April 18, 2017
Actually, we have had a few stark reminders recently. The most recent was
the escalation of our engagement in Syria and another, a show of force near
the Korean peninsula. Since the election, much of America’s attention has
been focused upon domestic issues such as the health care bill, a nomination
to the Supreme Court, budgets and more. But now we are reminded that the
world is connected. Connected not only in our fight against terrorism, but
also the economics. From Brexit, to a devastating tsunami on the other side
of the world, we have been constantly reminded as to how events in one part
of the world can affect our part of the world — both good and bad.
Some of these reminders reside on our domestic side as well. Not long after
the first attempt at “re-reforming health care reform,” we now face a late
April showdown which could result in a shutdown of the Federal government.
While we are not predicting that this necessarily will happen, it is a
reminder of the way Washington works — contentiously and slowly. This is
especially true when major changes are proposed.
How does this affect us? We have talked about the surge of confidence that
America has experienced in the past several months. It would be natural for
this confidence to wane somewhat, as the processes move forward slowly.
While this may slow down economic growth a tad, it also gives us the benefit
of slowing down the rise in interest rates that market analysts have been
predicting. Lower rates would help boost the economy and hopefully offset
the cooling off of enthusiasm. While we can’t predict the path of rates or
the economy, it does not hurt to gain some perspective as to the
possibilities, especially when we get hit with news of world and domestic
events.
Source: Origination Pro