November 13, 2025 • 39 mins
Chuck Zodda and Mike Armstrong discuss Trump signing the spending bill and ending the government shutdown. Is another shutdown on the horizon? There is no inflation data to report today. What are experts saying about inflation right now? The IRS announces 2026 401(k) contributions and savings cap. Boston Fed President advocates holding rates steady. There is a new phone scam targeting utility bills.
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Episode Transcript
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Speaker 1 (00:01):
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(00:43):
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(01:06):
Zada and Mike Armstrong.
Speaker 2 (01:10):
Chuck, Mike and Tucker with you, and we kick things
off today with the expected news that the federal governments reopening,
President Trump signing the spending package into law late yesterday night.
And so the forty three day long shutdown it's over.
Speaker 3 (01:30):
What does it mean, Michael, Uh, Well, it means people
finally get paid, some people go back to work. Some
people have been working all the way through. It's funny.
I've been having over and over a couple of conversations
with people affected by the shutdown. One works in the
defense in one way or another. Another works at a
passport center, and I kind of would have thought that
(01:52):
the person working in defense would have been working this
whole time, but it was actually the opposite. Neither of
them were getting paid, but the person working at the
passport center was deemed critical and was working throughout the shutdown.
And I was just talking to it was actually the
father of the person at the passport center, and then
the individual and Defense, and he was kind of like, Yeah,
it's just seems kind of funny, right that you know
(02:13):
that one person got a forty day stressful vacation, but
time off. My daughter has been working this whole time,
and in either case, both of them are going to
be fully paid, neither of them receiving any extra pay.
But yeah, mely one hundreds of thousands of people back
to work and we expect payment within the next couple
of days. Other things will take a little bit longer, right,
(02:35):
I mean, the reshuffling of the deck when it comes
to air traffic control and flights getting back and scheduled
on time is going to take probably a week or so.
Snap benefits should be pretty quick, but not instantaneous, and
so every piece of the government takes a little bit
different amount of time to get back up and running.
Big thing.
Speaker 2 (02:54):
It seems like, based on everything I've read, it should
be that things are pretty much back to normal operation
that week of Thanksgiving.
Speaker 3 (03:03):
Is that the sense that you get, Mike easily? Yeah,
I think probably prior to But yeah, all I wouldn't
expect any significant government shutdown related travel delays by Thanksgiving.
Speaker 2 (03:17):
So some questions that you know, are our top of
mind when we look at, you know, the impact on
the broader economy. Number One, we are going to start
getting economic data coming out. We don't know the exact
schedule yet. We don't know the exact you know, releases
that we're going to see at any particular time, but
this will help to give us a little bit of
a clue as to Hey, what may have happened to
(03:38):
the economy during that month and a half shutdown. Was
there any meaningful impact or is it more similar to
prior shutdowns of shorter length where there wasn't any meaningful
impact and the economy continued on its very way. So
that's one thing that we're gonna be looking at.
Speaker 3 (03:54):
Interesting update on that front. I just saw a headline
come across the screen from Kevin Hasset, the director of
the National Economic Council. He said that we will be
getting an October jobs report, but it will not include
the job ash rate, meaning they probably got enough survey
data from businesses to determine how many people did you hire,
(04:15):
how many did you fire, but did not get enough
surveying of households done to be able to determine that
unemployment rate. So I wasn't sure we'd get a job
in October jobs report at all. Kevin Hasset saying, we
will get kind of half of a job's report. We'll
get something there.
Speaker 2 (04:29):
Yeah, So I think it'll be interesting to see what
we get on that front. Another question, Mike mentioned that, look,
the people that have been furloughed over the last month
and a half, they are going to be receiving back pay.
Questions on that, We saw a little bit of an
uptick in delinquency rates in a couple areas, subprime model loans,
credit cards.
Speaker 3 (04:47):
Both ticking up a little bit.
Speaker 2 (04:48):
Does this reverse some of that now that those people
can potentially make those payments or is that a trend
that's happening independently there, So that'll be something that we
look for along with that. Now that that back pay
has been provided, do we see any kind of upward
inflection in spending that happens.
Speaker 3 (05:08):
I don't know.
Speaker 2 (05:08):
I wouldn't necessarily expect it, because again, that back pay
is likely going to pay for purchases and things that
were made, you know, during that time on credit and
things like that.
Speaker 3 (05:17):
So I wouldn't expect a huge shift.
Speaker 2 (05:19):
But could there be a positive inflection from you know
the fact that you have folks that are going to
be paid now the counter to that, and again, I'm
just kind of throwing all these different things out there,
because these are the ways that you have to think
about that, Mike. Last time I checked, this is a
very short term spending bill that carries us through January thirtieth. Right,
(05:40):
we could be right back here in two and a
half months. I don't know that that will or will
not be the case. But do government workers who have
gone through this now say, Hey, if we might be
back here in a couple months, do they pull back
on spending over that time because they want to have
additional savings put aside in the instance that in the
(06:00):
case that we see another shutdown of similar length or longer.
Speaker 3 (06:04):
My guess is probably not, just because I see very
little evidence that American consumers generally are that forward thinking
and that financially disciplined. I don't have reason to suspect
that government workers are any better at that. But it's
an interesting possible theory what would be different, because there
would be some things that would be different if they
shut down again in January, because as part of this
(06:25):
bill they signed in funding for a few different programs
for over for a full year, which I tell January
shut down so complex and confused.
Speaker 2 (06:35):
It really feels like we're heading towards another one in
January because of this because they basically they passed authorization
to cover snap benefits for a full year, okay, regardless of.
Speaker 3 (06:46):
The shutdown, keep getting food stamps.
Speaker 2 (06:48):
And they passed authorization to pay the military in the
event of a future shutdown during that time. Oh then
why not, so like, doesn't it feel like you like,
which then raised the Republicans might shut it down in January,
which then raised the question, Okay, like, if you shut
down the federal government with those guardrails in place, what
are you really doing aside from like closing national parks.
Speaker 3 (07:11):
Yeah, well, I know there's more.
Speaker 2 (07:13):
Than that obviously, but like in terms of you know,
it's like okay.
Speaker 3 (07:18):
Yeah, you're once again shutting down air travel.
Speaker 2 (07:22):
Yes, so, but it's like it almost feels like you're
clearing the path to be like, yeah, we might shut this.
Speaker 3 (07:29):
Thing down again in January. Yeah, you know that way.
Speaker 2 (07:32):
So that's where things stand on all of this. Again, Historically,
government shutdowns have not resulted in any major impact of
the US economy. Historically, they've all been shorter than this.
So while my gut tells me that we didn't go
on long enough to cause any major problems, you never
know for sure until you start getting the data trickling
in over the next month or so, and so I
(07:54):
think we'll have a pretty good handle on that as
we get towards the end of the year and towards
the start of Anuary. But my gut says this didn't
go on long enough to cause any kind of major damage.
Speaker 3 (08:05):
I tend to agree.
Speaker 2 (08:07):
So that's where we stand as it relates to the
government shutdown. Anything else that you want to cover on
that front, Mic, No.
Speaker 3 (08:14):
I think the important piece to keep in mind is
they are setting things up for another possible shutdown in January.
It'll be contingent, really, I mean, the only thing that
seems to matter would be whether or not you get
this vote on subsidies for Obamacare plans. And I guess
that's one big change that I can say definitely exists
(08:36):
today compared to three months ago. How many times did
we talk about subsidies on Obamacare plans, even on this
a financial and personal finance and economic show. I can
think of few, maybe a handful ghost And I asked
other people that we know that have shows on different networks, like, hey,
did you ever talk about The answer is no, nobody
really had any sense of what this meant and how
(08:59):
many people if we're on it. There is a general
awareness now of how this works, and I think the
general cens from people is not terribly well. So will
we get that vote, what will it look like? That's
really going to define whether or not we get another
shutdown come January.
