Stanic tells commissioners to prepare for financial uncertainty

Stanic tells commissioners to prepare for financial uncertainty

Discord between the Fed and market have made life in the investment world challenging as the nation heads into 2023. Holmes County commissioners believe the county’s stability and strong saving policies have put the county in good shape.


With a tug-of-war existing between the federal government and the general market when it comes to the idea of inflation and growth in the nation’s economy, Eileen Stanic tends to side with the picture painted by the reality of the New York Stock Exchange, where numbers and the rise and fall of investments don’t lie.

Stanic, senior public funds advisor and director of advisory services at Meeder Investment Management, met with the Holmes County commissioners at the Old Jail in Millersburg Monday, Jan. 23 to discuss investment opportunities for the coming year for the county. She said the Fed has stated it will continue to raise rates in 2023.

Even rhetoric over whether the nation is in a recession abounds.

“We’ve started to see inflation slow,” Stanic said.

However, she added that the Fed presents one message while the market states otherwise. She stated the Fed declared it will be in a position to keep the current rates numbers steady through 2023, but as the nation moves into 2024 and 2025, people should expect to see those rates come back down.

Stanic said the market would show otherwise.

“The market isn’t in agreement, which is interesting, because historically, where we see the two sides in disagreement, it’s only for a short period of time,” Stanic said. “Then they converge. But we’ve had this gap between the market’s expectation and the Fed’s message. Now, for more than two meeting cycles it has disagreed.”

She said there is now this tug-of-war between the two sides as to which is correct, and she said looking at history, the market is usually correct in determining the future of rates.

Stanic said Holmes County would be best to get into the camp of the market because there will be continued pressure on short-term interest rates, but the economy will soften to the point where the Fed must lower rates to compensate by the latter part of 2023.

She said from an investment standpoint, the county would do well to get ahead of that, get investments locked in and build more stability on a long-term basis.

“We don’t want to be behind that ball of waiting until it happens before we adjust,” Stanic said. “We can go back over a 50-year period and say that rates have never moved this sharply. The rate of change has been so steep and abrupt, and it takes time for this to flow through the economy.”

Commissioner Dave Hall said prior to recent years the Fed didn’t have huge amounts of federal dollars being injected into the economy.

“There’s still a fair amount of that money floating around out there that hasn’t been spent,” Hall said.

Stanic said that many government entities continue to debate how to spend the federal funds they received during the pandemic, noting that they must spend all of it by 2026 or lose it. Entities must have funds appropriated soon, however.

Hall said the spending of those funds is stalling at the state level as states try to figure out how best to utilize the funds and what type of programs to invest it in.

Stanic said China is a wildcard in where the Fed decides to take rates, noting that China, the world’s largest economy, has been shut down until recently, with Covid restrictions just recently being lifted.

“That can have a major impact on the global picture,” Stanic said. “That could have a negative impact on inflation and support the Fed’s case.”

Hall said it appears as though it is going to be either inflation or recession, both presenting their own unique challenges for the economy and for families.

Stanic said that one rare circumstance in all the talk of inflation and recession is that the nation remains at historical lows in unemployment. She noted that inflation and recession are normally the results of high unemployment numbers.

“It’s going to be a very interesting year,” Stanic said. “We’ve got all these things that impact the economy.”

Commissioner Joe Miller said that because Holmes County has been fiscally responsible for many years, it is in solid shape to withstand whatever the Fed decides to do with interest rates.

One other topic of discussion between Stanic and the commissioners was the upcoming construction of the Holmes County Health District building.

Miller said monthly payments for the construction will begin in April, and the county will make those payments with the hopes that the building will be completed in around one year.

Stanic said with the county currently looking at the maturation of nearly $13 million this year, there should be plenty of funding available for the health building development.

Sales tax revenue for the county remained strong in 2022, standing at $13,104,541. That compared handsomely to 2019 when the county generated $8,748,552 in sales tax.

The monthly average for the county’s sales tax in 2016 was $626,397, and in 2022 that number had risen to an average of $1.09 million. This year got off to a stellar start, with the county receiving more than $1.21 million in sales tax.

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