At the November 2023 FOMC meeting, the Fed brought rate increases to a full stop. In the first days of this new year following the most recent jobs data, Janet Yellen declared that “we have a good strong labor market…, “inflation has come way down”… and “the economy has transitioned to stable and steady growth…” i.e. the Fed has achieved, from all apparent signs, a ‘soft landing.’ Now the expectation among investors and pundits alike is that the Fed will implement several quarter-point rate decreases throughout 2024, though the number of those expected cuts is a matter of intense speculation.

While Yellen noted that the economy seems to have avoided a recession, the Fed continues to keep options open. Signs are still a bit murky. The 5%-5.25% rate, which amped many home mortgage rates to 7+%, (though they have eased somewhat over the past two months), means the housing market remains tight. Oil is down currently, a decrease that is visible at the gas pump, though the global outlook is potentially fraught, and it is an election year. All are potential influences on the market.

With all that and more in mind, the Board continues to keep a close eye on the economic outlook, particularly the income portion of the Fund, in order to take the best, most prudent advantage of any changes.