Happy Labor Day! 🛠️
Today, we take a moment to recognize and appreciate the hard work of individuals across the nation.
Whether you're relaxing at home or enjoying a well-deserved day off, I hope you're able to recharge and enjoy this special day.
To the builders, creators, and doers: Happy Labor Day!
much-anticipated speech, Federal Reserve (Fed) Chair Jerome Powell said, “In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation…Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
Investors celebrated and financial markets rallied.
“Powell’s speech sparked the strongest cross-asset rally since April…,” reported Rita Nazareth of Bloomberg. On Friday, “The S&P 500 climbed 1.6 [percent], with tech megacaps rebounding. The Russell 2000 of small firms jumped about 4 [percent]. Two-year yields sank 11 basis points to 3.68 [percent]. Traders boosted bets on a Fed cut next month, pricing in an 85 [percent] chance of a move. The dollar fell.”
Monetary policy – the steps the Fed takes to maximize employment and keep prices stable – can be:
Recent economic data showing a slowdown in employment and an uptick in inflation complicate the upcoming rate-setting decision, reported Joseph E. Gagnon of the Peterson Institute for International Economics.
When the Fed lowers the federal funds rate, the cost of borrowing moves lower as rates on home equity loans, auto loans, and credit cards typically follow the Fed. Lower borrowing costs may create opportunities for businesses to invest in new ventures and hire more workers. A rate cut also can boost consumer spending, reported Sarah Foster of Bankrate. The exception to this rule is mortgage loans. The rate for 30-year fixed mortgages typically tracks the benchmark 10-year Treasury note.
Last week, after the Fed Chair’s speech, the Dow Jones Industrial Average closed at a record high, and U.S. Treasuries rallied as yields moved lower, reported Karishma Vanjani of Barron’s.
WHAT DO YOU KNOW ABOUT FASHION? The fashion industry is an important part of the global economy. It employs 300 million people and is expected to have global revenue of $2 trillion by 2026, reported Elaine Ritch for Economics Observatory.
Like all industries, fashion has hits and misses. There are trends that shine and trends that perplex. Consider Big Red Boots (BRBs), which were introduced at New York Fashion Week in 2023. The cartoon-style boots looked like they’d been pulled from Mario’s closet and retailed for $350. Their popularity was tempered by suction issues – the grippy rubber boots proved difficult to remove, reported Christian Allaire of Vogue.
See what you know about fashion trends today, and in the past, by taking this brief quiz:
2. People of a certain age may remember platform shoes as a disco-era wardrobe necessity. The 70’s weren’t the first time thick-soled shoes trended, though. In 16th century Venice, “chopines” – boots with platforms that were up to 20 inches tall – were popular. Theboots were worn to:
3. In the 1960s, dresses made of an unusual material that was printed with geometric patterns became very popular. What were the dresses made of?
4. Which of the following is NOT an iconic fashion piece, according to Glam Observer?
WEEKLY FOCUS – THINK ABOUT IT
“The best fashion show is definitely on the street. Always has been and always will be.”
-- Bill Cunningham, Photographer
Answers: 1) d; 2) c; 3) b; 4) b
Sources:
https://www.federalreserve.gov/newsevents/speech/powell20250822a.htm
https://www.bloomberg.com/news/articles/2025-08-21/stock-market-today-dow-s-p-live-updates?srnd=phx-markets or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-25-25-Bloomberg-Wall-Street-Has-Best-2.pdf
https://www.investopedia.com/terms/m/monetarypolicy.asp
https://www.piie.com/blogs/realtime-economics/2025/feds-september-dilemma
https://www.bankrate.com/banking/federal-reserve/how-federal-reserve-impacts-your-money/
https://www.fanniemae.com/research-and-insights/publications/housing-insights/rate-30-year-mortgage
https://www.barrons.com/livecoverage/stock-market-news-today-082225/card/dow-marks-first-record-close-of-the-year-as-s-p-500-nabs-new-high-3FEYOjg5CcgmPAwTmvae or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-25-25-Barrons-Dow-Markets-First-Record-8.pdf
https://www.economicsobservatory.com/fast-fashion-what-are-the-true-costs
https://www.vogue.com/article/everyone-is-wearing-mschf-big-red-boots or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-25-25-Vogue-Why-Is-Everyone-10.pdf https://www.economist.com/business/2025/08/21/chinas-hottest-new-look-the-facekini or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-25-25-Chinas-Hottest-New-Look-11.pdf
https://www.bbc.co.uk/bitesize/articles/zd8rvwx
https://glamobserver.com/8-iconic-fashion-pieces-in-the-history-of-fashion/
