The reverberations from last week’s blockbuster US Nonfarm Payrolls number will continue this week. Despite the fact that there are many aspects of the data release showing the 353,000 net new jobs created in January (and the upward revisions in earlier months ) that don’t make sense— among other things, it is very odd that with that kind of job gain and no increase in labor force participation, the unemployment rate would not go down — financial markets quickly took it as an unquestioned truth. Hopes of a soft landing for the U.S. economy – a scenario where inflation eases without a sharp rise in unemployment – have supported markets in recent months. Last week, stocks were mixed, and bonds were up on the week. The Fed meeting was as expected in terms of holding the Fed funds rate steady and Powell being incrementally more hawkish. Powell recognizes cutting too soon risks a return of inflation, but cutting too late can trigger an economic downturn. On the wealth planning front, we discuss the importance of a Power of Attorney (POA) and which type would be applicable in different situations.
Click Here to Read the February 5, 2024, Economic Commentary
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