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Recap and the Week Ahead | CPI Thumbnail

Recap and the Week Ahead | CPI

 The Fed will watch the data to determine the path of rate rises… Maybe services prices stay elevated, and if that happens we’ll need higher rates.”   John Williams, New York Fed President

Last week's market recap: 

  • The S&P 500 closed the week down -1.07%.  Year-to-date the index is up 6.71%
  • NASDAQ closed the week down 2.37%.  YTD the index is up 12.05%
  • U.S. Aggregate Bond index was down -1.43% for the week.  YTD the index is up 1.55%
  • 10-Year Treasury Rate increased, ending the week at 3.74% up from 3.53% the prior week.
    • Fed Funds Target rate is 4.75%
  • The 1-Year Treasury is yielding 4.91%
  • A 6 Month Treasury is yielding 4.94%  
    • The is the bond market’s inverted yield curve is signaling that the economy is not strong enough to sustain these higher rates much longer.
    • If your savings account is still under 1%, you should probably find a new savings account.  


The week ahead:  

  • January CPI (Tuesday, 2/14) Inflation data
  • Producer Price Index (PPI) Inflation data
  • Retail Sales Data
  • Housing Starts


Inflation data will take center stage this week: 

The Consumer Price Index (CPI) for January will be released on Tuesday, 2/14.   Most are expecting the year-over-year headline CPI to come in at 6.2%.  Headline inflation on a monthly basis is expected to have a .4% increase mainly due to higher energy prices and persistent shelter inflation (specifically owner’s equivalent rent).  The disinflation that we’ve been experiencing since June should continue, but progress may not be linear and could potentially turn higher.  For economists and the Fed, it is important to dissect the inflation data and the lagging effects of rate hikes on the overall economy.  For investors, it is important to take a longer term view during the choppy economic data and position for an eventual return to a slow-growth and low inflation economy. 

Year-over-Year Headline CPI Chart


* https://tradingeconomics.com/united-states/inflation-cpi


2023 Financial Planning Notes: 

  • Later age for RMDs
  • Bigger contribution limits on retirement accounts
  • Higher income limit for Roth IRA contributions
  • Increased Standard Deductions
  • Higher Marginal Tax Bracket Thresholds
  • 529 rollovers to Roth IRAs (requirements need to be met)
  • Higher threshold for 0% long-term capital gains


As always, let us know if you have any questions.


CRA Investment Committee 


Matt Reynolds CPA, CFP®

Tom Reynolds, CPA 

Robert T. Martin, CFA, CFP®

Gordon Shearer Jr., CFP® 

Jeff Hilliard, CFP®, CRPC®

Joe McCaffrey, CFP® 


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