Discussion on the current state of the economy, including the Fed's interest rate decision and better-than-expected jobs report. The impact of interest rate increases on companies and the importance of long-term investment strategy are also explored.
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Quick takeaways
Higher interest rates may pose challenges for smaller businesses and commercial real estate.
Millennials are better prepared for retirement due to automation, low-cost index funds, and a long bull market.
Deep dives
Fed's Interest Rate Decision and Jobs Report
The Federal Reserve has decided to hold interest rates steady for now, but there is an increasing consensus that they may raise rates in the future. The recent jobs report showed that the US added 336,000 new jobs, exceeding economists' predictions. This is good news for the economy, but it has caused volatility in the markets, with stocks and bonds experiencing declines.
Impact of Strikes and Ticking Time Bombs
Tens of thousands of workers are currently on strike, but in the broader context of the US economy, the impact of these strikes is not significant enough to affect employment and inflation numbers. However, as interest rates are likely to rise in the future, smaller businesses, startups, and commercial real estate may face challenges. Companies relying on cash reserves and commercial real estate, particularly office spaces, are at risk due to higher borrowing costs and lower property valuations.
Treasury Bonds, Buying a Home, and Retirement Readiness
Treasuries are currently attractive due to the increasing treasury yields, providing opportunities for individuals to park their cash. Additionally, this is considered a good time to buy a home, as competition is low and buyers have more negotiating power. Furthermore, a recent Vanguard report shows that millennials, across income brackets, are better on track for retirement than previous generations. Automation in retirement plans, access to low-cost index funds, and benefit from a long bull market have contributed to millennials' financial readiness for retirement.
#465: The Fed is holding interest rates steady for now. The jobs report is better than expected. Stocks and bonds are both going down. What's going on right now in both the economy and in the markets and where should you put your money and your time and attention? That’s what we’re going to cover in this episode.