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Stocks were mixed last week despite a powerful Friday rally sparked by Federal Reserve Chair Jerome Powell, who opened the door to adjusting short-term interest rates. The Standard & Poor’s 500 Index picked up 0.27 percent while the Nasdaq Composite Index lost 0.58 percent. The Dow Jones Industrial Average rose 1.53 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 0.80 percent.1,2 All Eyes on PowellStocks traded in a narrow band to start the week as investors awaited fresh economic data and comments from Fed officials at their annual symposium in Jackson Hole, Wyoming. After a big retailer reported quarterly results on Tuesday and gave encouraging guidance, stocks pushed higher. But markets took a breather later in the day as pressure on megacap tech and chipmakers led the Nasdaq and the broader market lower.3 The S&P 500 and Nasdaq fell after minutes from the Federal Reserve's July meeting were published; they revealed that most Federal Open Market Committee (FOMC) members were more concerned about inflation than the job market.4 On Friday, markets rebounded after Fed Chair Powell opened the door to a rate move at the Fed’s September meeting. The day’s gain was strong enough to regain the week’s lost ground for the S&P and nearly all of it for the Nasdaq—and put the Dow solidly ahead for the week.5 |
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Watch the Rotation
Investors appeared to rotate out of megacap tech as some expressed concern about valuations and the durability of the AI-driven rally. Two facts helped support this observation: the S&P fared better than the tech-heavy Nasdaq for the week, and the Russell 2000 Index of small-cap stocks (+3.25 percent) beat all three major stock averages.6 The Federal Reserve also rotated a bit. In contrast to the Fed’s July meeting—where inflation was the bigger concern for most Committee members—Fed Chair Powell’s Friday morning speech at Jackson Hole revealed the FOMC was now more concerned with the jobs market.7 This Week: Key Economic Data Monday: New Home Sales. Dallas Fed President Lorie Logan and New York Fed President John Williams speak. Tuesday: Durable Goods. Case-Shiller Home Price Index. Treasury Buyback Announcement. Consumer Confidence. Wednesday: Survey of Business Uncertainty. Richmond Fed President Thomas Barkin speaks. Thursday: Gross Domestic Product (GDP). Jobless Claims (weekly). Pending Home Sales. Corporate Profits. Fed Balance Sheet. Friday: Personal Consumption & Expenditures (PCE) Index. International Trade Balance in Goods. Retail & Wholesale Inventories. Consumer Sentiment. Source: Investors Business Daily - Econoday economic calendar; August 22, 2025 This Week: Companies Reporting EarningsWednesday: NVIDIA Corporation (NVDA), CrowdStrike (CRWD) Thursday: Dell Technologies Inc. (DELL) Source: Zacks, August 22, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice. |
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“To expect truth to come from thinking signifies that we mistake the need to think with the urge to know.” – Hannah Arendt |
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Meet the Taxpayer Advocate ServiceDid you know an independent organization within the IRS is fighting for your rights as a taxpayer? The Taxpayer Advocate Service (TAS) protects taxpayers' rights, allowing all taxpayers to be treated fairly and know and understand their rights under the Taxpayer Bill of Rights. Here are some things to know about TAS:
This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. Tip adapted from IRS8 |
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What is Compostable?Composting is a great way to go green and keep more waste out of landfills that don’t need to be there. It has many benefits, including waste management and reduction, soil enhancement, and greenhouse gas reduction. Plus, composting doesn’t have to be hard! Let’s break down what is compostable to help you understand where to start. There are two types of compostable waste, green and brown:
As you can see, starting composting is easy. You don’t need a complicated setup or special process. These two compost categories provide the foundation for everything you need to know. Tip Adapted from Sustainable Jungle9 |
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I’m usually standing on a city sidewalk, and I’ll always stand by your car. But if you don’t feed me, you may get into trouble. What am I? Last Week's Riddle: Create a 13-letter word using all 13 of the following letters: O A I I S T T R R D N A M. |
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| Margay (Leopardus wiedii) Alajuela, Costa Rica |
1. WSJ.com, August 22, 2025
2. Investing.com, August 22, 2025
3. CNBC.com, August 19, 2025
4. CNBC.com, August 20, 2025
5. MarketWatch.com, August 22, 2025
6. WSJ.com, August 22, 2025
7. WSJ.com, August 22, 2025
8. IRS.gov, December 27, 2024
The Markets
Was inflation higher, lower, or steady?
Perspective has a tremendous influence on how we perceive the world around us. If you saw any three-dimensional chalk drawings on sidewalks this summer, you understand how perspective affects understanding. When seen from one direction, a chalk drawing looks flat. When seen from another, a winged dragon surges from a hole in the pavement.
