Reinhart Week in Review by Madison Investments 5.10.2024


There was a fair amount of chatter from Federal Open Market Committee (FOMC) members this week with each one providing their perspective on the restrictiveness of current policy and the progress of the fight against inflation overall. Starting off the week, Richmond Fed President Tom Barkin conveyed confidence the current level of interest rates will restrict growth and slow inflation but noted the “full impact of higher rates is yet to come.” New York Fed President John Williams also thinks the current level of policy is appropriate and added that rate cuts will come “eventually.” Boston Fed President Susan Collins thinks rates will have to stay higher longer since economic activity and inflation are above expectations this year. Like the others, San Francisco Fed President Mary Daly thinks the current policy is restrictive but that it will “take more time to just bring inflation down.”

Our Take: Although there are some nuanced differences, two consistent themes have emerged from FOMC members, both doves and hawks alike. First, current policy is restrictive, but it will take more time to work. Second, rate cuts will eventually be appropriate, but later than originally anticipated.


Massachusetts Governor Maura Healey has proposed a $4.1 billion housing bond bill, which includes a plan to address affordable housing. Within the bill is a provision that allows municipalities to levy a transfer fee of 0.5% to 2% on commercial and residential sales over $1 million. The proceeds from the transfer fee, nicknamed “the mansion tax”, would be used to fund affordable housing projects.

Our Take: Lawmakers could begin debate on the proposal later this month. Supporters of the transfer fee stated that many Massachusetts municipalities, including Boston, have already expressed interest in implementing a similar fee and many Massachusetts communities need additional affordable housing options. Opponents believe that the new fees would lead to a decrease in occupancy and assessed values for commercial properties.

“Madison” and/or “Madison Investments” is the unifying tradename of Madison Investment Holdings, Inc., Madison Asset Management, LLC (“MAM”), and Madison Investment Advisors, LLC (“MIA”). MAM and MIA are registered as investment advisers with the U.S. Securities and Exchange Commission. Madison Funds are distributed by MFD Distributor, LLC. MFD Distributor, LLC is registered with the U.S. Securities and Exchange Commission as a broker-dealer and is a member firm of the Financial Industry Regulatory Authority. The home office for each firm listed above is 550 Science Drive, Madison, WI 53711. Madison’s toll-free number is 800-767-0300.

Any performance data shown represents past performance. Past performance is no guarantee of future results.

Non-deposit investment products are not federally insured, involve investment risk, may lose value and are not obligations of, or guaranteed by, any financial institution. Investment returns and principal value will fluctuate.

This website is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Although the information in this report has been obtained from sources that the firm believes to be reliable, we do not guarantee its accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the firm’s judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Quality refers to the bond ratings provided by the various third-party ratings agencies. Stability and predictability refer to the cash flow of individual securities and not to the market value or performance of portfolio holdings. There is no guarantee this strategy will lead to investment success.

In addition to the ongoing market risk applicable to portfolio securities, bonds are subject to interest rate risk. When interest rates rise, bond prices fall; generally, the longer a bond’s maturity, the more sensitive it is to this risk. Bonds may also be subject to call risk, which allows the issuer to retain the right to redeem the debt, fully or partially, before the scheduled maturity date. Proceeds from sales prior to maturity may be more or less than originally invested due to changes in market conditions or changes in the credit quality of the issuer.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.