Interest Rates Up. Oil Prices Up. Inflation Up. Valuations Up. Tensions Up.
And somehow…stocks still up.
For a President who wants lower interest rates and lower inflation, perhaps the second-order effects of conflict in Iran and rising oil prices were underestimated. Or perhaps they were accepted as part of a broader objective. Regardless, we are where we are.
Interest rates are moving up again. See 10 Year Treasury yield up to 4.597%.
And markets are once again grappling with the possibility that inflation may not fade as easily as expected. Pandora’s Box is often easier to open than close.
This week my daughter Kai got her driver’s license. In some ways, it feels like one of the tougher environments for new drivers in a long time. Higher gas prices. More congestion. More distraction. More risk.
Ironically, now that Kai drives herself, my own driving has dropped considerably. I am no longer the full-time dad taxi. While I already miss some of those rides, there are benefits too. Fewer trips. Less gas consumption. Less exposure to rising fuel costs.
That is how many Americans respond as well. When fuel prices rise, behavior changes. People consolidate trips. Spending shifts. Some discretionary activity slows. But oil prices do not just impact the gas pump. Energy flows through nearly every layer of the economy. Transportation. Manufacturing. Food. Travel. Goods. Services.
It becomes an input cost almost everywhere.
That leaves the Federal Reserve in a difficult position.
Do policymakers continue framing inflation pressures as temporary? Do they hold rates steady waiting for weakness that may or may not arrive? Or do they risk tightening further into an economy already adjusting to higher costs?
I would not want that job.
Our job at Members’ Wealth is different. We are not trying to predict every macro headline correctly. We are trying to protect client capital while still participating thoughtfully in long-term growth opportunities.
But markets can also resemble fire.
As oxygen rushes in, the flames intensify. New investor dollars, optimism, and easier financial conditions can all fuel the blaze. But eventually conditions change. Liquidity tightens. Rates rise. Enthusiasm fades.
And fires cool quickly once conditions shift.
At the same time, rising rates pressure bond prices while elevated equity valuations can leave less room for disappointment. That combination can create a more complicated investment landscape than many investors have experienced over the past decade.
As Josh Brown said this week:
“Unsustainable things rarely sustain.”
At Members’ Wealth, we continue to believe that surviving the short term is what allows investors to benefit from the long term.
Which brings me back to Kai driving.
As parents, we tell her:
Go forth. But go carefully.
There is no rush.
The beach will still be there when you arrive.
That may not be the worst framework for investors right now either.
As your CIO, and as a father, I still want people to grow, explore, and participate in life and markets. But I also want them to arrive safely.
Sometimes the goal is not simply getting there fast.
It is arriving with your capital and your long-term plan intact.
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Dane Czaplicki is CEO of Members’ Wealth, a boutique wealth management firm that offers a comprehensive approach to serving individuals, families, business owners, and institutions. The firm’s goal is to preserve and grow its clients’ wealth to endure over time, while thoughtfully evolving its strategy to suit an ever-changing world. With over 20 years of wealth management experience, Dane and the Members' Wealth team thrive on bringing clarity and confidence to clients' unique situations. He believes everyone needs sound financial advice from someone whose interests are aligned with theirs, and is determined to put service before all else.
Dane received his MBA from The Wharton School of Business at the University of Pennsylvania and his bachelor’s degree from Bloomsburg University. Outside work, he enjoys spending time with his wife and kids, hiking and camping, reading, running, and playing with his dog. To learn more about Dane, connect with him on LinkedIn.
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