The Federal Reserve met this week amid the release of spotty economic numbers this month and hinted at a potential future rate cut. In the last couple of weeks, the Fed has stated it will act as appropriate to sustain the economic expansion, and all eyes will be on their July meeting. Meanwhile, tensions are rising with Iran as the U.S. sends more troops to the region. But for now, the stock market shrugged off those concerns and focused on the positive Fed comments and climbed close to all-time highs. Also this month, articles on rethinking retirement, mysterious gold, and more in this week's The Friday Buzz. Enjoy!
- Fed Hints at Rate Cuts: The Federal Reserve Bank met this week and decided to leave short-term rates unchanged. But the big news is that they hinted that they would cut rates if the economy weakened and "being patient" was not mentioned in the statement.
- Economic Data Steadies: When the May job reports came in much lower than expected, it created concerns that the economy was slowing faster than anticipated. But last Friday the Commerce Department reported May retail store sales were up 0.5%. April's number was also revised up from a negative number to 0.3%. Seventy percent of the U.S. economy is consumer driven so the healthy retail sales number is a good sign the economy is OK. The Atlanta Fed's GDP Now model forecasts Q2 growth at about 2.0%, which is not spectacular, but is still solid growth.
- The New Retirement is… Work? Preparing for retirement is multifaceted and not only involves a plan to replace working income, but also a plan for socializing and maintaining a purpose. Hyrum Smith wrote on this topic in his book Purposeful Retirement: How to Bring Happiness and Meaning to Your Retirement. Not everyone finds a life of leisure and an open schedule to be all they imagined and many studies are showing working longer has positive health benefits.
- 5G - Fighting Over the Future of Data: The U.S. administration has banned Chinese company Huawei from buying U.S. software which may cost it $30B in revenue. The sanctions are in retaliation for China's closed markets as well as security concerns about a Chinese company's involvement in the data of everything tied to 5G. Where 1G - 4G technology opened communication between people (texting, web, video, GPS connections like Uber), 5G will be revolutionary in it's speed and machine to machine connections.
- Iran Tensions Increase: This week, President Trump left open the question of if he would use military force against Iran to keep oil moving through the region. The markets have not reacted to the developments in the Middle East assuming the saber rattling will fade and not affect oil markets and political stability.
- Libra Launched: This week Facebook announced it will launch Libra, a blockchain currency. The hope is that it will allow for borderless and frictionless payments for billions across the globe. Not everyone is as positive on the benefits of using Libra, or any cryptocurrency.
- Gold Mystery: Gold conjures up the image of wealth, riches, and luxury. But gold is also the currency of militants, tax evaders, money launderers, and apparently the ostracized government of Venezuela. President Maduro is accused of secretly selling the Venezuelan Central Bank's gold to avert sanctions and stay in power. Desperate to hang on, he is selling the country's last resources. But how else do you stay in power with economic growth contracting 20% and annual inflation of 10 million percent? (No, that is not a misprint!)
- Rick Steves Wants to Set You Free! I was thrilled to come across this article on Rick Steves, the master European traveler. My family has watched his travel shows on public television for 15 years and we always buy his books when traveling (I almost consider myself a cult fan!). He is a proponent that travel will change your life, and how you perceive the outside world. Check out his website for tips on traveling and to watch all his TV shows. (I can't wait for the next season!)
- Quote by Mark Twain: "Travel is fatal to prejudice, bigotry, and narrow mindedness."
Have an enjoyable weekend!