Speaker 2 (09:15):
I think to take a quick break here when we return,
we were supposed to get the October CPI report today.
Speaker 3 (09:23):
That's not going to happen.
Speaker 2 (09:25):
So we'll talk a little bit about what we have
seen from other inflation data, what kind of signs we
might be getting on what's happening with inflation, and the
absence of that report.
Speaker 3 (09:35):
We'll discuss that when we return.
Speaker 1 (09:37):
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Speaker 2 (11:07):
Mike this morning at eight thirty pm am Eastern time.
We received the October No Nothing report. We didn't get
the October CPI report, and again it's uncertain if slash
when we will. But that doesn't mean that, you know,
people aren't still paying attention to what's going on when
(11:28):
it comes to inflation. There's a piece in Barns today
discussing this and specifically, you know, it's titled there's no
inflation report today.
Speaker 3 (11:36):
But here's what the experts think. What do they think, Michael?
They think that inflation did pretty much what it has
done for the last few months, which is averaged somewhere
around three percent. I don't find any of the projections
about specific items to be terribly useful without the government's
own data, but yeah, core inflation expected to did rise
(11:56):
by three percent year of the year in September, expected
to maintain that pace in October as well. I think
some context around the story with inflation would be helpful, though, Chuck,
you know, I know we've talked about this before, but
the current state of inflation right now, we're hitting this
three percent number, and I want to kind of dig
in in terms of why we seem to be here
(12:19):
at the moment compared to previous years, in previous decades,
because I'd like to use the TV example over and
over again. But television, other electronics, these items that we
buy have generally gotten cheaper for the last twenty years,
or at least not gotten substantially more expensive. Right, Goods
inflation for the last several decades, mainly because non exist
(12:43):
of China and their massive manufacturing capacity and are willing
to have all that stuff made there in Korea and
other places too. But yeah, goods inflation hasn't existed. We're
getting some goods inflation now, and so that is, you know,
keeping our inflation rate at three percent, Why it's not
fifteen percent? Well, the terrafs themselves are not all that substantial.
(13:07):
We know we're sitting at like twelve to fifteen percent
average annual inflation.
Speaker 2 (13:12):
But and not everything we bought is tariff, so you
wouldn't you know, you wouldn't expect it.
Speaker 3 (13:17):
To range exactly that high. But it does I think
call into question for me at least. Right, the reason
that we had two ish percent inflation for the last
couple decades was because services inflation, people's wages, those working domestically,
we're getting wage increases and so airport, you know, whether
it's airline tickets or trips to Disney or hotels, got
(13:39):
a little bit more expensive over the last couple of decades,
but goods didn't, and in some cases got cheaper. And
so therefore we had an overall inflation scenario that was
pretty comfortable. We are reversing some of that trend. And
so I guess I'm what I'm trying to get at
here is should we expect that three percent is more
(14:00):
of a new normal going forward? Right? Should we anticipate
returning to the two percent to day? And I know
we never actually hit two percent, but you know, over
the course of the couple decades in the twentyands through
twenty twenty, we were around that two percent range, right, yeah, generally.
Speaker 2 (14:19):
And and so I think it's Look, it's it's an
important question to ask because if you look at the
tailwinds that led to inflation being where it's been for
the last forty years generally, aside from you know, twenty
twenty one through twenty five. Now, yeah, there are two
big ones, in my opinion, that are both reversing. The
(14:42):
first one, Mike, why if I am a company and
someone comes to me and says, hey, you can move
your manufacturing to China. The main reason they tell me
to do that is because it will be cheaper for
me to do so. Yes, Like no, one's like, hey,
come move your factory to China because you know it'll
(15:05):
be a longer trip for you know, your goods to
get to the store.
Speaker 3 (15:07):
Like no, that's it's not how it is. It's it's
not how it's sold. It's significantly cheaper to manufacture there.
So if we believe that we are in a world
where even some of that manufacturing, not all of it,
but some of it is coming back to the United
States or even countries near the United States that still
(15:28):
are not as cheap to manufacture in as China, then
one has to believe that that cost is going to
have to show up somewhere. And based on the fact
that corporate profit margins remain pretty darn good, the answer
is not that companies are just gonna eat that out
of the goodness of their heart. The second piece, as
(15:49):
it relates to lower inflation, is the main expense for
most businesses, and you know, again, it's it's rare to
find one where this is the case. The main expense
for most businesses is labor. Labor supply is currently not
growing at the pace that it's been growing for even
(16:09):
the last twenty years, which was slower than the previous
twenty years and so on. The two main reasons for
that are baby boomers retiring and not having enough gen
zers to replace them, and immigration, both legal and illegal
this year is down significantly. We don't know the exact
magnitude of that change, but we do know that immigration
is down, and so the labor force is potentially not
(16:33):
even growing this year. It might be flat when it's
all said and done. And so if you have less
labor but you still have the same demand for your
goods and stuff, well, that means that you probably have
to pay people more in order to do the work
that you in order to provide this And by the way,
(16:55):
I pulled up the CPI Report, which the CPI Report
is not the be all end all of these at
least gives us an idea of what we're seeing. Plus
we've had it for decades, so it's easy to compare
itself to Yeah, it's easy for us to look at this.
Speaker 2 (17:08):
So again, CPI all items running at three percent over
the last year, let's look at a few areas that
are very labor intensive. MIC when it comes to you know,
what goes into the product that's produced. Care of elderly
at home. Would you say that that's a high labor
intensive job. Yeah, that price is up eleven point six
(17:29):
percent year over year.
Speaker 3 (17:30):
How about childcare? Do we have that one broken out?
Hang on?
Speaker 2 (17:32):
I have other ones here. Gardening and lawn care services.
Would you say that that has a high labor component
to it? Still is Yeah, up thirteen point nine percent
year over year. Garbage and trash collection, would you say
that that involves a lot of labor?
Speaker 3 (17:44):
Still does yep?
Speaker 2 (17:45):
Up five point four percent year over year. Let's see,
hang on, you want a childcare, Yeah, if you've got it.
Let's see, Uh, this is where is daycare? And preschool?
Up five point two percent year over year. So these
areas that are again very labor focused, tend to be
(18:11):
high postage delivery services. Would you say there's a high
labor component to that, Yeah, eight percent up year over year.
So the areas that are primarily labor focused in terms
of what they have to deliver, whether it's services or goods,
those are running at a pretty steep clip as well.
And so that's something where even if the tariffs side,
(18:33):
let's say that, you know, a month and a half
from now, a bunch of tariffs get struck down, and
let's say that, for whatever reason, the Trump administration might say, Okay, look,
we're not going to you know, find another way to
impose these I'm not saying they will or won't do that,
but let's say the tariffs are no longer a thing
heading into next year, the labor side of the equation
still is, and that can potentially still have an impact
(18:56):
along with the push for deglobalization.
Speaker 3 (18:59):
And so as I look at this, I think we
have to be aware that.
Speaker 2 (19:03):
Hey, the next forty years, do I think that inflation
on average is going to run higher or lower than
the previous forty I'm taking the over.
Speaker 3 (19:13):
Yeah, if you buy the deglobalization story, then I don't
know how you don't. I suppose if automation takes a real,
you know, firm grasp here over the next couple decades,
that could reverse it. But yeah, I think to your point,
if you're expecting a repeat of the last two decades,
(19:34):
get don't with the story. Don't don't expect that because
the last two decades were just defined by a roaring
stock market with a couple of big crises in between,
and an inflation story that was very muted. And it's
pretty tough for me to see a repeat of both
of those scenarios over the next two decades. Let's take
a quick break.
Speaker 2 (19:54):
When we come back, we got Wall Street Watch, and
we got new four oh one K contribution limits for
twenty set twenty six.
Speaker 3 (20:01):
I'll tell you all about that when we return.
