Interest rates for February, impacting retirees collecting their BP RAP benefits on June 1st, 2022, saw a rapid increase. The Federal Reserve recently announced that for the first time in three years, it would increase short-term interest rates by a quarter of a percentage point. In addition, the Fed has stated that it would like to see short-term interest rates near 2% by the end of the year, which would mean a hike at each of the remaining central bank meetings this year.
While many investors have remained positive on the Fed’s aggressive move to combat inflation, even Fed officials acknowledge higher rates could slow economic growth this year. This cautious stance is attributed to the upward pressure on inflation caused by the ongoing invasion of Ukraine. We anticipate these recent moves by the Fed indicate that interest rates will continue to head even higher. This significant increase to interest rates will cause a substantial drop to Heritage Employee’s lump sum values thus, we are recommending BP Retirees strongly consider filing for your pension as soon as possible.
Understanding how interest rates can affect your pension value is a valuable tool for you. If you would like to learn more about how your pension is impacted by interest rates, please do not hesitate to contact one of our experienced financial advisors who specializes in knowing the inner working of your BP RAP plan. This service is free of charge for all BP Employees and Retirees.
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Stock investing involves risk, including loss of principal. International & Emerging Markets investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in Emerging Markets.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Confidentiality Notice: This email transmission and its attachments, if any, are confidential and intended only for the use of particular persons and entities. They may also be work product and/or protected by the attorney-client privilege or other privileges. Delivery to someone other than the intended recipient(s) shall not be deemed to waive any privilege.
Capstone Wealth Advisors and its representatives are separate and apart from any other named entity.