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Slick TV ads often make financial planning and wealth management sound simple, but it’s usually not. Managing wealth requires knowing a lot about highly technical topics, like taxes, government regulations, and finance as well as history, psychology and how to communicate with loved ones about sensitive issues. This article highlights some of the knowledge needed to manage wealth and why it’s often so daunting without the help of an independent personal financial advisor who is familiar with your situation.
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Understanding The Federal Reserve Mandate To End Inflation
The Federal Reserve System, the nation’s central bank, has a dual mandate to pursue maximum employment and maintain price stability. These two priorities are currently treated equally, but that was not always the case. In fact, the Fed’s bias toward maximizing employment was a critical driver of the stagflation that plagued the U.S. in the late 1960s and 1970s. Recognizing the need to balance price stability and maximum employment, in 1977, Congress revised the Federal Reserve Act.
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Fed Governor Kugler Details Inflation And Economic Outlook
The 12-month inflation rate, as measured by the personal consumption expenditures (PCE) index, was 2.6% in December, down from its peak of 7.1% in June 2022, and the six-month rate for PCE inflation was even lower, at 2%, which is the target rate set by the Federal Reserve.
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Why Rates May Not Be Cut Until June
The cost of a loan to buy a home, car, college education, and achieve the American Dream is staying the same for now. As expected, Federal Reserve Chairman Jerome Powell said the central bank did not lower loan rates following the Fed’s Wednesday, Jan. 31, 2024, policy meeting.
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Practical Suggestions For Achieving Your 2024 Resolutions
New Year’s resolutions usually fail because they‘re often too hard to achieve. After six months, only 10% of people who make resolutions achieve them or remain committed to them, , according to a study by Dr. Mark Griffiths, a Chartered Psychologist and Distinguished Professor of Behavioral Addiction at the Nottingham Trent University. What can you do to make financial, medical, or other personal resolutions more likely to be achieved?
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A Sign Of Progress In Solving U.S. Economic Problems
The Federal Reserve appears to be pulling off a feat most experts did not believe it could: ending its aggressive inflation-fighting campaign of 11 interest rate hikes without tipping the U.S. economy into a recession.
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Fed Keeps Rates Unchanged; Expects Easing In 2024
To promote transparency and free markets, the Federal Reserve System began publishing the opinions of the 19 U.S. central bankers that decide interest rate policy.
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Have You Logged Into Your Social Security Account?
Have you logged in to your Social Security account? Creating an online account at SSA.gov is an important first step in understanding your retirement income situation. However, only about 60 million of the 160 million individuals in the U.S. labor force who have Social Security accounts have created a way to access the Social Security Administration’s website.
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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
All year long, the economy and stock prices have fooled experts and consumers, outperforming expectations month after month.
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Test Your Financial Planning IQ
The five questions below are a challenge meant to allow you to assess your knowledge of investing, tax and financial planning. If you have been following our news stream, this quiz draws on familiar ground. The answers are below.
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Planning Briefs
While Congress Must Deal With Debt Ceiling, Leading Economic Indicators Are At A Record High
Published Wednesday, September 29, 2021 at: 12:05 PM EDT
The Standard & Poor’s stock index dropped 2% yesterday and U.S. Secretary of the Treasury Janet Yellen, testifying before the Senate Banking Committee, warned of “catastrophic” consequences if Congress failed to come to an agreement on the debt ceiling by October 18. Meanwhile, a showdown is looming in Congress over raising the United States government’s debt limit and how much to spend to improve the nation’s infrastructure, as well as the size of the budget for the approaching fiscal year ending September 30, 2022.
Despite the grim financial headlines in recent days, the U.S. Leading Economic Indicators (LEI) index is signaling robust growth is ahead, and the LEI has a history for being a reliable indicator of future growth.
The LEI plunged before every recession in modern history except for the Covid recession. Keep in mind, a bear market in stocks has been triggered by every recession in modern history except for the crash of 1987. These two historical facts make the LEI an important forward-looking indicator of financial economics.
The LEI is a broad indicator of what’s ahead, reflecting recent financial news because it is comprised of 10 components:
- average weekly hours worked in manufacturing
- average weekly initial unemployment claims
- manufacturers’ new orders – consumer goods and materials
- Institute of Supply Management index of new orders index
- manufacturing sector new orders, nondefense capital goods
- building permits – new private housing units
- stock prices, as measured by the S&P 500
- Leading Credit Index™
- interest rate spread of the 10-year Treasury Bond minus the Fed Funds Rate
- index of consumer expectations.
With the LEI rising sharply again in August, the index is higher than ever. Meanwhile, the Conference Board, an association for U.S. corporate giants that administers the LEI, says the LEI “remains on a rapidly rising trajectory.” While the Delta variant and inflation fears could, in the near-term, raise unemployment and cool consumer spending, the trend in the LEI is consistent with robust economic growth for the remainder of 2021.
This is not to downplay the risk of Washington, D.C. dysfunction. Congress conceivably could undermine the economy by causing the government to default, which would be bad for stock prices. But Congress is unlikely to cause a self-inflicted wound by failing to agree on the debt ceiling, as it has done every year since 1917, when the debt ceiling became federal law. The Conference Board economics team expects real annual growth of the United States of nearly 6% in 2021, before easing to a robust growth rate of 4% in 2022, and Congress has until October 18 to figure out the way forward on budget and infrastructure legislation.
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