Last week, major news sources had varied perspectives on inflation. Here are a few of the headlines we saw:
“Core Inflation Rises to 3.1 [percent]” (Barron’s)
“Inflation holds steady…” (CNN)
“Inflation cools slightly in July from prior month” (Fox Business)
Remarkably, all were correct. The news sources simply highlighted different aspects of the Consumer Price Index (CPI). Here’s what the CPI showed for June and July of this year.
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June 2025 (month to month) |
July 2025 (month to month) |
June 2025 (year over year) |
July 2025 (year over year) |
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Headline inflation (all items measured) |
0.3% |
0.2% |
2.7% |
2.7% |
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Core inflation (excludes volatile food and energy prices) |
0.2% |
0.3% |
2.9% |
3.1% |
Headline inflation moved slightly lower, on a month-to-month basis (from June to July). It remained steady year over year, which is the 12-month period through July 2025. In contrast, core inflation, which excludes volatile food and energy prices, moved slightly higher on a month-to-month basis (from June to July). It increased year over year.
The Federal Reserve (Fed)’s target for inflation is 2 percent.
The Producer Price Index (PPI) came out last week, too. It tracks how prices have changed for groups that produce and sell goods and services. It was up 3.3 percent in July, year over year, which was higher than June’s 2.4 percent increase.
“U.S. wholesale inflation accelerated in July by the most in three years, suggesting companies are passing along higher import costs related to tariffs. The producer price index increased 0.9 [percent] from a month earlier, the largest advance since consumer inflation peaked in June 2022…,” reported Augusta Saraiva of Bloomberg.
Last week, major U.S. stock indexes continued to rally. U.S. Treasury yields were mixed. Yields for some shorter maturities of Treasuries moved lower, while yields on longer maturities rose.
WHERE ARE INTEREST RATES HEADED? One of the drivers behind the recent stock market rally has been an expectation that the U.S. Federal Reserve (Fed) will respond to softening economic data by lowering the federal funds rate, reported Saeed Azhar, Johann M Cherian and Sanchayaita Roy of Reuters.
Fed rate cuts are intended to stimulate economic growth by making it less expensive to borrow money. When it’s cheaper to borrow, companies’ expenses may fall and profits can increase, lifting stock prices, reported Mary Hall of Investopedia.
After last week’s Consumer Price Index was released, expectations for a September Fed rate cut soared above 90 percent, according to CME FedWatch. “Inflation is still higher than the Federal Reserve would like — but not high enough to stop the central bank from cutting interest rates next month. That’s investors’ takeaway from yesterday’s consumer price index report,” reported Phil Serafino and Edward Bolingbroke of Bloomberg.
The catch is that a Fed rate cut doesn’t always have the intended effect. Sometimes, the Fed reduces or increases the federal funds rate and other interest rates don’t follow suit. Bloomberg Economics Chief Economist Tom Orlick explained:
“Let’s cast our minds back briefly to the early 2000s, to [former Fed Chair] Ben Bernanke and to the famous savings glut hypothesis. So, back then, the Fed was hiking [the federal funds rate] but long-term Treasury rates weren’t going up. Bernanke said it’s because there’s a glut of global savings. All of this money is coming from China and Saudi into the U.S. Treasury market…that situation is reversed and we’re no longer in a world with a savings glut. We’re in a world with a savings shortage. And that means it doesn’t matter who President Trump appoints as the next Fed chair…that savings shortage is going to mean that long-term rates, the 10-year Treasury yield stays high and…we think 4 to 5 percent for the 10-year Treasury is the new normal.”
The 10-year U.S. Treasury note yielded 4.27 percent at the start of last week. By week’s end it was at 4.33 percent.
WEEKLY FOCUS – THINK ABOUT IT
“I don't think there's too much normal out there anymore. Though there's still plenty of average to go around.”