Speaker 1 (20:11):
Liked us on Facebook and follow us on Twitter. Act
TFE show Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch. A complete look at what's moving market so
far today, right here on the Financial Exchange Radio Network.
Speaker 5 (20:30):
Well, the longest government shutdown in US history has come
to an end. In markets our negative territory, with the
tech sector selling off right now. The Dow is down
just over a third of a percent, or one hundred
and sixty three points, SMP five hundred down about three
quarters of a percent, Nasdaq selling off one in a
(20:51):
quarter percent or two hundred and ninety six points, RUSTED
two thousands down over eight tenths of a percent, ten
Your Treasure reeled up two basis points at four zo
point one zero six percent, and crude oil up about
one percent. Hire today trading just above fifty nine dollars
a barrel. Cisco's stock is popping nearly five percent today
(21:11):
after the network equipment company lifted its earnings outlook, driven
by demand for artificial intelligence products. Meanwhile, Disney offered mixed
quarterly results, where it beat earnings expectations but fell short
of revenue forecasts. The media in entertainment giants, TV networks
and movie business declined, offsetting gains in parks and streaming.
(21:33):
Disney stock is falling almost eight percent. Elsewhere, betting operator
and fandual parent company Flutter Entertainment cut its annual outlook.
The company also said it plans to launch a sports
prediction market platform next month, partnering with CME. Fletter shares
are dropping about eleven percent. Firefly Aerospace shares are soaring
(21:57):
seventeen percent after it posted strong third quarter results. Nike
upgraded by Wells Fargo to overweight from equal weight, with
a bank set it's profit and loss figures could be
hitting a bottom. Nike up by over one percent and
after today's closing bell, we'll see earnings from chip making,
equipment maker, Applied Materials. I'm Tucker Silva, and that is
(22:19):
Wall Street Watch.
Speaker 3 (22:20):
I love the irony in Nike being upgraded to overweight.
They make double excel sizes, all right, they do, but
it's like it's just something where like you think of
the company and you're like, it's just kind of you know,
it's it's humorous.
Speaker 2 (22:37):
Let's talk a little bit about new contributional limits for
twenty twenty six. I don't know if this is just
because we're like fresh off the shutdown, or if this
was the day that this was gonna be released anyways,
but the IRS gave us the data for contribution limits
for retirement accounts for next year. So for one ks
(22:57):
there's a little complicated, so you're gonna have to, you know,
maybe write this down. If you're not driving four to
one ks. You get to contribute twenty four thousand, five
hundred dollars next year. That's up a thousand from this year. Okay,
that's easy enough. People fifty and older, the bonut, the
extra contribution, what's it called the ketchup ketchup, that's the
(23:19):
one ketchup contribution is gonna be eight thousand extra next year,
up from seventy five hundred this year, So that gets
you a total of thirty two thousand, five hundred. But
then you got the super Ketchup contribution if your age
sixty to sixty three next year, and that gives you
an extra contribution that you can contribute a total of
thirty five seven fifty two. So it's an extra thirty
(23:40):
two hundred and fifty dollars that you can contribute also
next year. And this one is exciting to me. I
do have to say, Uh, the Ketchup contribution for iras
is gonna be eleven hundred dollars next year instead of
one thousand. The inflation adjustment for IRA ketchups is now
able to be index in one hundred dollars increments instead
(24:01):
of five hundred, so you're gonna see those happening more
often that that Ketchup gets bumped up on iras, which
I think is long overdue. And this is you know,
still ignoring the problem of Hey, if your employer has
a retirement planned, you can contribute you know, thirty thousand,
but if you have to do your own, it's significantly less.
But that's neither here.
Speaker 3 (24:20):
North there agreed, and that scenario is becoming a lot
less common. It has become a lot easier to start
a four oh one K. You know, a decade ago,
I would meet with people that work for a company
with fewer than ten employees. None of them would have
a four oh one K. These days a lot of
them do, so that's becoming less of an issue. But
I still think it's preposterous. Uh, let's see what anybody
(24:42):
else just focused on the condiment catchup right now?
Speaker 5 (24:46):
Whenever you guys say ketchup contributions, that's literally all I
think about.
Speaker 3 (24:49):
I know I'm not actually in favor of corporate sponsorships
of government programs, but don't you think the ketchup contribution
should be brought to you by Hines? Yeah? Just see
like that.
Speaker 2 (25:00):
I mean, look like like you've got your wroth for
a one k, why can't you have your hines for
a one k?
Speaker 3 (25:04):
Also, yeah, I like that idea. The trickier party you
got your Goulden's four fifty seven. So the other tricky
part of all of this is the contributions by your
employer for certain people. So this took a while to
actually get into effect because four to one K providers
(25:24):
were like, hey, Congress, pump the brakes. This is complicated,
We're not sure if we can do it. But in
twenty twenty six, if you earned more than one hundred
and fifty thousand dollars in twenty twenty five, then your
ketchup dollars must go into a WROTH for a one
K account.
Speaker 2 (25:43):
And in twenty twenty six, higher innershes employers don't offer
a WROTH for a one K won't be able to
make ketchup contributions.
Speaker 3 (25:51):
And the good news what if I'm a new employee
who is making more than one hundred and fifty grand
in twenty twenty six, but they don't have my earnings
record for I don't understand some of this stuff.
Speaker 2 (26:03):
I don't know, but what I what I do know
is that the number of plans that don't offer a
WROTH component now has dwindled. In twenty twenty, seventy four
percent of four to one K plans offered by Vanguard
at least, so this is Vanguard, it's not across the board.
Seventy four percent of Vanguard four to one k's in
(26:24):
twenty twenty offered WROTH options eighty six percent of them
offered it last year. I would imagine giving the impetus
on this, you're probably getting north of ninety percent for
next year. But there still could be some gaps in there.
Speaker 3 (26:38):
I'll tell you the this has all been about, you know,
how much to contribute, how much the limits are, and
that is an interesting component of all this. But I
don't know about you, Chuck. I was speaking with somebody yesterday,
so this is just kind of fresh in my mind
at the moment. They weren't at all confused about how
much to contribute. The answer for them was, I've got
two kids. You know, I'm gonna contribute whatever I can,
(27:01):
but ultimately, I got to pay the bills, and so
I know, to contribute as much as I can afford
while still being able to pay the bills and not
getting caught into a spiral of debt. The more difficult
question for this person was what should I be contributing
to traditional versus ROTH like. That is not a very
(27:22):
commonly understood formula to go about it, and there's a
few different components to it, you know. One is how
much do you think your earnings are going to grow
over time? How much might your deduction shrink over time.
Where are your current assets already lined up?
Speaker 1 (27:37):
Like?
Speaker 3 (27:37):
Those are complicated questions to begin with, not to mention, Hey,
you know, I just need some extra cash flow, So
how am I best served if I am in a
you know, if I'm pinching pennies right now because I
got two kids that are playing sports or heading to
college next year, and I need to pay for daycare
and you know, new car insurance for my sixteen year old.
Who's going to be on the insurance? Now, what's my
(27:59):
best option? And so these types of questions around retirement plans,
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(28:20):
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Speaker 3 (29:14):
Mike, do you like ducks uh in to eat? Yes?
One of my favorite? You eat multiple ducks? No?
Speaker 2 (29:24):
No, no.
Speaker 3 (29:26):
The reason I asked J Powell I think is a
big duck fan.
Speaker 5 (29:29):
Where the hell are you going with this?
Speaker 3 (29:31):
I'm waiting for the payoff here. Yeah, Okay, Jay's got
his ducks in a row. Is where I'm going with this?
You got it.
