The Fed, Economics, Interest Rates and Interest Rates Review Part 1

On Friday, we gave you a preview of this post and in completing it over the weekend, it became a bit longer than expected, so we are doing a two part series.

Some of this is also in our coming Newsletter, but with more turf here, we can dig a little deeper, especially in a two part series…

Mid week last week the FOMC (Federal Open Market Committee) led by Jerome Powell and company released their estimates of where interest rates will be over the next several years.

This chart, known as the Fed Dot Plot, represents a dot for each voting member …. looks like there is a ton of group think going on as everyone is pretty much in agreement on the near term view and with a variance of only one percent in the longer term view – far right (One vote at 2% and two at 3%)

This chart from our Friends at JPMorgan includes not only the FOMC estimates but what the Capital Markets are assuming – (This estimates comes from the Futures Market and is easily ascertained)

Market estimates can and do change quickly.

Here is a blow up of the far right portion of the graph – Orange is market expectations again from the futures market and Purple is long run assumptions.

So markets think that rates will stay low and the FOMC also agrees.

Is there any reason that the FOMC would HAVE to raise rates?

Yep, one word ….

Inflation!

In Part 2 we will discuss …

Have a Great “FOMC and Interest Rates” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

FOMC Speaks, Preview Analysis – Newsletter Update – Friday …

On Wednesday September 16, 2020 the FOMC (Federal Open Market Committee) led by Jerome Powell announce their updated thoughts on the Economy and their expectations….

FOMC Preview of Rates and Economic Data

Knowing its a Friday, we are making this a Preview of a more detailed article coming next week…

Here is the FOMC expectations of where rates will be for the next few years… aka Fed Dot Plot

Lower for longer is THEIR expectations…. but there is an inflation assumption embedded here….. hmmmm

Newsletter Update – Speaks to Rates and Inflation

We speak on this very subject in our coming Newsletter – which once again is different from what we have done before….

The coming Newsletter is a review of what has happened over the year so far and actions and assumptions similar to above and what the ramifications of these decisions may be looking forward…

Given the thematic review, this Newsletter is one big flowing review and analysis…

We think you will like it!

Friday

Ahhhh…. today is a Friday heading into a much excitable College Tennis Tournament for the 15 year old in Aggie land… fingers crossed….

Enjoy your day, your weekend, and your time with friends, family and those special in your life!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Social Media Platforms Deep Dive … Chasing The Kids Next App … Good Luck

About one week ago, both kiddos asked me if I knew that TikTok was scheduled to be banned in the United State – Much to their surprise, I did …. What I did not know, was exactly what TikTok did at the time….

Thankfully with a little help from the kids, I now understand what this social media app does…. not really sure of the popularity … but ok

Had no idea, just how big this app was….

With multiple recent office conversations on the subject, timely chart!

Social Media Platforms Size and Analysis

Thanks once again to our friends at Visual Capitalist, here is an excellent chart of the platforms…

Hope there are fellow parents that are better at anticipating where the kids next hot app will be … for monitoring purposes …

Just got familiar with Instagram, kids gone… all about snapshat and the afore mentioned TikTok …

Talk Facebook to a teenager and they will look at you like you have three eyes…. not kidding!

Good Luck Fellow Parent App Chasers….may the force be with you in finding the next hot app they gravitate to!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Consumer Spending aka High Frequency Data ?? – Winners and Losers … Fantastic Chart

The Fancy Wall Street Name for this information is High Frequency data…. just so you know, we are not really sure where that comes from or what it means in this context… we even checked Wilkipedia and it went into different directions — yaya digressing… too much Java at this writing…

Our Term – Consumer Spending – Winners and Losers

We have been tracking the TSA through put (Air Travel) with great enthusiasm our selves, here and here … Remember this fancy chart we made?

Our Friends at JPMorgan have one upped us and included some really interesting stats, including the afore mentioned TSA throughput..

For those with eyes like ours, first the tiny legend blown up –

And here is the actual chart showing the growth (with the tiny legend) – told ya it was hard to read!

The most resilient number MBA Purchase applications, were discovered and reviewed by us here and here, but this is a neat chart/update – and continues with our original thoughts that Housing will likely be insulated, greatly different from the 07-09 crisis.

Things are coming back, slowly but surely and some much faster than others!

There you have it, some really neat Consumer Winner and loser numbers!

Have a Great “High Frequency Data??” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

2020 Q3 Estimated Quarterly Tax Reminder … Newsletter Pre-View …. Friday

Reminder … especially pertinent given all the changes in due dates !

ES Q 3 Quarterly Tax Estimated Payments Due

Next Tuesday, September 15, 2020 is the Due Date of Quarterly ES Payments … here is a direct link to the IRS pamphlet where you can find the coupon, instructions and of course where to mail the payment!

