If this passes, it will be sent to the president because it has already passed in the U.S. Senate. It is a traditional infrastructure bill to build roads, bridges and high-speed internet.
Also, there will be votes on funding the government starting Friday, and raising the debt limit so that the country can pay its bills. There is currently no Republican support for these two bills. The outcomes of these votes are uncertain.
The Federal Reserve Board has given indications that they will probably reduce quantitative easing before the end of the year. This is the first step before raising interest rates. The FED is also realizing inflation may last longer than they expected.
The stock market became even more volatile in September.
The U.S. House is scheduled to vote on several key pieces of legislation. One will be the trillion dollar bipartisan infrastructure bill.
The second vote will be on the more controversial “human infrastructure” with a price tag of around $3.5 trillion. Progressives insist that they won’t vote for the first bill without assurance that the second bill will pass. Moderates and all Republicans are concerned about how much it will cost and what it covers. There will have to be large tax increases to try and cover the cost.
You cannot have wages increase, along with property values, vehicles and many other costs skyrocketing and have only temporary inflation. Higher inflation will force interest rates up and probably stock valuations down.
COVID-19 cases are again surging in many areas.
We will be witnessing a battle in the economy over the next several weeks as mandatory vaccine requirements hit resistance from some people. With the number of job openings, no one knows what effect this will have on the economy. There are also bottle necks in the supply chain.
We are being warned that many stores will not have an abundance of inventory for Christmas. Container ships are backed up at the ports and these ships should be making multiple cargo trips. There just are not enough longshoremen to unload them, nor truckers to ship the merchandise. Forty-foot containers which cost $2,000 last year to go from China to New York last year now cost $15,000.
Grocery prices are climbing rapidly. Many of the super-tech companies that dominated the stock market over the last few years are under scrutiny by regulators around the world. Important profit centers for them like the 30% fee they charge in their app stores, may end. There are apps telling you can save you money on half of the things you buy from perceived price leaders.
Your Financial Future is written by certified financial planner Gary W. Boatman, MBA and CFP, who also wrote the book, “Your Financial Compass: Safe Passage Through The Turbulent Waters of Taxes, Income Planning and Market Volatility.” If there is an area that you would like to see discussed in the column, send your suggestions to gary@BoatmanWealthManagement.com.
There are a lot of things happening that we can not control. What each family must do is to make sure that their retirement plans are stress tested to be prepared for any outcome. Do not risk more than you can afford to lose. Money invested in the stock market should be money you do not need to spend for five years or more. If you have enough safe money, maybe you can take some risk if it matches your risk tolerance and timeline. Make smart decision and not emotional ones. If you do, retirement just might be more enjoyable. Things can change quickly.