Weekly Market Commentary

May 27, 2021

 

Markets Are Wondering About Inflation

What do markets hate?

They hate uncertainty, and recently there has been plenty of it. Some of the questions plaguing economists and pundits include:

Why aren’t people returning to work? Americans, like people in other parts of the world, have not been rejoining the workforce at the pace many had anticipated. One of the most frequently cited theories was explained by The Economist:

“In America businesspeople, almost to a pinstripe, are convinced that the $300-a-week boost to unemployment insurance explains the shortages. However, pundits do not agree on whether stimulus handouts really lead people to shirk. The evidence is hazy elsewhere, too…Australia ditched its job-protection scheme in March, and shortages have worsened.”

The unemployment data has inspired many theories about why jobs aren’t filling more quickly. These include fear of contracting COVID-19, low hourly pay, and lack of dependent care, to name a few. Some states recently modified unemployment programs, so there soon may be new data to help clarify the situation.

Is the Federal Reserve thinking about raising rates or slowing bond purchases? In June 2020, Fed Chair Jerome Powell famously said, “We’re not even thinking about thinking about raising rates.” Some are wondering whether that has changed.

The economic picture isn’t as robust as it was in April. Since then, we’ve seen a weaker-than-expected employment report and higher-than-expected inflation data. While one month does not establish a trend, investors, economists, and pundits will be watching economic data releases closely for clues about economic recovery.

Will inflation prove to be transitory or will it persist? Investors also are worried the Federal Reserve will keep rates low for too long.

Others aren’t so sure the Fed is right. Last Tuesday, former U.S. Treasury Secretary Lawrence Summers said the Fed’s latest forecasts suggest it is misreading the economy and encouraging complacency.

Ahhh, the joys of parenting. With Mother’s Day behind us and Father’s Day ahead, it seemed an appropriate time to share some tweets about the parenting experience. Here are a few entertaining examples shared online by parents and rounded up by Buzzfeed:

“Does anyone have directions to that village everyone says will raise my children? It sounds wonderful.”

–Not Your Trending Mom

“Hi, I’m a parent. You may remember me from such greats as ‘Repeating Myself’ and ‘Arguing over Shoes’ and ‘Stepping on Cereal.’”

–Rodney LaCroix

“Thoughts and prayers for my son who thought it would be funny to tell me ‘I’ll get to it when I get to it, woman.’”

–Mom On The Rocks

“Why aren’t there any horror movies called ‘My 4 year old fell asleep in the car at 5pm.’”

–threetimedaddy

“7 [year old] son: May I have some water?

Me: What are the magic words?

7 [year old] son: I can get it myself.

Me: There you go.”

–Laura Marie

“Blew my nose in front of my daughter and her friends today. Please respect her privacy during this difficult time.”

–Simon Holland

Parenting is never an easy job, and the pandemic made it a lot trickier. Parents have to make important financial planning decisions involving children, too. Often these are related to legacy planning, and sometimes they involve special needs. If you would like to talk about the needs of your family and identify potential solutions, give us a call.

 

Focus On The Positive

“It does not do to leave a live dragon out of your calculations, if you live near one.”–J.R.R. Tolkien