Fed's Outlook Crashed Markets | Stewardship Concepts Financial Advisors

Happy Friday, everyone! My wife (Jenny) and I cut our Christmas tree near 49° North. We plan to make it a tradition. If you want to save money and experience snow, it’s a great place. And it’s only $5—that’s some Christmas savings! Thank you for joining me today for two minutes on the economy, an interesting story, and a financial planning secret.

Economy – Fed’s Outlook Crashed Markets

The recent Fed meeting sent shockwaves through the stock market on Wednesday. The expected 0.25% cut happened, but the big surprise was their 2025 outlook. Their forecast halved from four rate cuts to only two in 2025. Their rationale is that they want to see more progress with inflation. Some economists believe this may be due to a fear of upcoming inflationary policies like tariffs. The Fed’s primary concern is inflation. The Fed said the labor market is cooling, but they’re unconcerned. As Spokane financial advisors, we consider a potential stock market pullback healthy and expected. There's a lot of overvaluation, and even though the market can continue to be overvalued, a correction would be helpful as a base for returns going forward. We remain diversified into quality and hedge on U.S. large-cap growth.

Interesting Story – Bitcoin is Back!

Bitcoin is experiencing a resurgence, recently surpassing $100,000 per coin. This recent comeback is due to increased adoption from corporations and financial institutions and increased sentiment from a pro-crypto government. For the uninitiated, Bitcoin is a decentralized digital currency independent of central banks that uses a network of computers to record transactions transparently. Launched in 2008 by the pseudonymous Satoshi Nakamoto, Bitcoin’s appeal lies in its secure, borderless, and inflation-resistant nature. Its return to the spotlight proves that the digital asset market is far from dead. Its future is uncertain and remains highly speculative for investors.

Financial Planning Secret – Use A High Yield Savings Account

Utilizing a high-yield savings account is one of the most straightforward tools to earn more on your cash. This hasn’t been a primary focus for the past decade because these high-yield accounts didn’t give much additional benefit with low interest rates. As rates have climbed, many banks have refused to pass those rates on to their customers. These “high-yield” savings accounts are now very attractive. We recommend that many of our clients store their emergency funds in a high-yield account and use their checking accounts as slush funds to receive income and make purchases. We recommend three banks with no fees: Wealthfront, Ally, and Cit Bank. If you search the internet to chase the high interest rate offered, you’ll find other banks with higher rates. However, some of these banks will lower the rates a few months after reaching their goal of attracting new money. Find a bank close to the highest rate that stays above average and stick with them.

Merry Christmas!

We have availability. If you know someone who can use our help, please share our website, where they can make a no-cost, no-commitment discovery call.