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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
At A Unique Moment In Financial History, Five Takeaways From Fed Chair's Press Conference
Published Thursday, February 2, 2023 at: 8:24 AM EST
The world is at an historic financial economic crossroads. The United States, the world’s most influential economic power, is recovering from the pandemic and complications added, as a consequence of Russia’s invasion of Ukraine.
With all that happening, as is customarily done every two months, the Chair of the Federal Reserve Bank, Jerome Powell, conducted a 45-minute press conference at 2:30 p.m. ET, Wednesday, fielding more than two dozen questions from the free world’s best economic journalists. Here’s a summary of what the Federal Reserve chairman said today affecting investment decisions.
1. Fractional 2023 Growth. The Federal Open Market Committee (FOMC), which decides the level of interest rates, expects fractional growth, but not a recession in 2023. Mr. Powell said his base case is that inflation will return to 2% without a significant downturn or big increase in unemployment.
2. Inflation Fight Not Over. It’s the early stages of disinflation. Goods inflation shows clear signs of being beaten but key services have not even begun to show signs of disinflation. That’s going to take months. Specifically, the core services excluding-housing component of the Fed’s favored inflation indicator, the Personal Consumption Expend Deflator (PCED) needs to come down before central bank tightening will stop.
3. Strong Warning Against Defaulting. “There’s only one way forward here, and that is for Congress to raise the debt ceiling so that the United States government can pay all of its obligations when due,” said Mr. Powell. “And any deviations from that path would be highly risky, and that no one should assume that the Fed can protect the economy from the consequences of failing to act in a timely manner.”
4. A Unique Moment. “This is not a standard business cycle, where you can look at the last 10 times there was a global pandemic, and we shut the economy down, and Congress did what it did,” Mr. Powell said. “It’s just…it’s unique. I think certainty is just not appropriate here.”
5. It’s Complicated. Federal Reserve chairmen traditionally did not speak about policy stance of the central bank, leaving investors to figure it out over time. In the last 50 years, Fed chairs began to speak in cryptic terms about current policy. In 2006, Ben Bernanke changed Fed transparency, and Janet Yellen and Mr. Powell have followed his lead by conducting press conferences every two months and speaking plainly. Which highlights a new challenge in interpreting the Fed chair’s policy pronouncements at press conferences: It’s complicated. Consider this quote from Mr. Powell the Feb. 1, 2023 : “Again, we don’t see it (rate hikes) affecting the services sector ex-housing yet. But I mean I think our assessment is that we’re not very far from that level. We don’t know that though, we don’t know that. So, I think we’re, you know, we’re living in a world of significant uncertainty.” Mr. Powell is trying not to be cryptic but explaining Fed policy presents a new challenge. Being transparent about complexities at a live press conference is hard.
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