Interest Rates Inflation

Interest Rates

2

& Inflation 022 has been off to a volatile start. The Financial Sector has seen its 8th correction of 10% of the markets in 20 years. As anxietyprovoking as corrections can be, they are a necessary part of the process, especially if we want to see a return on our investments. What supersedes concern about market corrections is a market recession. Interest rates are historically low, and inflation is high. Combining low-interest rates, disruptions in supply chains, Covid-19 shutdowns, and large amounts of stimulus cash, it’s important for the Fed to raise rates as they cannot stay at zero forever. Raising interest rates is how the

Federal Reserve cools inflation. Cooling inflation will provide fixed income opportunities, especially for clients on a fixed income. It’s hard to not run out of money when inflation is at 7% and fixed rates are below 3%. As interest rates rise, consumers save because the returns from savings are higher. Consumers also tend to spend less when the cost of goods and services is more. In our current economic climate, fixed income opportunities, like bonds, don't provide the risk-adjusted return many retirees want. Just look at your savings account. Any interest earned on a corporate or municipal bond, for example, gets

by Steve Schott, Financial Advisor, Schott Financial Management eaten away by inflation. Increasing interest rates will provide additional investment options and make fixed-income products more desirable. It will also produce some market volatility. From my point of view, it would be nice to reduce the size of the Federal Reserve balance sheet by halting the purchase of American treasury bonds. As we head into spring it will be interesting to see what happens to inflation and interest rates. How often and when rates rise will be interesting. In my opinion, raising one to reduce another will be a good thing for the markets and general wellbeing of our economy and clients.

Experience Healing Waters OF THE

ORIGINAL SPAS

Karlovy Vary, Czech Republic

The word “spa” has expanded over the millennia from the name of a Belgian town by a mineral spring believed to have healing properties to mean any such community in Europe. In the 17th-19th centuries these European spa towns were centers of health and urban innovation, and 11 of them were jointly named as a UNESCO Heritage Site last year. All of them continue as centers of healing and relaxation, so consider adding a couple to your next continental itinerary: BADEN BEI WIEN, AUSTRIA Built around springs which appeared after a 1755 earthquake, this town’s “yellow gold” is the golden hue seen in its curative waters used for traditional treatments; it’s also become a modern center for the spine and musculoskeletal system. SPA, BELGIUM The town whose name was adopted by the entire water-cure movement is known for its extensive network of walking trails and being home to one of the world’s first casinos. Indulgent treatments include subaquatic massage. KARLOVY VARY, CZECH REPUBLIC The village was founded in the 15th century after royalty discovered the first of 79 hot- and cold-water springs in the area; today accommodations are just as majestic and available treatments even more varied. FRANTIŠKOVY LÁZNĚ, CZECH REPUBLIC Developed beginning in the 18th century, this city’s spa zone with historic resorts still frequented today is surrounded by open space on both sides, including its famous network of “heart trails.”

MARIÁNSKÉ LÁZNĚ, CZECH REPUBLIC There are 40 springs within the town itself, sheltered by colonnades and pavilions developed over the centuries. Visitors can build a pleasant vacation around relaxation, walks and sports. The three Czech towns are conveniently clustered on the nation’s western edge.

VICHY, FRANCE Popularized by Napoleon, today this burg has a museum’s worth of architectural styles and you can still get the iconic Vichy shower, a massage therapy using 5 to 7 showerheads.

BAD EMS, GERMANY Known for the Baroque style of its imperial bath, modern medicine has its place here alongside traditional European and Asian therapies. The continent’s first floating river sauna, the Emser Therme, is here.

BADEN-BADEN, GERMANY This destination nestled in the hills of the Black Forest has two separate clusters of springs with differing emphases; Friedrichsbad’s enriching 17-step ritual and the Caracalla spa with luxe architecture and services.

BAD KISSINGEN, GERMANY These springs were first discovered in the ninth century. Today tourists can enjoy the ultramodern conveniences of the KissSolis thermal baths and 20 state of the art spa and rehabilitation clinics.

MONTECATINI TEME, ITALY Known for its exquisite gardens, statues and thermal treatments beginning with the 15th century, come here for thermal mud baths along with the rest of a full range of water therapies.

BATH, GREAT BRITAIN The UK’s only naturally warm springs began attracting the Celts and Romans some 2,000 years ago and still draw crowds with, among other options, the Great Bath’s large thermal pool in use since those times.