Speaker 2 (29:38):
There's been a parade of fed speakers this week, and
each and every one of them is in lockstep in
talking about this December meeting the same way, basically saying,
basically saying, yeah, I'm not sure if we're going to
get there as far as a cut. And what this
has the FED Fund's futures market doing is we're now
(30:00):
at a point where it's basically a fifty to fifty
coin toss as to what the market thinks the Fed
is going to do in December. Now, I said yesterday
and Mike, I'm interested to get your thoughts on this.
I have two conflicting views I think on this meeting.
Speaker 3 (30:14):
Okay. The first is given the.
Speaker 2 (30:17):
Lack of new economic data, and given the fact that
supplemental labor market data ADP paychecks indeed is all continuing
to show a weakening labor market, given that the Fed
already cut in September and October, I don't think there's
anything out there that suggests they shouldn't cut in December.
(30:40):
I tend to agree, like, if you've already started down
this path, yeah, there's nothing that would change your mind
in my opinion.
Speaker 3 (30:46):
Yeah, there's been no data release that would make you
do so. The counter to this And here's the other piece.
Speaker 2 (30:54):
When we talk about monetary policy errors, they're rarely because
you went not rarely, they are never because you went
a quarter percent in one direction too far. Sure, it's
usually because it's like, hey, we started cutting and we
should have hiked, or hey we hiked a quarter percent,
we should have hiked five percent twenty twenty two. Like
it's it's those kinds of things. So the place that
(31:15):
I also end up in, though, is well, since September
of last year, the FED is now cut by one
and a half percent one hundred and fifty bases points,
and the housing market is objectively worse today than it
was a year ago. Maybe they're pushing on a string
and additional cuts aren't going to do anything unless you
(31:35):
get to a point where you're like, hey, we got
to take FED funds right down to like one percent,
in which case there's a real problem in the economy.
Speaker 3 (31:41):
Yeah, you may be right there, it might not be
doing anything. I'm not sure that inaction is the right
policy in that case. But I do take your point,
and you say they've got their ducks in the row. Obviously,
I don't think we're gonna hear this type of rhetoric
from the likes of Stephen Meyron. I don't think we'll
hear it from though he came out and said he
wanted a half percent in Yeah, like Chris Waller isn't
gonna come out and say, oh, yeah, we need to
(32:03):
we need to be cautious and we don't need to
cut rates right now. Those two at least have been
firmly in the camp of more rate cuts. But yeah,
generally speaking, otherwise, I don't know if they're giving a
signal of we're not cutting as much as they are
trying to just hold their cards close to the vest.
Speaker 2 (32:19):
But what's the point in doing that, right Like when
when is the Fed ever wanted to like keep strategic
ambiguity out there.
Speaker 3 (32:32):
It's been a while, you know.
Speaker 2 (32:34):
It's like generally you kind of know what they want
to do in advance, and so when they're talking about
it this way, my answer is that.
Speaker 3 (32:41):
You have no They have no idea what's going on
in the economy. They mean that they're My only seeming
answer is they're genuinely confused about the current state of things.
Speaker 2 (32:50):
Look, I know that they haven't gotten their data releases
on schedule, like all of us, and that makes us cranky.
Speaker 3 (32:56):
But grow a pair and make a decision.
Speaker 2 (32:59):
This this is the job you've chosen, you know, like, no,
no one made you become you know, the the president
of the whatever fed or the on the board of governors,
like you chose to do this. And so given that
that's the case, you don't just get to like pack
it in when you don't get a couple of you know,
government data reports and be like, well, I don't know
(33:20):
what to do. No, I don't think that's what they're doing.
I think they're setting the stage for potentially not cutting
in December. I think that's really where they're going. Do.
Speaker 3 (33:30):
I think that's the right move.
Speaker 2 (33:32):
Quite honestly, I don't think it matters either way, because
one rate cut or not is not going to make
or break the economy. It's the trend and the shape,
and and that's what matters. I think that it's unusual,
in my mind, given that the economic data has continued,
you know, to come out matching their concerns that they
already had. Why would they change now that that's the
(33:54):
piece that's interesting to me. But I guess we'll just
have to wait and see. S Take a quick break.
When we return, let's see, we'll talk a little bit
about housing. Actually, no, I want to deal with this
new utility scam. Let's talk about that when we return.
Speaker 1 (34:12):
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Speaker 2 (35:11):
All Right, got a new scam that is floating around
out there, This one in relation to utilities detailed by
the Boston Globe. Boston City resident decided to switch their
electricity supplier. The city of Boston allows you to do this.
Most the state of Massachusetts has a whole website that
you know, you can search for different suppliers. Distributors are
(35:33):
generally not ones that you can switch between, because the
actual infrastructure to deliver the electricity is you know, limited.
There's not two sets of telephone polls, is the example
I'll give. So this guy basically signed up to switch,
and a couple days later got basically tag teamed by
like a couple of scammers pretending to be his original
(35:54):
supplier and the new one that he had switched to.
And long story short, he ended up going out and
purchasing nine hundred dollars in gift cards in order to
try to stop this shutdown of his electricity that these
scammers said they were going to be doing so big
(36:14):
things that I continue to come back to.
Speaker 3 (36:16):
Number one.
Speaker 2 (36:17):
There is no merchant, no tax collecting agency, no government official,
no anyone who legitimately would tell you to take payments
in gift cards. Yeah, and so number one. Number two,
if someone calls you saying that you owe them money,
(36:42):
the polite thing to do is to say, thank you,
I appreciate you telling me that I'm going I'm busy
right now, but I'll give you a call back hang up,
and then go and find the actual callback number. Four
the institution that said that they called. It can be
on you know, a website for a city or a company.
It can be on a piece of correspondent that you
have in your house. But do not call back the
(37:02):
same number that just called you, because it may or
may not be legitimate. Find the contact number from somewhere.
Speaker 5 (37:10):
Do you know.
Speaker 3 (37:11):
That's another thing that a legitimate debt collector will do,
will or will not will what. They'll send you a letter? Yeah,
and they know where you live, right so like they
do if you legitimately have a debt outstanding, it's a
very reasonable quest to say, understood, please send me a
letter in the mail so I can review it. A
(37:31):
stammer won't.
Speaker 2 (37:32):
There's basically never anything where you need to pay someone
right that minute, because that's just.
Speaker 3 (37:39):
Not how it works. And it's getting increasingly difficult for
me to not victim blame on this, and I really
try not to, and I understand how this happens, and
I understand, especially with vulnerable adults, how this happens. Might
trust me. I get confused about this stuff sometimes too.
I I do too. There's a time second. The second
(37:59):
you find yourself walking to a CVS to buy gift cards,
that alarm bell has to go off. And if you
can legitimately ask yourself, if you legitimately tell yourself that
that wouldn't go off for you, then you need to
give up control of your finances.
Speaker 2 (38:12):
I do think that that might be, you know, accurate,
But like I can tell you, like I've had instances
in the last month or two where I'm sitting there
and I'm like, is this legit or not? And I'm
even when I make a final decision, I might not
be completely sure.
Speaker 3 (38:27):
Yep, you know. So it's the other place that's full
of scams. Anything on Facebook, marketplace, if you're listing something,
if you're buying something, be especially concerned about it. Yeah,
just take a quick break. Hour two coming up on
the financial exchange. Just the bit
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Speaker 2 (01:10):
Chuck, Mike and Tucker with you, and we kick things
off today with the expected news that the federal governments reopening,
President Trump signing the spending package into law late yesterday night.
And so the forty three day long shutdown it's over.
Speaker 3 (01:30):
What does it mean, Michael, Uh, Well, it means people
finally get paid, some people go back to work. Some
people have been working all the way through. It's funny.
I've been having over and over a couple of conversations
with people affected by the shutdown. One works in the
defense in one way or another. Another works at a
passport center, and I kind of would have thought that
(01:52):
the person working in defense would have been working this
whole time, but it was actually the opposite. Neither of
them were getting paid, but the person working at the
passport center was deemed critical and was working throughout the shutdown.
