What’s next for the economy? Matt Finn breaks down inflation, interest rates and the markets on the Real-Life Finance® Podcast

On the latest episode of the Real-Life Finance® Podcast, host Ben Joergens sits down with Old National’s recently retired chief economist, Matt Finn, to take a closer look at the state of the U.S. economy and what it could mean for consumers and investors.

Finn discusses economic growth, inflation and why prices still feel high, the labor market, interest rates, consumer spending and the importance of keeping short-term headlines from disrupting long-term financial goals.

On the current state of the economy:

“In a word, growing. The economy is growing. Third-quarter earnings are expected to come in fairly robust. The labor market is very stable, unemployment is 4.2%, and on average, we’re generating 50,000 new jobs a month, which is enough to keep the labor market stable.”

On why interest rates could remain higher for longer:

“What we’ve observed is that both the inflation premium and the term premium have been increasing, which means investors are a little less certain as to how things are going to shake out over the next 10 or 15 or 20 years. And so, they’re demanding higher yields.”

“As a result, that’s driving those prices higher. It translates to things like mortgage rates. But I’m in the camp that interest rates are going to remain higher for longer.”

On making financial decisions when the headlines keep changing:

“Match your decision-making to your time horizon. If you’re building wealth for the future, like your 401(k) plan, or you’re planning to buy a house, don’t let these short-term headlines disrupt your plan. It’s okay. This too shall pass. These disruptions will pass and be replaced by a whole other set of things that you need to worry about.”

“Investors who maintain that long-term outlook, keep their focus, keep saving, keep setting money aside, whatever it is that you’re doing, most of the time, if you stay focused on these long-term goals, the short-term stuff will take care of itself.”

On the value of having trusted financial experts:

“You do need a good team, whether it’s a tax advisor, just an overall financial planner, a wealth advisor, a portfolio manager, whatever it is.”

“You don’t need to spend a lot of money hiring this whole team of experts for a modest-size portfolio, but regularly consulting with someone that is qualified to offer you that type of advice is invaluable over the long term.”

To listen to the podcast, click here.