No prizes for guessing today’s topic. The Federal Reserve’s meeting ended yesterday with the usual statement and press conference by Ben Bernanke. But, as you could see from the market reaction, what was discussed was far from the usual.

For anyone who missed it, the Fed released a statement, which Bernanke amplified in his press conference, that a pullback from the bond purchasing program is indeed in the works. He even gave a target for when the Fed plans to start pulling back: at an unemployment rate of around 7 percent. To further support this, the Fed released more cheerful economic projections that suggest the pullback would start around the end of this year or so. The financial markets promptly sold off.

Yesterday, we talked about the big picture and why the longer-term outlook for the U.S. is actually quite bright. I mentioned in passing that there are some shorter-term risks between here and there, and I wanted to spend some time today catching up on those.

The big one in the papers today is China. As you know, I’ve been very concerned about China for a long time. Most recently, I wrote about the decline in wage competitiveness and about some of the risks to the financial system, discussing in both posts the increasingly tense regional security environment in Asia.

Many of my posts over the past several weeks have focused on immediate, here-and-now issues—or, at most, ones we’ll be seeing over the next couple of months. With summer here (finally!) and sunshine cheering me up, I thought I’d take another look at the medium- to long-term future—which was good the last time I looked, about two years or so ago, and which has since gotten even better.

Two years ago, when I first gave a presentation on the longer-term outlook for the U.S., I identified several key issues: capital, raw materials/resources, manufacturing, energy, geography, markets, and labor. The U.S. was in a relatively superior position compared with its competitors in all of those areas, except for capital.

Yesterday, I wrote that rising interest rates are the result of investors trying to discover what the real, market-set interest rate levels might be once the Fed starts pulling back from its stimulus program. Rate-setting by the Fed will be replaced by rates set by the market—and no one knows what they will look like.

What we do know is that rates will be higher. After all, if you remove a significant buyer from the market, demand will go down and so will prices. Lower prices for bonds will mean higher interest rates. What no one knows is exactly how much higher.

— Guest post from Peter Essele, senior investment research analyst

After the strong sell-off recently in the closed-end market, I figured it’s a good time to revisit an ongoing theme we’ve covered.

It was a year ago that we launched this blog, and I thought it would be interesting to consider how the world has changed since then. Day to day, changes may be small, but, over a year or more, they can add up to something much bigger. (I’m going to try something different with this post and say it mostly with charts. Let me know what you think in the poll at the end of the post.)

Employment and wages

As of the end of 2012, the average maturity of U.S. debt was around five years—65 months to be exact—up considerably from the October 2008 trough, and the longest average maturity in a decade, according to the Wall Street Journal. The Treasury intends to continue extending the maturity, with a goal of around 80 months in 2022.

One of the questions I’ve been getting lately has been about rising geopolitical tensions and what that means for investing. Recently, the focus has been on North Korea, but, with the Israeli strikes in Syria, that should be coming up as a topic soon.

My usual response, which isn’t meant to be flip, is that I’d be more worried if things were quiet. If they’re making noise, we at least kind of know what they’re thinking.

The good news just keeps coming. This week, we’ve had a seven-year record for home price increases, up over 10 percent from the year before, as well as a rise in the consumer confidence index to a five-year high.

Both show that the improvement in the U.S. economy is wide and sustainable. Representing two-thirds of the economy, consumer spending is the most important part, and higher consumer confidence and wealth suggests that spending will continue—and may well accelerate.

I have written about energy before, but, based on the number of recent news stories on the topic, I think it’s worth taking another look at just how much the energy landscape has changed over the past couple of years.

Last summer, I wrote that, with so many new technologies brewing, it was almost certain that at least some of them would pan out. I wrote about the shift of narrative, recalling a meeting with clients in Massachusetts where I actually sparked an argument about which solar program was better. I wrote about how fracking would be a transition phase.