Headline CPI remained at 3.4% year-over-year in August, while core CPI declined slightly to 2.4%. Headline and core PCE inflation also eased to 3.4% and 3.0%, respectively.
The Federal Reserve (“Fed”) unanimously increased rates by 0.25% on September 16, its first hike in approximately three years. At The Family Office, we anticipate one additional increase this year, though likely not in October.
First- and second-quarter GDP growth figures were revised upward to 2.5% and 2.2%, respectively, while the Atlanta Fed estimated third-quarter growth at 3.7%.
Both two-year and 10-year Treasury yields rose by 0.54% in September. The S&P 500 index declined by 0.6%, the Nasdaq index gained 1.9%, and the Russell 2000 index fell by 5.4%.
With elevated equity valuations, strong AI-related capital expenditure, and uncertainty surrounding Fed policy, elections, and geopolitics, it is important to maintain liquidity and balance liquid equities with carefully selected alternative investments, including private equity, private credit and real estate.
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