“KTRH Money Man” Pat Shinn with Heritage Asset Advisors Joins Houston's Morning News

Episode Transcript

Speaker 1 (00:00):
Pat Chin joins us our KTRH money man, what do
you make on top of it? Hey, Jimmy, Hey, what
do you make of what the Drome and Paul had
to say about inflation?

Speaker 2 (00:08):
Oil Boy, there's a lot to unpack here, Jimmy. So,
first off, for my intro music, I was hoping for
Stevie ray Vaughn walking the tight rope. That's what the
Federal Reserve is doing right now. So remember every other
central bank around the world, they're only concerned with inflation.
The Federal Reserve, they've got a dual mandate. Not only

(00:29):
are they looking for low inflation, they also want full employment,
and that is exactly why they're cutting interest rates. They
have decided they've moved the goalposts, Jimmy, if you will,
because remember their target rate is two percent inflation year
over year. We just got the latest numbers. The Federal
Reserve's favorite measure of inflation last week came in at

(00:51):
two point eight percent. So it's still well above their
target rate. Yes, it's way way down from where it was,
but they are ignoring that and they're focused on jobs. Now,
this about fell out of my chair. During Powell's press conference,
he says the government data is overstating jobs by sixty

(01:13):
thousand jobs a month right now. Well, if you look
at the data since April, we've only been adding forty
thousand jobs a month. So if Powell's right and these
jobs numbers are no good, we're looking at, you know,
minus jobs numbers. I think President Trump is probably headed
in the right direction in terms of the FED probably
needs to be lowering rates even more if their job

(01:35):
is just if they're trying to target full employment.

Speaker 1 (01:38):
So we've noticed that there are some companies that are
beginning layoffs here in some of these national companies by
the thousands, yeap. Do they consider that as well as
that part of the job's number they work with.

Speaker 2 (01:49):
Absolutely, So we do get a number called JOLTS that's
job openings and labor turnover survey. It was interesting what
last week showed. Showed that the big, big, big companies
were adding jobs. The smaller companies know. And so if
we look at just the total picture, we're seeing not
a lot of hires, but not a ton of fires,

(02:10):
so not a lot of layoffs. And so we're looking
at unemployment right now around four point four percent. Way
back when Alan Greenspan he told Congress that what he
considered full employment was five percent, So even four point
four is not that bad. So remember, I want to
add a couple of things, Jimmy. Remember when we talk

(02:30):
about interest rates, there's no single rate. There's an entire
spectrum that runs anywhere from overnight all the way out
to thirty years. That's called a yield curve. What we're
talking about the Fed doing is simply the overnight rate.
This has nothing to do with mortgages, credit cards, car loans,
et cetera. I could see the possibility. I don't know

(02:50):
if it'll happen or not, where longer term interest rates
go up and short rates go down. Certainly, you and
I talked, Gosh, two years ago. I told people, you know,
short short rates are really high. Now's a good time
to move your money out of the bank into one
of these government money market funds SCHWAP, Government Money Fund,
Federal Fidelity, Vanguard. The yields on those, Jimmy, are all

(03:14):
coming down.

Speaker 1 (03:15):
Now.

Speaker 2 (03:15):
Back when you and I talked about this, the yields
five percent. Right now it's three point eight. It's going
to continue to be lower. But if you want to
beat your bank, that's still a good spot. And if
you've got the money in one of those government money
funds and you don't need it, take a look at
a treasury bill. I think rates are going to be
coming down. Powell doesn't have much credibility, hardly any I

(03:40):
think the mark he told everybody yesterday we're only going
to cut rates one time in twenty twenty six. The
market is not buying it. They're still pricing in three
rate cuts.

Speaker 1 (03:52):
Okay, well we'll see what happens with all this. But
it is always thank you, sir for all the great
information you got it. That's our countrh money man patchin