Market update: Understanding this week’s FOMC frenzy

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Market headlines have been focused on this week’s FOMC meeting minutes, which stoked investors’ concerns around inflation and rate hikes. This, in turn, created volatility in the stock and bond markets.

Because MoneyLion Plus members invest in a diversified mix of stocks and bonds consistently across market cycles, they’re in a good position to help weather some of the ups and downs that the market has been experiencing.

Don’t let FOMC give you FOMO

What’s the FOMC, you ask? The Federal Open Market Committee, of course! ? The FOMC meets eight times a year to discuss the markets and economy and to set monetary policy — including interest rates.

Meeting minutes come out three weeks after the actual meeting, and the minutes released this week shared the outcomes of the FOMC’s January session. They indicated that, in the Committee’s opinion, U.S. economic growth looks promising and that the FOMC may gradually hike rates soon given this rising growth and an uptick in inflation.

The minutes spurred Wall Street’s concerns about inflation and rates, and the markets responded with volatility. Stocks jumped and then receded, as bond yields spiked. Fun fact: The prices of bonds and stocks move in opposite directions. So, when stocks go up in value, bonds go down. And vice versa. That’s why diversification, like you have with MoneyLion Plus, is key.

Staying the course

The stock and bond markets will continue to speculate and react to inflation indicators and FOMC activity. This is a normal part of market cycles, and markets historically have always recovered and gained new ground in the long run.

We believe that staying the course is the best approach for MoneyLion Plus members during periods of volatility.

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