Newsletter Preview

With fingers crossed that current events don’t destroy the third Newsletter in a row, we are trepidly wading into a review of the events so far this year, our thoughts … and some really neat charts that we think you will like…

Here is a sample of a couple of our favorites so far:

This second chart is amazing to us …just how much horsepower is being thrown at the Global Markets!

Friday

Ahhhh… today is a Friday, heading into a big pro sports filled weekend ….

Enjoy, be safe and have a Great Friday and Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Meet the Trimmed Mean Inflation Gauge … A Measure to Keep Watch

With the FOMC (Federal Open Market Committee) led by Jerome Powell and company at their most recent meeting, made the following comments:

On price stability, the FOMC adjusted its strategy for achieving its longer-run inflation goal of 2 percent by noting that it “seeks to achieve inflation that averages 2 percent over time.” To this end, the revised statement states that “following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.”

The updates to the strategy statement explicitly acknowledge the challenges for monetary policy posed by a persistently low interest rate environment. Here in the United States and around the world, monetary policy interest rates are more likely to be constrained by their effective lower-bound than in the past.

Let’s Decipher these Comments and Bring On the Tracking

The comments above, were understood by many/most on Wall Street to mean rates will be allowed to stay lower for longer and the 2% inflation rate is not a hard line number….

The following is the Trimmed Mean Inflation Rate completed by our very own Dallas Federal Reserve, just down the street from us!

It is basically taking the far outliers in any report out and calculating the number. This rate is one of the most watched inflation numbers by the FOMC!

Here are the actual numbers- watch that 2% number!

When rates go up, it is a headwind for Capital Markets …

Let’s keep a watchful eye on this… we are tracking you Mr. Trimmed Mean.

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Market Follow Up Comments From Early in Week … Friday of Long Weekend

On Monday, here during our August review, we warned that the markets had finally gotten too far ahead of themselves as investor became overzealous and somewhat dismissive of risk.

From the Post …

Gone Too Far

You know us to be very positive – all through the many negatives that have occurred !

You also know we will call it like we see it!

Markets have officially gone too far and are ahead of themselves, expect bumps and no extra risk taking is warranted at this time – CAREFUL!

It is very unlikely that the Markets just turn and fall like a knife, we are more concerned for the next three to six months or so … not three days later …

That being said, it does show that there is significant risks as those who were in “Fear” earlier in the year are now in “Fear of Missing Out” (FOMO)

Time will tell and this is not an exact science – but we are building some great content for our coming Newsletter as we type this … carefully building content as the fast paced markets have trashed several of our big Newsletter writings and made them old news as what we said “Could Happen” occurred before we could let you know…. All good!

Ahhhhh …. but today is a Friday heading into a much Welcomed long weekend…

Happy Labor Day!

Enjoy and be sure to spend time with those special… if you can safely!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

Cool Population Density Map … Office Hours End of the Week and Next

On a smack dab in the middle of the week, heading into a holiday shortened coming week … we thought it nice to keep it simple…

Population Density 3-D Chart

From our friends at Visual Capitalist, who continue to pump out some of the neatest charts ever…

Water is sure popular over the Globe ….

Warmth also seems a favorite too …

With Monday being a holiday, our office as well as Capital Markets will be closed… planning on being in and out (mostly the latter) Friday as well… always tethered electronically!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents

August 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale …

Hello and Welcome to our August 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

August – 2020 Video (YouTube)

Financial Planning Tip  –

Mysterious Form 5498

In a luckily timed post (two showed up in the mailbox the same day of the reminder) here we discussed the extra late arriving Form 5498.

This is a confusing settle up form that requires not action other that to add to your tax file in order to avoid unnecessary taxes!

Fraud Wire Delay Reminder

In this post we remind those setting up new Wire/Linking instructions to financial accounts, especially non liked titled accounts to be careful and have patience.

Fraudsters are attempting to take advantage of the situation!

Capital Market Comments

Gone Too Far

You know us to be very positive – all through the many negatives that have occurred !

You also know we will call it like we see it!

Markets have officially gone too far and are ahead of themselves, expect bumps and no extra risk taking is warranted at this time – CAREFUL!

Have a Great August Update!

Talk to you at the end of September!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Fraud Reminder When Wiring to NEW Linked Accounts … Friday!

One thing the lock down has done in our financial world …. many working remote and from a non-office location ?

Fraudsters are circling the boat!

Fraud Reminder When Wiring to New Linked Accounts

Financial institutions, present parties included … have been forced to take extra precautions when sending money … ESPECIALLY non like titled accounts – What?

A non-like titled account is any account that does not EXACTLY match your current account title – i.e. Seller of home, child, relative, entity such as LLC, Corporate/Business account, spouse with a different name –

Anything not exactly matching is going to take time to set up due to the Fraudsters sharking around !

Just be patient and certainly give yourself extra extra time to make the transaction…. much better safe than sorry!

Ahhhhhhh (that was an extra long one) today is a Friday – Have a Great Friday and SUPER weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

jkfinancialinc

street-cents