Anticipation is growing for the Fed’s next two-day policy meeting, which ends on September 18, 2024.
And with good reason! If the Fed decides to cut short-term interest rates, it would be the first adjustment to be lower in more than four years.
In his August speech in Jackson Hole, Wyoming, Fed Chair Powell confirmed that “the time has come for policy to adjust.” He also indicated that the Fed is more concerned about supporting the labor market while its progress on inflation continues.
Powell’s hat tip to the labor market appears well-timed. As you can see in the chart below, the Labor Department’s August Job Openings and Labor Turnover Survey (JOLTS) fell to its lowest level in 3½ years and now sits at a ratio of 1.07 job openings to job seekers. The JOLTS update preceded a disappointing August jobs report, which showed payrolls expanded by 142,000.
Market speculators anticipate the Fed dropping rates by 0.25% at its September meeting. Some expect the Fed to cut rates by 0.5%, but others say a more significant cut may send a mixed message about the economy with the presidential election just a few weeks away.
To us, this means buckle up for the next few weeks—in fact, buckle up for the next few months!
After the Fed meeting, the election cycle will accelerate. Historically, volatility has picked up heading into a presidential election. So, 1) stay focused on your goals. 2) Try not to let short-term price swings take you off your game. And 3) remember, we will keep you updated about the “comings and goings” on Wall Street.
The Fed’s outlook is a forecast, and forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.
CNBC.com, August 23, 2024. “Fed Chair Powell indicates interest rate cuts ahead: ‘The time has come for policy to adjust’ “
CNBC.com, September 4, 2024. “Job openings fell more than expected in July in another sign of labor market softening”
CNBC.com, September 6, 2024. “August payrolls grew by a less-than-expected 142,000, but unemployment rate ticked down to 4.2%”
- Our Advisor Associate Teresa Marchitto recently took a trip to sunny San Diego to attend a 4-day, educational, LPL "Focus" event. Through various informational and training sessions, she had the opportunity to learn from numerous guest speakers and industry professionals, gaining insights into how our team can continue to deliver exceptional service to our clients by leveraging the latest advancements in the field. Thanks for representing the CRF team, Teresa!
- We are so excited to share the news of a new mini addition to our CRF family! Our Managing Director of Operations,Arianna Lemonias, welcomed her beautiful baby daughter, Stella, on Monday, August 5th. Heartfelt congratulations to Arianna and her husband Austin!
- While Arianna enjoys some time at home with her newest family addition, Linda StephensandKimberly McCorklehave joined us as Administrative Associates to assist in her absence.Teresa Marchittowill be assuming Arianna's responsibilities until Arianna's return. Should you receive any communications from Linda, Kimberly, or Teresa in the following months, please know that they are all valued members of our CRF team!
- If you have found value in the assistance, the personal bonds, and the trust that you and your advisor have formed, we would be honored if you could take a few moments to share your experience as others have here. To submit a testimonial, please access our convenient Testimonial Submission webpage by entering the code ”8231”.
Divorce or Separation Can Affect Your Taxes
The first thing to consider is alimony payments. Alimony payments paid under a divorce or separation instrument are deductible by the payer, and the recipient must include it in income. Alimony is not subject to tax withholding, so increasing the tax paid during the year may be necessary to avoid a penalty.
The next thing to consider is IRA contributions. A divorce agreement by the end of the tax year means taxpayers can’t deduct contributions made to a former spouse's traditional IRA. They can only deduct contributions made to their own traditional IRA.
Once you reach age 73, you must begin taking RMDs from a traditional IRA in most circumstances. Withdrawals from traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty.
This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from IRS.gov
Identity Theft and Your Taxes
Here are a few things that may help you against identity thieves:
The Internal Revenue Service (IRS) never will contact you via email or phone to request personal information. If you receive a scam email or call that claims to be from the IRS, report it to phishing@irs.gov.
People can steal your identity by stealing your wallet or purse, receiving the information they need over the phone or email, finding your personal information in the trash, or accessing information you provide to an unsecured website (only enter credit card information on websites that start with “https://”).
If you receive a letter from the IRS indicating that more than one tax return was filed in your name, your identity may have been stolen.
A cat falls into a hole 14.5 feet deep. The cat can jump 3 feet high, but she slides back 1 foot with each jump. How many jumps does it take her to get out of the hole?
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Last Month's Riddle: You need to park a car for the weekend. You find a parking space marked “2-Hour Parking M-F, 8am-6pm” with no other restrictions. You call the city and find that overnight parking is allowed on this block. So, what is the maximum amount of time you can leave your car in this space without getting a ticket?
Answer: Given this information, you can park your car in this space between 6 PM and 10 AM without any issues. Enforcement is only active between 8 AM and 6 PM, and the enforced limit is 2 hours during those hours. Therefore, for the weekend you can parkFriday 6PM through Monday 10AM.