And I was just talking to it was actually the
father of the person at the passport center, and then
the individual and Defense, and he was kind of like, Yeah,
it's just seems kind of funny, right that you know
(02:13):
that one person got a forty day stressful vacation, but
time off. My daughter has been working this whole time,
and in either case, both of them are going to
be fully paid, neither of them receiving any extra pay.
But yeah, mely one hundreds of thousands of people back
to work and we expect payment within the next couple
of days. Other things will take a little bit longer, right,
(02:35):
I mean, the reshuffling of the deck when it comes
to air traffic control and flights getting back and scheduled
on time is going to take probably a week or so.
Snap benefits should be pretty quick, but not instantaneous, and
so every piece of the government takes a little bit
different amount of time to get back up and running.
Big thing.
Speaker 2 (02:54):
It seems like, based on everything I've read, it should
be that things are pretty much back to normal operation
that week of Thanksgiving.
Speaker 3 (03:03):
Is that the sense that you get, Mike easily? Yeah,
I think probably prior to But yeah, all I wouldn't
expect any significant government shutdown related travel delays by Thanksgiving.
Speaker 2 (03:17):
So some questions that you know, are our top of
mind when we look at, you know, the impact on
the broader economy. Number One, we are going to start
getting economic data coming out. We don't know the exact
schedule yet. We don't know the exact you know, releases
that we're going to see at any particular time, but
this will help to give us a little bit of
a clue as to Hey, what may have happened to
(03:38):
the economy during that month and a half shutdown. Was
there any meaningful impact or is it more similar to
prior shutdowns of shorter length where there wasn't any meaningful
impact and the economy continued on its very way. So
that's one thing that we're gonna be looking at.
Speaker 3 (03:54):
Interesting update on that front. I just saw a headline
come across the screen from Kevin Hasset, the director of
the National Economic Council. He said that we will be
getting an October jobs report, but it will not include
the job ash rate, meaning they probably got enough survey
data from businesses to determine how many people did you hire,
(04:15):
how many did you fire, but did not get enough
surveying of households done to be able to determine that
unemployment rate. So I wasn't sure we'd get a job
in October jobs report at all. Kevin Hasset saying, we
will get kind of half of a job's report. We'll
get something there.
Speaker 2 (04:29):
Yeah, So I think it'll be interesting to see what
we get on that front. Another question, Mike mentioned that, look,
the people that have been furloughed over the last month
and a half, they are going to be receiving back pay.
Questions on that, We saw a little bit of an
uptick in delinquency rates in a couple areas, subprime model loans,
credit cards.
Speaker 3 (04:47):
Both ticking up a little bit.
Speaker 2 (04:48):
Does this reverse some of that now that those people
can potentially make those payments or is that a trend
that's happening independently there, So that'll be something that we
look for along with that. Now that that back pay
has been provided, do we see any kind of upward
inflection in spending that happens.
Speaker 3 (05:08):
I don't know.
Speaker 2 (05:08):
I wouldn't necessarily expect it, because again, that back pay
is likely going to pay for purchases and things that
were made, you know, during that time on credit and
things like that.
Speaker 3 (05:17):
So I wouldn't expect a huge shift.
Speaker 2 (05:19):
But could there be a positive inflection from you know
the fact that you have folks that are going to
be paid now the counter to that, and again, I'm
just kind of throwing all these different things out there,
because these are the ways that you have to think
about that, Mike. Last time I checked, this is a
very short term spending bill that carries us through January thirtieth. Right,
(05:40):
we could be right back here in two and a
half months. I don't know that that will or will
not be the case. But do government workers who have
gone through this now say, Hey, if we might be
back here in a couple months, do they pull back
on spending over that time because they want to have
additional savings put aside in the instance that in the
(06:00):
case that we see another shutdown of similar length or longer.
Speaker 3 (06:04):
My guess is probably not, just because I see very
little evidence that American consumers generally are that forward thinking
and that financially disciplined. I don't have reason to suspect
that government workers are any better at that. But it's
an interesting possible theory what would be different, because there
would be some things that would be different if they
shut down again in January, because as part of this
(06:25):
bill they signed in funding for a few different programs
for over for a full year, which I tell January
shut down so complex and confused.
Speaker 2 (06:35):
It really feels like we're heading towards another one in
January because of this because they basically they passed authorization
to cover snap benefits for a full year, okay, regardless of.
Speaker 3 (06:46):
The shutdown, keep getting food stamps.
Speaker 2 (06:48):
And they passed authorization to pay the military in the
event of a future shutdown during that time. Oh then
why not, so like, doesn't it feel like you like,
which then raised the Republicans might shut it down in January,
which then raised the question, Okay, like, if you shut
down the federal government with those guardrails in place, what
are you really doing aside from like closing national parks.
Speaker 3 (07:11):
Yeah, well, I know there's more.
Speaker 2 (07:13):
Than that obviously, but like in terms of you know,
it's like okay.
Speaker 3 (07:18):
Yeah, you're once again shutting down air travel.
Speaker 2 (07:22):
Yes, so, but it's like it almost feels like you're
clearing the path to be like, yeah, we might shut this.
Speaker 3 (07:29):
Thing down again in January. Yeah, you know that way.
Speaker 2 (07:32):
So that's where things stand on all of this. Again, Historically,
government shutdowns have not resulted in any major impact of
the US economy. Historically, they've all been shorter than this.
So while my gut tells me that we didn't go
on long enough to cause any major problems, you never
know for sure until you start getting the data trickling
in over the next month or so, and so I
(07:54):
think we'll have a pretty good handle on that as
we get towards the end of the year and towards
the start of Anuary. But my gut says this didn't
go on long enough to cause any kind of major damage.
Speaker 3 (08:05):
I tend to agree.
Speaker 2 (08:07):
So that's where we stand as it relates to the
government shutdown. Anything else that you want to cover on
that front, Mic, No.
Speaker 3 (08:14):
I think the important piece to keep in mind is
they are setting things up for another possible shutdown in January.
It'll be contingent, really, I mean, the only thing that
seems to matter would be whether or not you get
this vote on subsidies for Obamacare plans. And I guess
that's one big change that I can say definitely exists
(08:36):
today compared to three months ago. How many times did
we talk about subsidies on Obamacare plans, even on this
a financial and personal finance and economic show. I can
think of few, maybe a handful ghost And I asked
other people that we know that have shows on different networks, like, hey,
did you ever talk about The answer is no, nobody
really had any sense of what this meant and how
(08:59):
many people if we're on it. There is a general
awareness now of how this works, and I think the
general cens from people is not terribly well. So will
we get that vote, what will it look like? That's
really going to define whether or not we get another
shutdown come January.
Speaker 2 (09:15):
I think to take a quick break here when we return,
we were supposed to get the October CPI report today.
Speaker 3 (09:23):
That's not going to happen.
Speaker 2 (09:25):
So we'll talk a little bit about what we have
seen from other inflation data, what kind of signs we
might be getting on what's happening with inflation, and the
absence of that report.
Speaker 3 (09:35):
We'll discuss that when we return.
Speaker 1 (09:37):
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Speaker 2 (11:07):
Mike this morning at eight thirty pm am Eastern time.
We received the October No Nothing report. We didn't get
the October CPI report, and again it's uncertain if slash
when we will. But that doesn't mean that, you know,
people aren't still paying attention to what's going on when
(11:28):
it comes to inflation. There's a piece in Barns today
discussing this and specifically, you know, it's titled there's no
inflation report today.
Speaker 3 (11:36):
But here's what the experts think. What do they think, Michael?
