Dividend Portfolio Update for October 2023

Can’t get this off my head. Government spending is contributing to the persistent inflation and the Federal Reserve faces a daunting balancing act moving forward. I hold the belief that elevated interest rates will eventually act as a restraint on excessive government spending but the amount of interest on the debt our government can eventually rack up in a few years is worrisome.

Billionaire Barry Sternlicht recently quoted, “The Federal government now has to pay 5% on $33 trillion dollars of debt… People who talk about Paul Volcker, and say that [Jerome Powell] is the disciple of Volcker, that 22% interest rates slowed inflation- Volcker didn’t have a $33 trillion deficit. He had a $200 billion deficit. It didn’t matter what rates were.”

He states rates must come down because it’s simply too unaffordable to sustain. I have to agree with him. It’s either rates comes down or they are capped near where we are today. The FED’s hands are tied if they wish to successfully orchestrate a soft landing. The higher for longer narrative seems most warranted.

Personally, it’s hard to see rates coming down quickly from here without another black swan. My outlook remains the same and I suspect we will tread sideways for a while as we enter a stock pickers market.

Anyhow, lets get this update on the books!