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After months of build up and speculation the Federal Reserve is expected to announce tapering of its 85 billion dollar a month.
Of purchases but what happens if they don't tape for joining us to discuss this Anthony Chan chief economist and managing director -- private.
Clients and that they have got to imagine I read one article that said you know Titanic if they don't start tapering because the markets would be in freak mode that's essentially what they were saying.
Well I think you're right I think the market is really poised to expect that they're gonna start the engines the question is how aggressive they're going to be.
And my suspicion is because the economy is not gangbusters at the moment that what they'll do is essentially -- the taper.
But how to modulate the -- guidance is suggests that there are no Harry.
To really get started with this tapering -- program over the near term so.
Again just don't make that initial announcement I think that's what we should expect.
So and then from the standpoint of asking this question as what happens to my 401K between 2 PM in 230 this afternoon as they start revealing.
Their predictions for this economy going forward because it's more than just -- that's going to impact.
How markets react as Peter just to talk about when -- could be hints a raise.
In the interest rates -- they charge banks going forward in another year what's gonna happen to our retirement account.
Well believe it or not there are many reasons for the Federal Reserve to start raising interest rates in the past -- when the Fed has raised rates.
Because they're trying to slow down inflation.
And that's another way of saying slow down the economy so inflation doesn't become a problem.
Today with the Federal Reserve is doing is she reacting.
So what economic conditions are not to inflation and -- -- they start to announce that they're going to be raising interest rates.
Over the next couple years it's not because they're trying to slow the economy is that they are reacting to the fact that they perceive the economy getting better so believe it or not that's not bad notes.
But do you expect them to give us ahead of pending rate hikes in the next year or two because I think something -- -- -- not getting better when we look at wages being stagnant for some.
People in the country and then you look at inflation which is below they they have target of about 2% it's below that.
Well right now the economy is not getting buses I say that initially.
But over the next couple years and look for the economy to continue to make incremental improvements.
We know the labor market is improving I know that labor -- wages are not accelerating we're very rapidly but let's face -- the unemployment rate is coming down.
You can have a debate about whether or not some of that is due to the labor force participation rate the Fed -- itself has had debates and is on a lot of research on this.
But the -- but the mere fact is that we are seeing the labor market improvement and we lost -- almost nine million jobs during the financial crisis.
We've created more than six million jobs bills -- the hard facts.
And then when you talk about these hard facts it's one of the reasons you believe now may be a good time despite some up and down in the market over the next here now may be a good time to actually get into the market.
I think this is not a fairly good time to get into the market to the we're not going to see the thirteen point 4%.
Type of our annual gains in the S&P 500 or even the nineteen plus.
Rates of return that we're seeing in the S&P 500 on a year to databases forever.
But we certainly see.
That right now organic growth in the market when I say the market I -- the S&P 500 it's reasonable I think to expect over every twelve months eight to 10%.
And I think that would Europe improving going from a -- a minus 1% economic growth to a plus 1% we're gonna see some positive contributions from European equity markets -- believe it or not.
That's gonna spill over into emerging markets so with a globally diversified portfolio.
I think this is a good time to get back into the market.
Chase private client director managing director Anthony -- thank you very much.
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