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This insightful monthly market commentary will help you look beyond the headlines to better understand what is driving the current market trends that could impact your credit union’s investment portfolio.

As widely expected, the Fed decided to lower the target fed funds range by 25 basis points (bps) to 1.50-1.75% on October 30, including a 25-bps reduction in the interest on excess reserves (IOER) rate. However, the official statement and Fed Chair Jerome Powell’s messaging following the meeting suggested a pause in interest rate policy barring a significant change in the data trend (good or bad). While financial markets remain very sensitive to U.S./China trade talks and geopolitical events, interest rates are more likely to trade in a tighter range (less volatile) with the Fed presumably on the sidelines for the time being. Trade headlines have generally been less negative over the last month, and it appears that a “no-deal” Brexit is a lesser probability for the remainder of 2019. The presidential impeachment inquiry could potentially inject some volatility into markets, but it hasn’t been a factor to this point.

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