When there is too much debt, interest rates and currency rates tend to be driven down. This can be good and bad for economic conditions.

The Good: 

• The OBBB individual and business tax cuts should stimulate the economy by putting more money into Americans pockets.
• Lowering real interest rates and real currency exchange rates can also stimulate the economy and lifts asset prices.
• Lowering interest rates reduces the debt service costs and makes it cheaper to borrow.
• Lowering currency exchange rates make a country’s goods and services less expensive relative to countries that have rising currencies stimulating economic activity and rising asset prices.

The Bad:

• Over the long term it can produce higher inflation and greater debt.
• Central banks push the bond yields down, which raises the prices of bonds and leads to lower future returns for lenders and creditors.
• Increases debt.

US Economy: The economy is strong and should continue to grow if we continue to have:

1. Robust consumer spending.
2. Strong labor market and decent wage growth 
3. Inflation is low in the 2.5% to 3.0% range.

Consumer spending is a main supporter of our economy.  If the supply of labor remains below the demand for labor, wages should stay strong, and consumers will continue to spend.

Equity Markets: We are bullish on the market but careful not buying overvalued stocks.

The correction in April was short lived and the markets quickly returned to being overvalued.  The overbought, overvalued, and overly optimistic conditions remain.  In this environment, any unexpected news can cause extreme market volatility. Copper is a good example of how fast a “overvalued” trade can unravel. The 20% one day correction was not based on fundamentals but the expectation on the tariffs.  Based on the current administration priorities, we are bullish on growth and feel we could see over the next several years the US Equity market move higher in a zig zag fashion. However, no one has a crystal ball, and things change so we will adjust our view as we go forward. 

As your fiduciary, we use comprehensive research to determine if the market is bullish or bearish and help identify investments that foster growth and navigate market risks effectively.

Conclusion:

Deregulation and tax cuts could potentially provide a boost to US economic and market growth. Businesses are more likely to invest when the political environment favors deregulation. When taxes are cut, individuals and households are left with more after-tax income. This increase in disposable income can lead to higher consumer spending on goods and services and potentially boost economic growth.  

The S&S Wealth Management team is dedicated to growing and preserving your wealth through diverse economic and market conditions. We manage money strategically, factoring in your risk tolerance, financial goals, and income needs, always keeping growth and preservation as core objectives. We utilize proven tools and research to navigate the inherent risks of investing effectively, ensuring your financial future is built on a solid foundation.  

Our purpose is to simplify your financial future, guide you to successful strategies that are custom to your situation, empower your understanding through education, tax planning and safeguard your loved ones with proper estate planning.

It is important that you visit your S&S Wealth Management Adviser Representative at least annually to review your personal and financial situation, your investment objectives and evaluate your accounts so modifications can be made if necessary. 

The S&S Wealth Management Team is Proactive, Watchful, and acts as a Guardian of your financial success.  Thank you for your trust and business!