So, we just saw the first rate cut since the Fed took an aggressive approach to taming inflation in the spring of 2022. What was it that the Federal Reserve saw that gave them confidence in shifting their approach? Well, if we look where inflation has come down from in the last few years via truflation.com, we have come a long way. The US inflation index now sits at 1.52%, down from 11.5% at the peak of the recent crisis. The Federal Reserve has two key mandates – maximum [...]
If you’ve been listening to the financial news for the past year, you’ve probably heard many times the phrase “soft landing” when it comes to the Federal Reserves goal of reducing inflation. The Fed set out on a phase of tightening in the spring of 2022 after realizing inflation wasn’t so “transitory.” Those rate increases were very difficult for the stock and bond markets to digest in 2022, but we haven’t seen the broader economic pullback that most economists predicted in 2023/early 2024. A “soft landing” implies a reduction in [...]
While attending a recent conference in Philadelphia, I had the opportunity to visit Liberty Bell. Philadelphia is such a historic city, with sites that represent the very beginnings of our nation, such as Independence Hall, the President’s House, and the Betsy Ross House. During a time in our country when there appears to be so much division, I wanted to visit a landmark that has been a symbol of freedom for all. Liberty Bell bears a timeless message: “Proclaim Liberty Throughout all the Land Unto All the Inhabitants thereof”. The speaker of the [...]
As you can see from the chart, we’ve added $2 trillion in debt in just a couple months. I'm alarmed by the pace at which the US is adding to its debt on a year over year basis these days, so I decided to do some digging to see what our debt history has looked like. Treasury.gov has a record on US debt back to 1790. For the most part, it vacillated in the $25 million to $80 million range for the first 70 years, with an average of $58 million. Then in [...]
Insurance is a rapidly growing expense, which is taking up more and more of the family budget each year. The average US family health insurance premium in 2000 was $6k. In 2022 the average premium is $22k, which is an increase over that time period of 249% or 5.8%/year. Inflation during that same time averaged 2.5%/year, so the cost of insurance for a family has grown at a rate of more than double that of inflation. In my business, we used to carry our own insurance plan for employees, but we gave [...]
U.S Home prices hit an all time high in July while affordability dropped to new lows. How can home prices continue to rise, while affordability drops? The main culprit seems to be a lack of inventory due to limited building of new homes and Americans who are staying put in homes with debt that was financed at very low rates. If you are considering moving to a new home, would you leave a rate of 3% to go to a rate of 7.2%? Not likely, so affordability continues to plummet as rates go [...]