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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Welcome to How to Retire On Time, a show that answers your retirement questions. We're here to move past that oversimplified advice you've heard hundreds of times. Instead, we're gonna dive into that nitty gritty. So as always, text your questions to (913) 363-1234 anytime during the week, and we'll feature them on the show. Just remember, not financial advice.
Mike:This is an educational show. David, what do we got today?
David:Hey, Mike. What should we know about the Fed cutting rates?
Mike:It's an interesting conundrum because you have to ask, why is the Fed cutting rates?
Mike:There's only a couple of reasons. One, the economy is not as healthy as it appears to be. Or two, inflation is going too low. I don't really see that being a problem. I mean, why is the Fed cutting rates?
Mike:There has to be a reason. If the economy is growing at a healthy rate, which by most metrics right now it is, then it's either an issue with what they see as a tariff issue because many will argue that tariffs are delayed inflation. Some argue, well, it's already built in, so it's not gonna be there. Well, which is true? Is the job market more at risk?
Mike:Are we more at risk of recession? There has to be a reason why the Fed would drop rates. Because when the markets crash, they wanna have their rates high. So when the markets crash, they can drop it more. So they're giving up critical positioning for a reason.
Mike:Now you might say, well, we fixed inflation, so why not grow the economy? So maybe they're backing off a little bit to let the economy grow, but it's still within their 3% target. Mhmm. Maybe that's it. But even then, I don't know if that's why.
Mike:So you just have to look at it from you ever, like, done people watching, and you're like, why is that person acting that way? Yeah. Sure. Well, there's a reason for it, whether you understand it or not. I don't personally have road rage.
Mike:When someone cuts me off, my thought is, I wonder what they're going through that I don't know that's causing them to make such a dangerous move. That seems like a healthy way to look at it. Yeah. I mean, there was one time I had to rush my kid to the hospital, and I was very aggressive on the driving. I don't wanna indict myself over Yeah.
Mike:Don't incriminate. But, I mean, it was it was certainly like I was accelerating a little bit faster than normal. I was trying to get right to the hospital as fast as possible, and he was fine. All was well, but it was a very scary moment. He choked.
Mike:I cleared up most of it, but he was still having a hard time breathing. And I'm going, well, he's gonna die. So we went straight to the hospital very, very quickly. So yeah. I mean, if someone cuts me off, Maybe their spouse, their their wife is pregnant about to give birth.
Mike:Yeah. Maybe maybe they're late for their job that they're about to get fired. We just don't know. Maybe they're just a jerk. That's also possible, but I'm gonna give people the benefit of the doubt.
Mike:Yes. I don't like it, but I'm gonna try and understand why is the person acting a certain way. With the Fed, you have to ask, why are they doing it? Now keep in mind, it could be to try and alleviate parts of the real estate market because it's very unaffordable. But Powell's smart enough to know that if he lowers the Fed's rates, it doesn't actually lower the treasury rate.
Mike:The treasury rate is based on Scott Bessent, you know, the treasury secretary and the rates that he offers based on what the market's willing to accept. So I think that there's more to the story than is being told. Anytime the rates start to go down, I think it's the canary in the coal mine that maybe the economy is weaker than we realize. I look forward to the Fed minutes. They're very intense discussions to then go through that and really try to pick apart what's really going on because there has to be a reason.
Mike:That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcasts. Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles or if you're missing tax minimization opportunities that you may not even know exist. Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility.
Mike:This is not your ordinary financial analysis. Learn more about Your Wealth Analysis and what it could do for you regardless of your age, asset, or target retirement date, go to ww.yourwealthanalysis.com today to learn more and get started.