The Federal Reserve Bank’s Federal Open Market Committee (FOMC) unanimously reaffirmed it would not raise lending rates until the jobs recovery is complete, according to minutes just released of their March 16- 17 meeting. The jobs recovery is not expected to occur for 15 months. Meanwhile, the service and manufacturing sectors both soared and broke records last month, according to yesterday’s data release from the Institute of Supply Management. 
Manufacturing activity, according to the monthly survey of purchasing managers conducted in March by the Institute of Supply Management, soared to a record high. This survey has been conducted for decades by ISM, a membership and accreditation body of supply management professionals at the nation’s largest corporations. 
Likewise, the index of business at service companies in March also soared, rocketing from 55.3 to 63.7. While manufacturing accounts for 11% of total U.S. economic activity, this index of activity in the service sector of the economy accounts for 89% of U.S. gross domestic product. 
Amid new signs almost every week and repeated record-breaking high prices in the stock market, the FOMC minutes for its March 16-17, 2021 meeting, were particularly important. The FOMC unanimously reaffirmed it would not raise lending rates until a full recovery in the job market. The jobs situation, according to consensus forecasts of leading economists, is not expected to recover fully until June 2022. Despite evidence a boom is under way, the Fed is not even close to taking action to slow the economy. 
The Standard & Poor’s 500 stock index closed Friday at an all time high of 4,128.80. The index gained +0.77% from Thursday and +2.67% from last week. The index is up +59.42% from the March 23rd bear market low. Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice. |