In what we view as a major attitude shift, a recent survey showed that investors fear inflation and potential Fed tightening of monetary policy more than Covid-19. CNBC As a result, investors were looking to the Federal Reserve this week for assurances that it had no near-term intention of retreating from its dovish policies that promote US economic growth. Wall Street Journal And, indeed, Chairman Jerome Powell gave those reassurances on Wednesday, noting that, while the US economic outlook was improving, the US was not close to the Fed’s target sustained 2% inflation rate or to full employment. Barring the proverbial unforeseen developments, rate hikes may be off the table until 2024. CNBC
Goldman Sachs Raises US 2021 Growth Prediction: More bullish than most Wall Street firms, Goldman Sachs predicts 8% growth for the US in 2021, in its most recent update. This would be the largest growth rate in decades. Equally significant, the firm believes that stocks can tolerate higher interest rates. Axios FXStreet Others see the potential for roaring growth. New York Times
Tax Increases Coming? The Biden administration is floating “trial balloons” to gauge reaction to some potential proposed tax increases. Candidate Biden proposed raising the highest marginal rate for individuals from 37% to 39.6% while pledging not to raise taxes on those earning less than $400,000. Might we also see proposed changes to capital gains taxation. He also pledged to seek an increase in the corporate tax rate from 21% to 28%. It is way too early to know how all this shakes out. We know that increased taxes will be needed to pay for sizable infrastructure spending proposals. We also know that passing tax increases in the Senate will not be easy. Apart from the 50-50 party split, there are a handful of moderate Democrats who will not be enthusiastic supporters of higher taxes. More to come on this big storyline. CNN
Covid-19 Variants: We must always ask ourselves what can go wrong. Investors must manage downside risk too. If it turns out that there was a skunk at the 2021 garden party of economic growth, it may well turn out to be emerging variant strains of Covid-19. The so-called B.1.1.7 variant, first discovered in Britain is especially concerning. The “experts” are concerned. CNN Axios As best we understand it, current vaccines do offer protection against known variants, but this whole area is on the murky side. Eased restrictions before massive vaccination occurs could lead to setbacks.
When Will Electric Cars Rule the Road? Fewer than 1% of vehicles on the road now are electric and are only projected to be 13% by 2035. But by 2035, it is also projected that electric cars could make up 25% of new sales. Of course, this is all no more than sophisticated guesswork but the trend is unmistakable. The linked interactive article can bring you up to speed (so to speak). New York Times
Young Social Media Users See Soaring Hate Speech: Pulled from their schools and with normal relationships with their friends impaired, many of our young have experienced almost total disruption during the pandemic. More use of social media is one natural outlet for the young, but recent data is showing disturbing increases in online social media hate speech (i.e., body shaming, racial, homophobic, and sexist). Where is this vile hatred and crude intolerance coming from? Axios
Bruce Robert Coffin Detective Novels: I recently discovered these novels, featuring Portland detective John Marsh. Coffin knows whereof he speaks as a former 27-year veteran detective with the Portland Police. I devoured the four-book series over a couple of weeks. The novels stand on their own merit, as Coffin writes well in this genre, but you will enjoy them even more if you are generally familiar with southern Maine. Amazon.com
A Quote to Consider: “It is you who makes the moment happy, not the moment that makes you happy.” Thich Nhat Hanh
Worthy Short Takes:
- Is Walking 10,000 Steps Daily Necessary? The idea that we should be taking at least 10,000 steps a day is not founded on evidence-based science. It mimicked the trade name of a pedometer sold in Japan decades ago. By all means, walk as much as possible, but the latest research shows that the benefits level off around 7,500 steps. CNN
- Family Dogs Sync with the Kids: Ever notice how the family dog often seems to bond with the children? It wasn’t your imagination, as family dogs tend to synchronize their movements with the young. Moving together is bonding in many respects. Dancing anyone? New York Times
- Time to End Time Changes? No one likes losing an hour of sleep when the clocks spring forward. It is more than just being grumpy for a day or two. The loss of sleep and its disorientation is known to increase the chances of strokes, heart attacks, and automobile accidents. There is bipartisan support for eliminating the time change, and we may finally see something get done this year. The Spokesman-Review
- Enjoy a Good Bagel? When you need a good bagel, nothing else will do. Three bagel bakeries in Maine made the Food & Wine Best Bagels list. Press Herald Food & Wine
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As always, thank you for reading. Stay safe and be well. We look forward to hearing from you and connecting.