Economy

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The Fed: What They See, Why It Matters

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The Fed is sending up a flare: the economy may be softening.

In a recent speech, Federal Reserve Chair Jerome Powell signaled that interest rate cuts could be on the table soon. He expressed rising concern about the job market, noting a sharp slowdown in hiring and the risk of further weakness ahead. And he’s not alone. Other indicators have started pointing in the same direction. Taken together, these signals point to potential shifts in economic momentum that could affect interest rates, the markets, and your financial plan.

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Moody's Downgrade

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One of the world’s top credit rating agencies just made a move no one wanted to see, and the financial media took notice. You may have heard that Moody’s downgraded the U.S. from Aaa to Aa1. (1) Their concerns? Rising debt, persistent deficits, and a lack of political will to change course. As you might have guessed, that triggered a wave of scary headlines. News outlets ran with bold claims. Pundits warned of economic doom. So, should you panic, sell everything, and build a bunker? Not quite.

Let’s take a look at what this debt rating downgrade actually means…

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Caution & Optimism Can Coexist

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After reaching more new highs recently, markets have pulled back and gotten choppy. (1)

Let's break down what's happening and why it matters.

What's driving recent volatility?

Concerns about the impact of inflation and tariffs on consumer sentiment are one major driver. (2) If Americans lose confidence in the economy, they may pull back on spending, which is the biggest driver of economic growth.

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Deep Seek and the AI "Space Race"

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After reaching new record highs in recent weeks, markets fell earlier this week on worries that cheaper AI competition from China could pose risks to U.S. tech companies. (1) What caused the market reaction.

Let’s dive in.

What caused the tech market to move lower?

Much of the market run-up over the last two years has been driven by AI mania, with U.S. companies leading the charge. However, this narrative faced a test when DeepSeek, a Chinese tech startup, released an advanced (much cheaper) AI model.