Daily Scoop 22-3-16

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Today's Scoop:Reassured

Big Picture

1. Consumer spending slowed in February.

2. Interest rates are rising.

3. Policymakers are officially ending the emergency economic stimulus.

The Market: 

⬆️

+2.2%

S&P 500: 4,357.86

1Mo:

-1%

| 1Yr:

+10%

| 5Yr:

+83%

Markets continued the positive trend today on

optimism around peace talks in Ukraine

and policy updates from the Federal Reserve.

The Fed is

officially shifting the US economy out of emergency stimulus mode

, moving slowly back to normal conditions. It believes the

US jobs market and economic activity have recovered

. The Fed has stopped pumping extra money into the system and

started raising interest rates

. It increased the floor for interest rates from zero to 0.25% and plans to keep raising by 0.25% six more times this year. This will make loans and debt more expensive.

The Commerce Department reported retail sales slowed more than expected in February, after surging in January.

Higher prices are starting to eat into consumer demand.

Company Scoops ❤🌎💰

(Click to dig in & vote your reaction, see how others feel)

McDonald's

lost control of Russian restaurants

-

Shell's

board sued over climate inaction

-

Microsoft

emissions surge, despite best intentions

-

Walmart

sued for Down syndrome discrimination

-

Starbucks

adds EV chargers to restaurants

(These links only work for 24 hours while the story is live)

🤓 Inside Scoop...

The Federal Reserve, aka the Central Bank, controls our money system. The Fed is charged with keeping the economy healthy, indicated by low unemployment and low inflation. When the economy needs juice, it creates more money and lowers interest rates to incentivize more lending and spending. When inflation gets too high, that means there's too much lending and spending for the given available resources. The Fed then raises interest rates and starts to shut down all the supportive stimulus measures. It's a natural part of the economic cycle. Still, there's a risk that inflation spikes because of some kind of disruption (like sanctions against Russia) and not because of the economy recovering. Then, investors worry that the Fed is restricting the economy before it actually recovers.

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