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American Wealth = Good News: The news cycle tends to bring headlines of war, inflation, political turmoil, and other not-so-great topics. Often, the good news is buried. Recently, the Fed and Treasury released its 2022 data from the Survey of Consumer Finances. It’s a massive survey they do every three years where they ask households about their finances. The most recent report tells an encouraging story:

  • American’s wealth has been way up since before the pandemic.
  • The increase is very even across the board, with people at the bottom of the distribution gaining proportionately more than people at the top.
  • Inequality is down, including racial inequality, educational inequality, urban-rural inequality, and overall wealth inequality.
  • Debt is much less of a problem.

You can find the full report here. We always want to remind you that there is always more to the story than the headlines you read. That said, if you feel like your financial plan needs reviewing to better solidify your story in one of these categories, please reach out to us today. We want you to know these things are true with your experience as well.

Treasury Yields: The benchmark 10-year U.S. Treasury note yield climbed 11 basis points early Monday to 5.02%, the highest level since 2007. The increase fueled concerns about rising interest rates. Federal Reserve Chair Jerome Powell said last week that because bond rates are increasing borrowing costs, the Fed might be able to hold off on another interest rate hike at its November meeting, although central bank policym­­akers remain open to another increase if the resilient economy keeps inflation from coming down. There is a rolling correlation between the S&P 500 and long-term U.S. Treasury bonds (total return basis):

Business Briefing

  • U.S. Economic Growth: U.S. economic growth more than doubled in the third quarter compared to the previous three months, the Bureau of Economic Analysis reported Thursday. U.S. GDP grew at an annual pace of 4.9% in the quarter that ended in September, faster than economists had predicted after the 2.1% growth of the previous quarter. Consumer spending fueled the resilience despite the Federal Reserve’s aggressive campaign to slow the economy with interest rate hikes to bring down inflation. Fed Chair Jerome Powell said last week that recent data showing the economy’s strength and strong labor demand could “put further progress on inflation at risk.” (The Wall Street Journal)
  • States Sue Meta: Dozens of state attorneys general on Tuesday sued Meta, parent of Facebook and Instagram, accusing the social media powerhouse of harming young users with addictive features, including frequent notifications and infinite news feeds. The lawsuit accuses the company of contributing to a national mental health crisis. “Meta has profited from children’s pain by intentionally designing its platforms with manipulative features that make children addicted to their platforms while lowering their self-esteem,” said New York Attorney General Letitia James. Meta said it was “disappointed” the officials sued instead of “working productively” with the company, saying it shared “the attorneys generals’ commitment to providing teens with safe, positive experiences online.” (Reuters)

Retirement Goals: A consistent topic of conversation in our business is retirement. It’s probably a topic of conversation in your world, too. We were inspired this week by a 75-year-old who regularly completes hikes greater than 100 miles. While hiking through on the Appalachian Trail, he heard about the 83-year-old who completed the Trail. You can read the inspiring story here. Regardless of whether this sounds like fun or punishment, it goes to show that you’re never too old to accomplish your goals! Or another way to say it: “We don’t stop dancing because we grow old; we grow old because we stop dancing” (George Bernard Shaw).