― John David Anderson, Author
Sources:
https://www.barrons.com/livecoverage/inflation-july-cpi-rate-report/card/core-inflation-rises-to-3-1--UD6vxFsucLKhK6pJYSX8 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-Core-Inflation-Rises-1.pdf
https://www.cnn.com/2025/08/12/economy/us-cpi-consumer-inflation-july
https://www.foxbusiness.com/economy/cpi-inflation-july-2025
https://www.bls.gov/news.release/cpi.nr0.htm
https://www.bls.gov/news.release/archives/cpi_07152025.htm
https://www.richmondfed.org/publications/research/econ_focus/2024/q1_q2_federal_reserve
https://data.bls.gov/timeseries/WPUFD4&output_view=pct_12mths
https://www.barrons.com/market-data or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-Barrons-Market-Graphs-9.pdf
https://www.reuters.com/world/us/sp-500-nasdaq-hit-new-closing-highs-rate-cut-hopes-2025-08-13/ https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-FedWatch-Market-Rate-Probabilities-11.pdf
https://www.bloomberg.com/news/newsletters/2025-08-13/fed-rate-cut-bets-ramping-up-after-inflation-data?srnd=phx-economics-v2 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/08-18-25-Fed-Rate-Cut-Bets-12.pdf
https://www.goodreads.com/quotes/search?q=unexpected
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Stocks rose last week despite mixed signals on inflation as investors kept one eye on the Fed’s September meeting. The Standard & Poor’s 500 Index advanced 0.94 percent, while the Nasdaq Composite Index added 0.81 percent. The Dow Jones Industrial Average rose 1.74 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 2.16 percent.1,2 Third Gain in Four WeeksStocks posted modest losses to start the week as investors braced for July consumer inflation reports. The White House’s executive order on Monday extending the tariff deadline for China by 90 days failed to move markets in the other direction.3 Stocks then staged a two-day rally following the latest Consumer Price Index (CPI) report, which showed July inflation held steady over the prior month—beating expectations. The inflation news led some investors to move into small-cap stocks, with the Russell 2000 Index of small-cap stocks rising 5 percent over Tuesday and Wednesday.4 However, markets slipped Thursday as investors dug into the Producer Price Index (PPI) for July, which showed wholesale inflation hit a 3-year high last month; this was the third weekly gain in the past four weeks for each of the three major averages; the S&P and Nasdaq advanced four of the last five weeks.5,6,7 |
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A Mixed Inflation Story
Inflation continues to give mixed signals, which can unsettle investors who anticipate the Fed adjusting rates at its September meeting. Last week’s CPI report showed that “headline” (retail) inflation held steady. Stocks rose in response, even though core inflation—excluding volatile food and energy prices—was hotter than economists expected. Two days later, the PPI report revealed that inflation began to creep into wholesale prices in July. Stocks fell in response as investors processed the conflicting reports.8,9 This Week: Key Economic Data Monday: Homebuilder Confidence Index. Tuesday: Housing Starts. Building Permits. Federal Reserve Official Michelle Bowman speaks. Wednesday: Minutes from Fed’s FOMC July Meeting. Federal Reserve Official Christopher Waller and Atlanta Fed President Raphael Bostic speak. Thursday: Weekly Jobless Claims. Services & Manufacturing PMI Composite. Existing Home Sales. Leading Economic Indicators. 30-Year TIPS (Treasury Inflation-Protected Securities) Auction. Fed Balance Sheet. Atlanta Fed President Raphael Bostic speaks. Friday: Fed Chair Jerome Powell speaks. Source: Investors Business Daily - Econoday economic calendar; August 15, 2025 This Week: Companies Reporting EarningsMonday: Palo Alto Networks, Inc. (PANW) Tuesday: The Home Depot, Inc. (HD) Wednesday: The TJX Companies, Inc. (TJX), Lowe’s Companies, Inc. (LOW), Analog Devices, Inc. (ADI) Thursday: Walmart Inc. (WMT), Intuit Inc. (INTU) Source: Zacks, August 15, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice. |
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“If you would be loved, love and be lovable.” – Benjamin Franklin |
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Learn About ABLE AccountsPeople with disabilities can use an Achieving a Better Life Experience (ABLE) account to help pay qualified disability-related expenses. Here are some things to know about ABLE accounts:
This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional. Tip adapted from IRS10 |
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Infused Water RecipesStaying hydrated is essential for our overall health, and these fun, delicious infused water options make drinking water a little more fun. Bonus points if you try them with sparkling water for a bit of fizz!
To infuse your water with these delicious combinations, just put all the ingredients in a pitcher, add water, and remove the fruits, veggies, or herbs in 24 hours. Drinking water has never been tastier or more beautiful. Tip Adapted from Culinary Hill11 |
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Create a 13-letter word using all 13 of the following letters: O A I I S T T R R D N A M. Last Week's Riddle: What is worn by the foot and often bought by the yard? |
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Blue-Ringed Octopus |
1. WSJ.com, August 15, 2025
2. Investing.com, August 15, 2025
3. CNBC.com, August 11, 2025
4. CNBC.com, August 13, 2025
5. MarketWatch.com, August 14, 2025
6. WSJ.com, August 15, 2025
7. WSJ.com, August 15, 2025
8. CNBC.com, August 12, 2025
9. MarketWatch.com, August 14, 2025
10. IRS.gov, July 22, 2024
11. Culinary Hill, March 19, 2025