk management than near-term moves, and that tone held this year. What it means for the days ahead Near-term market drivers will be how inflation and labor data align with the Fed’s “proceed carefully” posture. • If inflation continues to edge lower while growth holds steady, the door stays open to gradual policy easing later this year. • If price pressures re-accelerate—or if hiring slows more sharply than expected—the Fed may extend its wait-and-see approach. Liquidity dynamics from the Fed’s balance sheet runoff will remain a background factor , but the central story is still inflation’s glide path and the durability of demand . Investors should expect choppy trading around key data releases , with markets pricing probabilities rather than certainties. As always, we welcome your questions and are here to support you . At the heart of everything we do is our commitment to “ Wealth Management for Life ”—providing enduring guidance for you and your family’s financial success.

Fed Moves and Market Trends | Affinity Capital

August 6, 2025
Markets entered the week with a boost of optimism, fueled by softer labor data and growing chatter that the Federal Reserve might be leaning toward a rate cut this fall. But that optimism didn’t last long . As the week unfolded, economic uncertainty returned to center stage: fresh concerns about tariffs, underwhelming corporate earnings in some sectors, and signs of consumer fatigue in key parts of the economy tempered the early enthusiasm.

Weekly Market Update: Stability Amid Data and Tariff Jitters | Affinity Capital

July 17, 2025
This week’s stock markets were marked by tight trading ranges, record-setting highs in tech, and a backdrop of macro uncertainty. The S&P 500 (through SPY), Nasdaq (QQQ), and Dow (DIA) eked out modest gains, shrugging off headline volatility tied to Fed independence concerns and escalating tariff threats.