Clearview In Focus - September 2021
Clearview In Focus: September 2021
Dear Valued Clients,
I’d like to start off by acknowledging the horrible events taking place in Afghanistan. U.S. citizens, troops, and Afghanistan civilians have been in terrifying situations the last few weeks, as U.S. involvement comes to an end. Our thoughts and prayers are with the innocent people caught in the middle of the conflict.
On August 27th, Federal Reserve Board (FRB) Chairman Jerome Powell spoke in regards to the current path the FRB is willing to take. As a reminder, the FRB has the ability to directly impact key economic metrics. They have the ability to steer interest rates and monetary supply by pulling economic levers, so to speak.
Powell stated (yet again) the inflation increase is temporary, and they are not worried about the trajectory of inflation. They believe inflation will subside when they reduce Treasury bond purchases. Currently, they are buying about $120 billion bonds a month from bondholders. This infuses cash into the market. More cash into the market supports a higher inflation rate. Unfortunately, Powell doesn’t put a hard date on when the Treasury bond buybacks will decrease. Experts suggest it is unlikely to begin before June 2022. Similarly, they don’t plan on raising interest rates anytime in the near future. Raising interest rates is a good way to cool the expansion of the economy, and lessen the high inflation rate threat. Remember, the decisions the FRB makes are based on economic trends. If the U.S. changes its current course, we can expect to see changes to the timeline of these decisions. For example, if the country went into another extended Covid-19 lockdown, the FRB would likely keep interest rates low beyond 2022.
As we head into September, it would be wise to start planning for the end of the year. Unlike last year, Required Minimum Distributions are in effect for traditional IRA and employer-sponsored retirement plan accounts (such as 401(k)s, 403(b)s and 457(b)s) for owners who reached age 70.5 by December 31, 2019, or age 72 by December 31, 2021. Be mindful of when you would like to receive those, if you haven’t already. If you have any qualified charitable contributions for 2021, we only have a few months left to make those donations. It’s never a bad idea checking with your accountant or CPA for any tax changes you are able to take advantage of. With a new Presidential administration, there is a possibility material changes were made to the tax code.
As some of you already noticed, we have changed our phone system to receive all incoming calls directly to our office. We no longer use a third-party phone service to direct calls. Your call will be answered by Desiree or Dawn.
With the long holiday weekend right around the corner, we will be closing our office at 1:00 PM Friday, September 3rd, and remain closed for Labor Day (September 6th).
Each day feels more and more like Fall. For me personally, nothing screams Fall like the start of the football season!
Your Clearview Wealth Advisors Team
Written by: Corbin Coursey