Sec. Janet Yellen sees economic growth slowing and lower inflation on the horizon
United States Secretary of the Treasury Janet Yellen says, barring any unanticipated shocks to the global economy, inflation in the United States should continue to recede over the next year.
How Do Americans View Higher Inflation?
1. Worry about inflation has now risen to the point where it is perceived by Americans as the top problem facing the nation. As my Gallup colleague Jeff Jones recently reviewed, mentions of inflation as the most important problem facing the nation averaged only 1% between 1990 and 2021. But such mentions zoomed to 18% in our latest May Gallup poll. Inflation is thus now essentially tied with issues relating to the way the nation is being governed as the top problem facing the nation.
There are several year-end tax tips to keep in mind. These include:
1. Maximize annual retirement plan contributions.Tax-advantaged retirement accounts are funded with pre-tax dollars and compound over time. You may make pre-tax contributions to a 401(k) up to $20,500 if you are under 50 and $27,000 for those 50 and over. If it is not possible to contribute the maximum amount, you can try to contribute any amount matched by your employer. The maximum yearly contribution for an Individual Retirement Account (IRA) is $6,000 (under age 50) and $7,000 (50 and over).
Global Economics Intelligence executive summary, October 2022
Growth rebounds in the United States The world’s two largest economies exceeded growth expectations in the third quarter of the year. The US economy rebounded to a GDP growth rate of 1.8% year over year, after two quarters of contraction. The US growth was supported largely by consumption and exports.
Investors have been better off staying fully invested
The best-performing portfolio over the past 120-year period stayed fully invested throughout both Democratic and Republican administrations. Those who invested exclusively during single-party rule by their preferred party or during divided government fared much worse. The more time investors dedicated to the markets, the better, and the less time they dedicated to politics the better.
Politicians don’t radically re-engineer the economy or dramatically alter economic growth
Investors are concerned that a political party might drastically re-engineer the economy. The economy has been remarkably consistent in terms of consumption, business investment, and government spending as a percentage of gross domestic product (GDP) across multiple governments. Economic activity, as measured by the median annualized quarterly percent change in US GDP, has been very similar under both single party and divided government rule.
Monetary policy matters more
Monetary policy has historically impacted Presidents in a positive or negative manner. Presidents Clinton and Obama (and for a while Bush II) benefited from prolonged periods of benign inflation and easy monetary policy. Strong market returns under President Obama occurred during single-party Democratic rule, as well as during a divided government.
Market returns tend to be muted until late in midterm years
MISSING JUST A FEW OF THE MARKET'S BEST DAYS CAN HURt INVESTMENT RETURNS.
Market declines are part of investing
Despite the fact that stocks have moved steadily higher over long periods of time, history tells us that bear markets (an extended 20% or more decline) and other difficult patches aren't permanent. The good news is that corrections (a 10% or more drop), bear markets (extended periods of 20% or more declines), and other difficult patches haven't lasted forever.
Shrinkflation: The Silent Economic Threat That's Affecting Your Everyday Life
Shrinkflation: The Silent Economic Threat That's Affecting Your Everyday Life When the price of anything rises, that means the value of that item has decreased. Shrinking prices are just that: the price of something is decreasing. These two phenomena can be difficult to tell apart, but they are very much connected. Shrinking prices are the result of inflation. The price of something is rising so it makes sense that you would pay more for it over time. So, how can you tell that you’re seeing the effects of shrinking prices instead of just seeing a natural rise in prices? Here are some of the most common signs.
Why Invest in International?
Since 2007 international stocks have lagged the returns of U.S. stocks. So, are global stocks worth investing in if they have not generated superior returns to U.S. stocks in recent years? After all, by investing in international U.S. stocks, wouldn't I get enough exposure to global economies? To answer these questions, we must discuss the potential gains from diversification.