Friends and Colleagues,

Last year’s concern about rising interest rates has shifted this year to concerns about slowing economic growth. Please read on to see how the Federal Reserve views things and what the economists at Wells Fargo Economics make of the latest input from the Fed.

FOMC Meeting

• Last week the FOMC voted unanimously to keep the range of the federal funds rate unchanged between 2.25% and 2.50%.
• The committee’s cautionary regarding the outlook reaffirmed its wait-and-see approach to monetary policy.
• the FOMC downgraded its assessment of the current state of the economy, saying that “growth of economic activity has slowed from its solid rate in the fourth quarter.”
• The committee downgraded its assessment of the economy, with officials’ median projection for growth this year dropping to 2.1% from 2.5% previously.
• Furthermore, it shaved down its GDP growth forecast for 2019 and 2020
• With this more reserved outlook, the committee scaled back its expectations regarding tightening and now looks to be on hold for the rest of this year.

What Does The Future Hold?

• Given the patient tone of the FOMC , WFS suggests it remains a close call on whether the next move would be a hike or a cut.
• The most recent WFS forecast looks for the Fed to hike rates 25 bps later this year.
• They predict the Fed still has a modest preference to hike rates 25 bps next year.
• On the other hand, the market implied probability of a rate cut in late 2019 has jumped to about 60%.

Economic Growth

• The Leading Economic Index rose 0.2% in February.
• While the index continues to suggest a solid pace of growth, the positive contributions to the index have been getting smaller.
• The spread between the 10-year Treasury and fed funds rate has continued to fall.
• If/when the yield curve inverts, market apprehension of a recession will heighten.
• WFS projects financial markets may be underestimating near-term growth.
• They suggest both upside and downside risks to the outlook persist.
• One of the largest risks remains the outcome of trade negotiations between the United States and China, particularly since the White house said tariffs on Chinese goods may remain in place for a “substantial period of time,” which only increases uncertainty around the impact to economic growth.

As always, our world and our economy continue to evolve, so stay tuned…




We have our daily rituals that give structure to our lives.

Do we pay attention to them or is our mind always elsewhere?

In our cell phone/internet world, how often do we make time to do what we do each day with intention?

Simple acts like eating a meal, working out, or listening to a friend….

Is our mind on our next text message, or do we take the time to honor the moments of our lives?

Inhaling food while we work may make us full, but stopping to appreciate the blessing of having good food to eat and giving thanks for that food can give us a much deeper connection to the source of that food and the work that went into putting it on our plate.

Exercise makes our body better regardless, but exercise with intention can turn a workout for the body into a workout for the soul as well.

Listening to a friend can be done as a multi-tasking event, but real, true listening requires our full attention….something we seldom can give.

As we move through the week ahead, may we take a moment to take a deep breath and do some of the simple things we do with quiet focus and with intention.

Make it a great week!

David Rosenthal, MAI, FRICS
President & CEO
Curtis-Rosenthal, Inc.
Los Angeles, San Francisco, Newport Beach, and Charlotte NC

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