Yesterday, the White House rolled out the biggest tariffs in a century, sending markets into their worst decline since the pandemic. While headlines focus on supply chains and inflation, there are important economic stories you’re not hearing about.
During the first half of this month’s First Friday episode, we dig into what nobody’s talking about. And in the second half, we grapple with the headlines.
Student loan rules just changed again. The government added new limits to Public Service Loan Forgiveness. Right now, 9.2 million people — one in five borrowers — can’t keep up with payments. Many folks don’t even know payments started again after that four-and-a-half-year break.
S&P just dropped a new report that backs what smart money already knows: index funds crush actively managed funds 90 percent of the time. Even with all those tech stocks dominating the market, you still come out ahead with simple indexing.
You know who’s gobbling up the mortgage market? Rocket Companies. They just bought both Redfin and Mr. Cooper. They’ll handle one of every six mortgages in America. They’ve positioned themselves at every step of the homebuying journey — from when you search for homes on Redfin to financing and monthly payments for the next 30 years.
The White House just made a surprising move with Bitcoin. They’re setting up a Strategic Bitcoin Reserve to hold coins long-term. They’re also creating a separate stockpile for crypto they seize in legal cases. Pretty clear signal that Bitcoin stands apart from other cryptocurrencies.
In the second half, we dive into those significant new tariffs making headlines.
The S&P 500 dropped 4.8 percent on Thursday — we haven’t seen a drop like that since the pandemic. The new rules put at least a 10 percent tariff on everything coming into the country. Then come the “reciprocal” rates: 20 percent for European goods, 27 percent for items from India, and a combined 65 percent for Chinese imports.
We bring in Bob Elliott to make sense of this situation. His credentials are impressive — he spent 13 years at Bridgewater Associates (the world’s largest hedge fund), served as head of Ray Dalio’s investment team, and graduated magna cum laude from Harvard.
During the 2008 crisis, he directly advised the Treasury, Federal Reserve, and White House.
Bob offers a reality check about bringing back manufacturing jobs: you can’t build factories overnight. These investments take years, and companies hesitate to make 30-year commitments when policies change every few months.
Bob breaks down four economic forces all hitting at once: tariffs jacking up prices, government cutting spending, tax policies on hold, and the Fed moving like molasses. Put them together? Yikes. He doesn’t sugarcoat it — the short-term outlook looks “pretty negative.”
Category: The Economy
Why Neither Candidate Can Solve the U.S. Housing Crisis
Hey there!
Something fascinating happened in Argentina’s housing market.
What happened illustrates why the U.S. housing market is at such a critical turning point …
… and why the solutions proposed in the U.S. Presidential election might be missing the mark entirely.
In Buenos Aires, the supply of rental properties surged by […]
#546: The Surprising Economic Proposal Both Candidates Agree On
The Federal Reserve slashed interest rates by half a percentage point. What does this mean for your mortgage, your savings account, and the economy at large?
In this First Friday economic episode, we dive deep into the Fed’s decision. But that’s just the beginning.
As the presidential election looms, we’ll also unpack the economic proposals from both candidates, examining how their plans for housing, taxes, and more could shape your financial future.
We emphasize critical, non-partisan analysis of economic proposals. We want you to understand complex economic issues and their potential impacts, rather than advocating for specific political positions.
Here are more specifics about this episode:
The Federal Reserve’s decision to cut interest rates by half a percentage point – the first rate reduction since the pandemic – is the biggest economic story of the month.
We start by exploring the implications of the Federal Reserve’s rate cut, from falling mortgage and auto loan rates to potential increases in home prices and a tightening housing inventory. We also touch on the flip side: declining yields on high-interest savings accounts and CDs.
We unpack the reasoning behind the Fed’s decision, including shifting concerns from inflation to unemployment. We delve into economic indicators like the “dot plot” and “R-Star,” explaining their significance in predicting future interest rates and economic trends.
Then we discuss the latest jobs report, with 254,000 new jobs added in September, surpassing expectations. We break down the unemployment rate’s drop to 4.1 percent.
As the conversation shifts to the upcoming election, we take a nonpartisan approach to examining economic proposals from both presidential candidates.
The episode focuses on policy rather than politics, encouraging critical thinking about each proposal’s potential impacts.
One area of bipartisan agreement – a proposal for no tax on tips for service workers – is scrutinized. We explain why economists across the political spectrum view this idea skeptically, highlighting the lack of specificity in defining “service workers” and “tips.”
Housing policy takes center stage, with both candidates proposing regulatory streamlining for home construction and opening federal lands for development. We discuss the limitations of federal intervention in what are often local zoning and regulatory issues.
The episode also examines proposals for first-time homebuyer assistance, explaining how subsidizing demand in a supply-constrained market could potentially lead to higher housing prices.
Throughout the discussion, we emphasize the importance of evaluating these policies based on their potential economic impacts rather than political affiliations.
This episode will help you make more informed decisions about personal finances and policy preferences.
#528: The Stock Market is in Panic Mode and the Unemployment Rate Jumped – But Everything’s Fine
The Federal Reserve recently decided to hold interest rates steady, leading to significant shifts in the stock market. The Dow dropped over 850 points, and the NASDAQ entered correction territory, falling more than 10% from its peak.
But what do these numbers mean for you? We break down the latest jobs report, which shows a rise in unemployment to 4.3%, triggering a recession indicator known as the Sahm Rule. This isn’t just economic jargon; it affects real lives, impacting job security, investments, and financial planning.
We discuss potential ripple effects on various sectors, such as real estate, where interest rates influence housing affordability.
We also examine the technology sector’s volatility and how recent market corrections might influence tech stocks and the overall investment landscape.
Understanding this can help you make informed decisions about your investment portfolio.
Every First Friday of the month, we bring you our “First Friday Monthly Economic Report,” where we help you make sense of these trends.
We aim to make complex economic concepts accessible. Join us as we explore these pressing economic issues.
#525: Michael Kitces: Is the Economy Worse than We Think?
We chat with renowned financial advisor Michael Kitces at the Morningstar Investor Conference in Chicago.
Kitces answers a big question: Is the economy worse than we think? He explains that a few big companies like Nvidia, Meta, and Alphabet are holding up the S&P 500. But this doesn’t mean the economy is bad. It’s common […]
#514: Why the Latest Economic Report is a Rorschach Test
The S&P 500 hit a record high — and the GameStop guy is back, and he now owns 9 million shares of GME, making him the 4th largest shareholder.
Interest rates from remain the same, and are expected to hold steady until September. Inflation remains unchanged from last month.
Last month we saw a massive explosion of new jobs, at 272,000 — nearly 90,000 more than predicted. But we also saw unemployment tick up, which created mixed signals.
Learn the implications of the latest economic news — and how it impacts your wallet — in this month’s economic update.
Inflation, Illustrated
Hi there!
This post is an illustrated, pared-down version of my recent “Inflation, Explained” podcast episode.
It was created as a simple, easy-to-digest guide to help you understand the current inflationary environment in the US.
Ready? Let’s dive in!
What is inflation?
Simple definition: […]