They think that inflation did pretty much what it has
done for the last few months, which is averaged somewhere
around three percent. I don't find any of the projections
about specific items to be terribly useful without the government's
own data, but yeah, core inflation expected to did rise
(11:56):
by three percent year of the year in September, expected
to maintain that pace in October as well. I think
some context around the story with inflation would be helpful, though, Chuck,
you know, I know we've talked about this before, but
the current state of inflation right now, we're hitting this
three percent number, and I want to kind of dig
in in terms of why we seem to be here
(12:19):
at the moment compared to previous years, in previous decades,
because I'd like to use the TV example over and
over again. But television, other electronics, these items that we
buy have generally gotten cheaper for the last twenty years,
or at least not gotten substantially more expensive. Right, Goods
inflation for the last several decades, mainly because non exist
(12:43):
of China and their massive manufacturing capacity and are willing
to have all that stuff made there in Korea and
other places too. But yeah, goods inflation hasn't existed. We're
getting some goods inflation now, and so that is, you know,
keeping our inflation rate at three percent, Why it's not
fifteen percent? Well, the terrafs themselves are not all that substantial.
(13:07):
We know we're sitting at like twelve to fifteen percent
average annual inflation.
Speaker 2 (13:12):
But and not everything we bought is tariff, so you
wouldn't you know, you wouldn't expect it.
Speaker 3 (13:17):
To range exactly that high. But it does I think
call into question for me at least. Right, the reason
that we had two ish percent inflation for the last
couple decades was because services inflation, people's wages, those working domestically,
we're getting wage increases and so airport, you know, whether
it's airline tickets or trips to Disney or hotels, got
(13:39):
a little bit more expensive over the last couple of decades,
but goods didn't, and in some cases got cheaper. And
so therefore we had an overall inflation scenario that was
pretty comfortable. We are reversing some of that trend. And
so I guess I'm what I'm trying to get at
here is should we expect that three percent is more
(14:00):
of a new normal going forward? Right? Should we anticipate
returning to the two percent to day? And I know
we never actually hit two percent, but you know, over
the course of the couple decades in the twentyands through
twenty twenty, we were around that two percent range, right, yeah, generally.
Speaker 2 (14:19):
And and so I think it's Look, it's it's an
important question to ask because if you look at the
tailwinds that led to inflation being where it's been for
the last forty years generally, aside from you know, twenty
twenty one through twenty five. Now, yeah, there are two
big ones, in my opinion, that are both reversing. The
(14:42):
first one, Mike, why if I am a company and
someone comes to me and says, hey, you can move
your manufacturing to China. The main reason they tell me
to do that is because it will be cheaper for
me to do so. Yes, Like no, one's like, hey,
come move your factory to China because you know it'll
(15:05):
be a longer trip for you know, your goods to
get to the store.
Speaker 3 (15:07):
Like no, that's it's not how it is. It's it's
not how it's sold. It's significantly cheaper to manufacture there.
So if we believe that we are in a world
where even some of that manufacturing, not all of it,
but some of it is coming back to the United
States or even countries near the United States that still
(15:28):
are not as cheap to manufacture in as China, then
one has to believe that that cost is going to
have to show up somewhere. And based on the fact
that corporate profit margins remain pretty darn good, the answer
is not that companies are just gonna eat that out
of the goodness of their heart. The second piece, as
(15:49):
it relates to lower inflation, is the main expense for
most businesses, and you know, again, it's it's rare to
find one where this is the case. The main expense
for most businesses is labor. Labor supply is currently not
growing at the pace that it's been growing for even
(16:09):
the last twenty years, which was slower than the previous
twenty years and so on. The two main reasons for
that are baby boomers retiring and not having enough gen
zers to replace them, and immigration, both legal and illegal
this year is down significantly. We don't know the exact
magnitude of that change, but we do know that immigration
is down, and so the labor force is potentially not
(16:33):
even growing this year. It might be flat when it's
all said and done. And so if you have less
labor but you still have the same demand for your
goods and stuff, well, that means that you probably have
to pay people more in order to do the work
that you in order to provide this And by the way,
(16:55):
I pulled up the CPI Report, which the CPI Report
is not the be all end all of these at
least gives us an idea of what we're seeing. Plus
we've had it for decades, so it's easy to compare
itself to Yeah, it's easy for us to look at this.
Speaker 2 (17:08):
So again, CPI all items running at three percent over
the last year, let's look at a few areas that
are very labor intensive. MIC when it comes to you know,
what goes into the product that's produced. Care of elderly
at home. Would you say that that's a high labor
intensive job. Yeah, that price is up eleven point six
(17:29):
percent year over year.
Speaker 3 (17:30):
How about childcare? Do we have that one broken out?
Hang on?
Speaker 2 (17:32):
I have other ones here. Gardening and lawn care services.
Would you say that that has a high labor component
to it? Still is Yeah, up thirteen point nine percent
year over year. Garbage and trash collection, would you say
that that involves a lot of labor?
Speaker 3 (17:44):
Still does yep?
Speaker 2 (17:45):
Up five point four percent year over year. Let's see,
hang on, you want a childcare, Yeah, if you've got it.
Let's see, Uh, this is where is daycare? And preschool?
Up five point two percent year over year. So these
areas that are again very labor focused, tend to be
(18:11):
high postage delivery services. Would you say there's a high
labor component to that, Yeah, eight percent up year over year.
So the areas that are primarily labor focused in terms
of what they have to deliver, whether it's services or goods,
those are running at a pretty steep clip as well.
And so that's something where even if the tariffs side,
(18:33):
let's say that, you know, a month and a half
from now, a bunch of tariffs get struck down, and
let's say that, for whatever reason, the Trump administration might say, Okay, look,
we're not going to you know, find another way to
impose these I'm not saying they will or won't do that,
but let's say the tariffs are no longer a thing
heading into next year, the labor side of the equation
still is, and that can potentially still have an impact
(18:56):
along with the push for deglobalization.
Speaker 3 (18:59):
And so as I look at this, I think we
have to be aware that.
Speaker 2 (19:03):
Hey, the next forty years, do I think that inflation
on average is going to run higher or lower than
the previous forty I'm taking the over.
Speaker 3 (19:13):
Yeah, if you buy the deglobalization story, then I don't
know how you don't. I suppose if automation takes a real,
you know, firm grasp here over the next couple decades,
that could reverse it. But yeah, I think to your point,
if you're expecting a repeat of the last two decades,
(19:34):
get don't with the story. Don't don't expect that because
the last two decades were just defined by a roaring
stock market with a couple of big crises in between,
and an inflation story that was very muted. And it's
pretty tough for me to see a repeat of both
of those scenarios over the next two decades. Let's take
a quick break.
Speaker 2 (19:54):
When we come back, we got Wall Street Watch, and
we got new four oh one K contribution limits for
twenty set twenty six.
Speaker 3 (20:01):
I'll tell you all about that when we return.
Speaker 1 (20:11):
Liked us on Facebook and follow us on Twitter. Act
TFE show Breaking business news is always first right here
on the Financial Exchange Radio Network. Time now for Wall
Street Watch. A complete look at what's moving market so
far today, right here on the Financial Exchange Radio Network.
Speaker 5 (20:30):
Well, the longest government shutdown in US history has come
to an end. In markets our negative territory, with the
tech sector selling off right now. The Dow is down
just over a third of a percent, or one hundred
and sixty three points, SMP five hundred down about three
quarters of a percent, Nasdaq selling off one in a
(20:51):
quarter percent or two hundred and ninety six points, RUSTED
two thousands down over eight tenths of a percent, ten
Your Treasure reeled up two basis points at four zo
point one zero six percent, and crude oil up about
one percent. Hire today trading just above fifty nine dollars
a barrel. Cisco's stock is popping nearly five percent today
(21:11):
after the network equipment company lifted its earnings outlook, driven
by demand for artificial intelligence products. Meanwhile, Disney offered mixed
quarterly results, where it beat earnings expectations but fell short
of revenue forecasts. The media in entertainment giants, TV networks
and movie business declined, offsetting gains in parks and streaming.
