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03.10.2023 by David M. Smith

Short-term Rates May Go Higher Than Expected – Increasing the Risk of a Recession

Jerome Powell, the Federal Reserve Chair, met with the Senate Banking Committee to give his assessment of the economy. He stated that interest rates were going higher than many expected and it was necessary to cool the hot job market and avoid higher inflation. Even in December, Fed policymakers thought rates would top out at about 5.25% and now most investors are expecting it to go as high as 5.75%. Next week’s February inflation numbers will provide the first look to see if January’s higher-than-expected inflation was a head fake or a trend calling for higher short-term rates. WSJ

The truth is, no one knows how high short-term rates will have to go to cool the job market and inflation. But the higher rates go, the higher the risk of a recession, plus there will be added volatility in the markets. Jerome Powell said in the Senate comments that even though inflation has moderated some, the road back to 2% will be bumpy. CNBC

U.S. Employment Reports: The ADP National Employment Report was released this past Wednesday and it showed private companies added 242,000 jobs in February, well above the expectation of 200,000. U.S. News & World Report And just about the time many of you will be reading this on Friday, the total non-farm payroll jobs report will be released by the Bureau of Labor Statistics. The expectation is that approximately 220,000 new jobs were created in February. But if that number comes in much higher than that, it will add fuel to the fire for the Federal Reserve to remain hawkish and aggressive with short-term rates. CNBC

March Madness is Here! – Test Your College Basketball Knowledge (or luck) Against The RSWA Team and Join the RSWA NCAA Tournament Bracket Challenge:  We are hosting a bracket challenge for this year’s NCAA Tournament and want you to play with us! There will be a prize for the individual with the highest score, so start doing your research on potential upsets! The teams will be selected this Sunday, the 12th, and brackets must be submitted by noon ET on March 16th. Follow the link to join our group and fill out your bracket!  CBS Sports – RSWA Bracket Challenge

FAI 03.10.23

Financial Planning/Investment Strategy Corner:              

The Biden Tax Plan: President Biden will be releasing his budget proposal this week, including potential new taxes to help fund the Medicare spending gap. He promises to increase taxes on the wealthy, which he defines as those making more than $400,000 in earned or passive income. It’s important to note that the President’s plan is just a proposal. The Constitution states that all bills for raising revenue must originate in the House of Representatives which is controlled by Republicans and they will surely have different budgetary opinions. We will watch events to see if, or how, any tax changes are implemented in the new budget that affects clients and we will keep you posted. Until then we will watch the political slugfest unfold. Click on the links to read about the President’s budget proposal in his own words and the potential challenges to his arguments in the other link. Let the budgetary games begin…

Joe Biden: My Plan to Extend Medicare for Another Generation - NYT

Biden’s Tax and Rationing Plan for Medicare – Editorial Board of the WSJ

Quick Hits:

  • Four ways to speed up – and clean up – your smartphone: WSJ
  • The northeast has had a snow drought so far this winter: AP News
  • Vitamin D supplements may help ward off dementia, especially in women: Good News Network
  • Alan Alda and Mike Farrell perform as Hawkeye and BJ in their first new MASH scene in 40 years with a script written by ChatGPT. Alda’s take – screenwriters are safe for now as the AI model missed on comedy: Clear + Vivid Podcast NYT
  • Can cannabis help you sleep? Sleep Foundation NYT
  • The daylight savings time change is this Saturday. Here are some strategies to help adjust to the change: CNET

How to Have a Healthier Relationship with Stress: Many of us are stressed out. It could be from work, family, caregiving, or just reading the daily headlines. Some stress is required in life to be challenged and grow, but chronic stress affects our health, happiness, and even longevity. Many of the strategies to help involve how to handle stress triggers such as embracing uncertainty and not worrying about what you can’t control. Also, exercising with high-intensity interval training, saunas, and cold showers can potentially increase the stress tolerance of cells at the metabolic level (But please check with your doctor before trying any new regimen). If we can build resistance to stress and handle it better, it provides the ability for us to thrive. Now, where is the closest sauna?

Seven Ways to Have a Healthier Relationship With Stress - The Greater Good – UC Berkeley

Do You Cause Your Own Stress? How To Stop a “Toxic Cycle” (

TED Talk Recommendation: This TED Talk has been out for several years, but it is worth sharing. The longest study on happiness is with Harvard sophomores and Boston low-income teenagers. The study began in 1938 and at the onset, most of the participants' biggest life goals were to become rich and famous. But results of the study show that good relationships are what make people healthier and happier. Those relationships can be with their spouses, family, co-workers, or good friends. The bottom line is that social connections and high-quality relationships are really good for you and the opposite, loneliness, is toxic for us. So, take the time to reach out to someone you care about that you haven’t spoken to in a while and say hello – it’s good for you and them!

Robert Waldinger: What makes a good life? Lessons from the longest study on happiness | TED – YouTube

Quote: “Some of the biggest challenges in relationships come from the fact that most people enter a relationship in order to get something: they’re trying to find someone who’s going to make them feel good. In reality, the only way a relationship will last is if you see your relationship as a place that you go to give, and not a place that you go to take. Tony Robbins

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