If history is the guide, in March 1980, inflation peaked at 14.6%, and Fed raised rates to 19.1% to bring back inflation to the neutral rate in June 1981. And, if the Core inflation is at 9%, is a 2.5% Fed rate enough to tame the beast? In our opinion, Markets misread the Fed statement …
The US economy shrunk by annualized 0.9% after contracted in the first quarter of 2022. Historically recessions are measured by falling real GDP in two consecutive quarters. However National Bureau of Economic Research defines a recession as a significant decline in economic activity spread across the economy for more than a few months. It’s Business …
As the fed raises interest rates in 2022 and possibly in 2023, short-term rates will go higher and nudge the ten-year rates higher than the current rates despite the inverted curve. Most probably, mortgage rates may go even higher than current rates. However, mortgage rates are still historically lower than those a couple of decades …
The breakdown by age: Baby Boomers: Baby boomers were born between 1946 and 1964. They’re currently between 57-75 years old (71.6 million in the U.S.) Gen X: Gen X was born between 1965 and 1979/80 and is currently between 41-56 years old (65.2 million people in the U.S.) Gen Y: Gen Y, or Millennials, were born between 1981 …
The conference board’s Leading Economic Index (LEI), the most reliable and significant indicator of recessions, has been trending down for the past two months. The LEI (a combination of ten leading indicators) usually drops far ahead of the forthcoming recession and has started dwindling, indicating a probable downturn shortly. Higher inflation, rising interest rates, supply …
Leading Economic Indicators are Flashing Yellow! Read More »
The US median household income is $72000, assuming 30% of the gross income (pretax) spent on housing, or $1,800 a month; a typical household could have afforded a $455,000 house when interest rates were at 2.5%. However, with interest rates hovering around 5.9%, affordability dropped to $303,000. As of the first quarter of 2022, the …
Historically market returns are positively skewed. I plotted the market returns from the pre-depression era to the last year, 2021. They ranged from negative 44 percent to 53 percent. If we ignore the outlier returns, in most years market returned between ten to twenty percent with an average return of twelve percent, including dividends. More …
Demand for workers remained robust in the spring, with April job openings and the number of times workers quit their jobs decreasing from their record highs. On Wednesday, the Labor Department said there were a seasonally adjusted 11.4 million job openings in April, a decrease from an upwardly revised record high of 11.9 million openings …
U.S. Inflation reached to 8.3 percent Annual Rate in April. U.S. inflation remained close to its highest annual rate in four decades last month, declining only slightly to 8.3 percent, showing that the economy continued to face upward price pressures. Last month, the Labor Department’s consumer-price index reading marked the first drop in inflation in …
U.S. Inflation reached to 8.3 percent Annual Rate in April. Read More »
According to a Personal Capital and Harris Poll survey, feeling financially healthy means pulling down a six-figure salary. The survey showed that the average amount American adults said they’d need to earn to feel-good financial shape was $128,000. That’s far from the median U.S. household income in 2020 of $67,521. The report found that this …