(21:33):
Disney stock is falling almost eight percent. Elsewhere, betting operator
and fandual parent company Flutter Entertainment cut its annual outlook.
The company also said it plans to launch a sports
prediction market platform next month, partnering with CME. Fletter shares
are dropping about eleven percent. Firefly Aerospace shares are soaring
(21:57):
seventeen percent after it posted strong third quarter results. Nike
upgraded by Wells Fargo to overweight from equal weight, with
a bank set it's profit and loss figures could be
hitting a bottom. Nike up by over one percent and
after today's closing bell, we'll see earnings from chip making,
equipment maker, Applied Materials. I'm Tucker Silva, and that is
(22:19):
Wall Street Watch.
Speaker 3 (22:20):
I love the irony in Nike being upgraded to overweight.
They make double excel sizes, all right, they do, but
it's like it's just something where like you think of
the company and you're like, it's just kind of you know,
it's it's humorous.
Speaker 2 (22:37):
Let's talk a little bit about new contributional limits for
twenty twenty six. I don't know if this is just
because we're like fresh off the shutdown, or if this
was the day that this was gonna be released anyways,
but the IRS gave us the data for contribution limits
for retirement accounts for next year. So for one ks
(22:57):
there's a little complicated, so you're gonna have to, you know,
maybe write this down. If you're not driving four to
one ks. You get to contribute twenty four thousand, five
hundred dollars next year. That's up a thousand from this year. Okay,
that's easy enough. People fifty and older, the bonut, the
extra contribution, what's it called the ketchup ketchup, that's the
(23:19):
one ketchup contribution is gonna be eight thousand extra next year,
up from seventy five hundred this year, So that gets
you a total of thirty two thousand, five hundred. But
then you got the super Ketchup contribution if your age
sixty to sixty three next year, and that gives you
an extra contribution that you can contribute a total of
thirty five seven fifty two. So it's an extra thirty
(23:40):
two hundred and fifty dollars that you can contribute also
next year. And this one is exciting to me. I
do have to say, Uh, the Ketchup contribution for iras
is gonna be eleven hundred dollars next year instead of
one thousand. The inflation adjustment for IRA ketchups is now
able to be index in one hundred dollars increments instead
(24:01):
of five hundred, so you're gonna see those happening more
often that that Ketchup gets bumped up on iras, which
I think is long overdue. And this is you know,
still ignoring the problem of Hey, if your employer has
a retirement planned, you can contribute you know, thirty thousand,
but if you have to do your own, it's significantly less.
But that's neither here.
Speaker 3 (24:20):
North there agreed, and that scenario is becoming a lot
less common. It has become a lot easier to start
a four oh one K. You know, a decade ago,
I would meet with people that work for a company
with fewer than ten employees. None of them would have
a four oh one K. These days a lot of
them do, so that's becoming less of an issue. But
I still think it's preposterous. Uh, let's see what anybody
(24:42):
else just focused on the condiment catchup right now?
Speaker 5 (24:46):
Whenever you guys say ketchup contributions, that's literally all I
think about.
Speaker 3 (24:49):
I know I'm not actually in favor of corporate sponsorships
of government programs, but don't you think the ketchup contribution
should be brought to you by Hines? Yeah? Just see
like that.
Speaker 2 (25:00):
I mean, look like like you've got your wroth for
a one k, why can't you have your hines for
a one k?
Speaker 3 (25:04):
Also, yeah, I like that idea. The trickier party you
got your Goulden's four fifty seven. So the other tricky
part of all of this is the contributions by your
employer for certain people. So this took a while to
actually get into effect because four to one K providers
(25:24):
were like, hey, Congress, pump the brakes. This is complicated,
We're not sure if we can do it. But in
twenty twenty six, if you earned more than one hundred
and fifty thousand dollars in twenty twenty five, then your
ketchup dollars must go into a WROTH for a one
K account.
Speaker 2 (25:43):
And in twenty twenty six, higher innershes employers don't offer
a WROTH for a one K won't be able to
make ketchup contributions.
Speaker 3 (25:51):
And the good news what if I'm a new employee
who is making more than one hundred and fifty grand
in twenty twenty six, but they don't have my earnings
record for I don't understand some of this stuff.
Speaker 2 (26:03):
I don't know, but what I what I do know
is that the number of plans that don't offer a
WROTH component now has dwindled. In twenty twenty, seventy four
percent of four to one K plans offered by Vanguard
at least, so this is Vanguard, it's not across the board.
Seventy four percent of Vanguard four to one k's in
(26:24):
twenty twenty offered WROTH options eighty six percent of them
offered it last year. I would imagine giving the impetus
on this, you're probably getting north of ninety percent for
next year. But there still could be some gaps in there.
Speaker 3 (26:38):
I'll tell you the this has all been about, you know,
how much to contribute, how much the limits are, and
that is an interesting component of all this. But I
don't know about you, Chuck. I was speaking with somebody yesterday,
so this is just kind of fresh in my mind
at the moment. They weren't at all confused about how
much to contribute. The answer for them was, I've got
two kids. You know, I'm gonna contribute whatever I can,
(27:01):
but ultimately, I got to pay the bills, and so
I know, to contribute as much as I can afford
while still being able to pay the bills and not
getting caught into a spiral of debt. The more difficult
question for this person was what should I be contributing
to traditional versus ROTH like. That is not a very
(27:22):
commonly understood formula to go about it, and there's a
few different components to it, you know. One is how
much do you think your earnings are going to grow
over time? How much might your deduction shrink over time.
Where are your current assets already lined up?
Speaker 1 (27:37):
Like?
Speaker 3 (27:37):
Those are complicated questions to begin with, not to mention, Hey,
you know, I just need some extra cash flow, So
how am I best served if I am in a
you know, if I'm pinching pennies right now because I
got two kids that are playing sports or heading to
college next year, and I need to pay for daycare
and you know, new car insurance for my sixteen year old.
Who's going to be on the insurance? Now, what's my
(27:59):
best option? And so these types of questions around retirement plans,
they're more complicated than just hey, how much should I
be tossing in these days? And that's to your benefit
if you get it right, but can be to your
detriment if you're just kind of pointing at it blindly.
And more and more often I'm seeing people just split
(28:20):
the difference and say, hey, half is going in traditional
half is going wrong because I don't know what to do.
If you have questions like that, if you are facing
this decision and you're not sure what to do, which
is common. It's one of the most common questions I
get about retirement plans. Call the Armstrong Advisory Group. Let
us sit down with you for our free consultation. Will
go through these types of complex decisions and how we
frame them for our clients. The numbers eight hundred three
(28:43):
nine three four zero zero one. We offer free consultations
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but we can do them over zoom via phone whatever
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Speaker 1 (28:59):
The proceeding was paid for by Armstrong Advisory Group, a
registered investment advisor. Nothing in the ad or in any
Armstrong guide a specific financial, legal or tax advice. Consult
your own financial tax and to state planning advisors before
making any investment decisions. Armstrong may contact you to offer
investment advisory services.
Speaker 3 (29:14):
Mike, do you like ducks uh in to eat? Yes?
One of my favorite? You eat multiple ducks? No?
Speaker 2 (29:24):
No, no.
Speaker 3 (29:26):
The reason I asked J Powell I think is a
big duck fan.
Speaker 5 (29:29):
Where the hell are you going with this?
Speaker 3 (29:31):
I'm waiting for the payoff here. Yeah, Okay, Jay's got
his ducks in a row. Is where I'm going with this?
You got it.
Speaker 2 (29:38):
There's been a parade of fed speakers this week, and
each and every one of them is in lockstep in
talking about this December meeting the same way, basically saying,
basically saying, yeah, I'm not sure if we're going to
get there as far as a cut. And what this
has the FED Fund's futures market doing is we're now
(30:00):
at a point where it's basically a fifty to fifty
coin toss as to what the market thinks the Fed
is going to do in December. Now, I said yesterday
and Mike, I'm interested to get your thoughts on this.
