At the beginning of last year, the stock market looked like it was heading into a recession. However, not only did it avoid a recession, but the market had an overall positive outcome at the end of the year.
Certified Financial Planner Tim Heisterkamp with Journey Financial says 2019 started off by nearing an inverted yield curve, where long-term interest rates are lower than short-term rates. However, Heisterkamp points out the yield curve flattened out and there may have been some help from the Federal Reserve.
“The Federal Reserve will lower interest rates to try to spur lending and the economy forward. So the Federal Reserve did lower interest rates throughout the year, and that probably also helped get rid of the inverted yield curve and also made lending rates a little more attractive. Whenever they are afraid of a recession, the Federal Reserve will lower interest rates to try to get more money flowing in the economy.”
Heisterkamp notes, the S&P 500 had a 29-percent growth and the United States added 2.1 million jobs last year. He says along with a lower unemployment rate of 3.5-percent, 2019 proved to be a positive year for the economy.