The markets took a breather and traded mixed after the Federal Reserve ended its open market committee meeting with rates unchanged. The Dow gained 41 points to 22,412 on heavy trade led by bank and material stocks while the NASDAQ finished with a slight loss.
The central bank today kept short term interest rates unchanged but did announce the beginning of the portfolio shrinkage project or “PSP” in which they will dump $10 billion in bonds in October and eventually ramp that up to $50 billion per month. Fed Chair Janet Yellen hinted about a rate hike in December but it is not a done deal as we will be getting lots of data over the next three months plus there will be “news bombs” falling on a regular basis.
A client of mine who lives in the corridor between Olympia and Aberdeen told me yesterday of an economic tour he was on with local civic leaders. They visited a pump manufacturer, lumber mills, the port of Aberdeen and the second automated dairy farm in the state of Washington where cows are milked by robots (think R2D2). He learned that while Aberdeen is still economically depressed it is beginning to see growth in a booming port, mills now working overtime, tech companies moving into the old Satsop nuc site and a shortage of housing and labor. Local banks like Timberland Bank and Bank of the Pacific are seeing jumps in loan revenue and people moving out of the Seattle/Bellevue area are building homes in places like Seabrook which recently reported a huge increase in both sales and rental revenue. Aberdeen also just got its first craft brewery. It seems the economic boom in Seattle is finally radiating out to some rural areas.