I have two conflicting views I think on this meeting.
Speaker 3 (30:14):
Okay. The first is given the.
Speaker 2 (30:17):
Lack of new economic data, and given the fact that
supplemental labor market data ADP paychecks indeed is all continuing
to show a weakening labor market, given that the Fed
already cut in September and October, I don't think there's
anything out there that suggests they shouldn't cut in December.
(30:40):
I tend to agree, like, if you've already started down
this path, yeah, there's nothing that would change your mind
in my opinion.
Speaker 3 (30:46):
Yeah, there's been no data release that would make you
do so. The counter to this And here's the other piece.
Speaker 2 (30:54):
When we talk about monetary policy errors, they're rarely because
you went not rarely, they are never because you went
a quarter percent in one direction too far. Sure, it's
usually because it's like, hey, we started cutting and we
should have hiked, or hey we hiked a quarter percent,
we should have hiked five percent twenty twenty two. Like
it's it's those kinds of things. So the place that
(31:15):
I also end up in, though, is well, since September
of last year, the FED is now cut by one
and a half percent one hundred and fifty bases points,
and the housing market is objectively worse today than it
was a year ago. Maybe they're pushing on a string
and additional cuts aren't going to do anything unless you
(31:35):
get to a point where you're like, hey, we got
to take FED funds right down to like one percent,
in which case there's a real problem in the economy.
Speaker 3 (31:41):
Yeah, you may be right there, it might not be
doing anything. I'm not sure that inaction is the right
policy in that case. But I do take your point,
and you say they've got their ducks in the row. Obviously,
I don't think we're gonna hear this type of rhetoric
from the likes of Stephen Meyron. I don't think we'll
hear it from though he came out and said he
wanted a half percent in Yeah, like Chris Waller isn't
gonna come out and say, oh, yeah, we need to
(32:03):
we need to be cautious and we don't need to
cut rates right now. Those two at least have been
firmly in the camp of more rate cuts. But yeah,
generally speaking, otherwise, I don't know if they're giving a
signal of we're not cutting as much as they are
trying to just hold their cards close to the vest.
Speaker 2 (32:19):
But what's the point in doing that, right Like when
when is the Fed ever wanted to like keep strategic
ambiguity out there.
Speaker 3 (32:32):
It's been a while, you know.
Speaker 2 (32:34):
It's like generally you kind of know what they want
to do in advance, and so when they're talking about
it this way, my answer is that.
Speaker 3 (32:41):
You have no They have no idea what's going on
in the economy. They mean that they're My only seeming
answer is they're genuinely confused about the current state of things.
Speaker 2 (32:50):
Look, I know that they haven't gotten their data releases
on schedule, like all of us, and that makes us cranky.
Speaker 3 (32:56):
But grow a pair and make a decision.
Speaker 2 (32:59):
This this is the job you've chosen, you know, like, no,
no one made you become you know, the the president
of the whatever fed or the on the board of governors,
like you chose to do this. And so given that
that's the case, you don't just get to like pack
it in when you don't get a couple of you know,
government data reports and be like, well, I don't know
(33:20):
what to do. No, I don't think that's what they're doing.
I think they're setting the stage for potentially not cutting
in December. I think that's really where they're going. Do.
Speaker 3 (33:30):
I think that's the right move.
Speaker 2 (33:32):
Quite honestly, I don't think it matters either way, because
one rate cut or not is not going to make
or break the economy. It's the trend and the shape,
and and that's what matters. I think that it's unusual,
in my mind, given that the economic data has continued,
you know, to come out matching their concerns that they
already had. Why would they change now that that's the
(33:54):
piece that's interesting to me. But I guess we'll just
have to wait and see. S Take a quick break.
When we return, let's see, we'll talk a little bit
about housing. Actually, no, I want to deal with this
new utility scam. Let's talk about that when we return.
Speaker 1 (34:12):
Breaking business news as it happens only here on the
Financial Exchange Radio Network. The Financial Exchange streams live on YouTube.
Like our page and stay up to date on breaking
business news all morning long. This is the Financial Exchange
Radio Network.
Speaker 5 (34:33):
This year's DAV five k was another incredible success, with
over fifteen hundred runners and walkers, all supporting the Disabled
American Veterans Department of Massachusetts. The race results and photo
galleries are available to see. And if you didn't have
a chance to participate, but it would still like to
support our great American heroes, please visit DAV fivek dot Boston.
(34:54):
Your gifts help fund free rides to medical appointments for
veterans and the nation's first dav led housing initiative providing
homes for single veterans and veteran families. Go to DAV
fivek dot Boston. Make your donation today. That's DAV five
KT Boston.
Speaker 2 (35:11):
All Right, got a new scam that is floating around
out there, This one in relation to utilities detailed by
the Boston Globe. Boston City resident decided to switch their
electricity supplier. The city of Boston allows you to do this.
Most the state of Massachusetts has a whole website that
you know, you can search for different suppliers. Distributors are
(35:33):
generally not ones that you can switch between, because the
actual infrastructure to deliver the electricity is you know, limited.
There's not two sets of telephone polls, is the example
I'll give. So this guy basically signed up to switch,
and a couple days later got basically tag teamed by
like a couple of scammers pretending to be his original
(35:54):
supplier and the new one that he had switched to.
And long story short, he ended up going out and
purchasing nine hundred dollars in gift cards in order to
try to stop this shutdown of his electricity that these
scammers said they were going to be doing so big
(36:14):
things that I continue to come back to.
Speaker 3 (36:16):
Number one.
Speaker 2 (36:17):
There is no merchant, no tax collecting agency, no government official,
no anyone who legitimately would tell you to take payments
in gift cards. Yeah, and so number one. Number two,
if someone calls you saying that you owe them money,
(36:42):
the polite thing to do is to say, thank you,
I appreciate you telling me that I'm going I'm busy
right now, but I'll give you a call back hang up,
and then go and find the actual callback number. Four
the institution that said that they called. It can be
on you know, a website for a city or a company.
It can be on a piece of correspondent that you
have in your house. But do not call back the
(37:02):
same number that just called you, because it may or
may not be legitimate. Find the contact number from somewhere.
Speaker 5 (37:10):
Do you know.
Speaker 3 (37:11):
That's another thing that a legitimate debt collector will do,
will or will not will what. They'll send you a letter? Yeah,
and they know where you live, right so like they
do if you legitimately have a debt outstanding, it's a
very reasonable quest to say, understood, please send me a
letter in the mail so I can review it. A
(37:31):
stammer won't.
Speaker 2 (37:32):
There's basically never anything where you need to pay someone
right that minute, because that's just.
Speaker 3 (37:39):
Not how it works. And it's getting increasingly difficult for
me to not victim blame on this, and I really
try not to, and I understand how this happens, and
I understand, especially with vulnerable adults, how this happens. Might
trust me. I get confused about this stuff sometimes too.
I I do too. There's a time second. The second
(37:59):
you find yourself walking to a CVS to buy gift cards,
that alarm bell has to go off. And if you
can legitimately ask yourself, if you legitimately tell yourself that
that wouldn't go off for you, then you need to
give up control of your finances.
Speaker 2 (38:12):
I do think that that might be, you know, accurate,
But like I can tell you, like I've had instances
in the last month or two where I'm sitting there
and I'm like, is this legit or not? And I'm
even when I make a final decision, I might not
be completely sure.
Speaker 3 (38:27):
Yep, you know. So it's the other place that's full
of scams. Anything on Facebook, marketplace, if you're listing something,
if you're buying something, be especially concerned about it. Yeah,
just take a quick break. Hour two coming up on
the financial exchange. Just the bit
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