The Federal Reserve decided to keep interest rates steady after its two-day meeting, with Chair Jerome Powell citing a lack of progress on inflation. Morgan Stanley Investment Management Managing Director and Senior Portfolio Manager Andrew Slimmon joins Wealth! to give insight into the Fed's decision and how investors should monitor the markets as policy remains unchanged.
Holding rates too long, Slimmon explains, could weaken the economy, but a tell-tale sign of weakening hasn't yet been triggered: "The risk is that the Fed hangs in there too long, and then the economy weakens, and one of the ways, I think, a little trick or a way to watch that is really the two-year yield. Right now, the yield curve is inverted and that means the two-year is higher than the ten-year, but if the economy were to start to show signs of weakening, you would see the two-year yield start to drop and that hasn't happened yet."

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