On November 13, 2025, the IRS released the cost-of-living adjustments to retirement plan contribution limits for the 2026 tax year.These annual updates are required under the Internal Revenue Code and reflect changes in inflation and other economic factors. Some highlights are: * Due to new Secure 2.0 optional provision Download PDF
Last month, we introduced the notion that the economy is becoming increasingly divided. BlackRock uses the term “bifurcation,” ChatGPT prefers “Dual Economy,” and the common nomenclature is “K-shaped.” This theme is unmistakable across labor markets, consumer spending patterns, wealth and income, and consumer debt. A similar theme has been playing out across capital markets for years: the increasing concentration of a few names in generating massive stock market returns. With the government shutdown, reliable economic data has become relatively scarce.…
BlackRock recently offered an economic presentation to a group of institutional investors. The presenter highlighted a growing economic divergence: while aggregate data shows resilient household spending and balance sheets, this strength is increasingly concentrated in higher-income cohorts. The accompanying chart underscores this divide—lower-income households account for a disproportionately small share of consumer spending while facing the highest pressures from inflation, debt costs, and slowing wage growth. Meanwhile, wealthier households, insulated by asset gains and low-rate liabilities, continue to spend, invest,…
Last week, the Commerce Department revised second-quarter GDP growth upward to 3.3% from 3.0%, with the modest boost largely reflecting stronger consumer spending. As we’ve noted before, the consumer has carried the economy through this cycle—remarkably resilient despite the Fed’s ongoing tightening. That resilience, however, is showing signs of strain. Labor markets are softening, credit card usage is slowing, and wage growth is normalizing. Inflation tied to the COVID-era surge has largely cooled (outside of financial services), but tariff-related price…
Long-time readers know that we have been cautious of a slowdown in consumer spending at a time when the consumer was the primary factor keeping the economy afloat. In hindsight, we were too early in that call: the consumer remained resilient much longer than expected, defiant in the face of rapid inflation. But this week’s GDP report suggests consumption has indeed slowed, growing at less than 1% annualized rate in 2025 versus 3% in each of the two prior years.…
At the risk of dating myself, I cannot think of four words that better describe the “joy” of summer travel. Not knowing where you are, on a seemingly endless journey in the back of an air-condition-free station wagon, was a form of torture few today can comprehend. Jay Powell, the current Chairman of the Federal Reserve, is hearing this question a lot lately. There are two challenges to answering this question. First, unlike most global entities, the USA does not…
“I’m not superstitious, but I am a little stituous.” – Michael Scott, The Office (comedy) Forecasting in the post-COVID era has been challenging, as we have chronicled on many occasions. The extreme changes in economic conditions paired with the rapid pace with which they have occurred is only rivaled by modern tariff policy. Traditional forecasting tools have not been able to keep pace. Nevertheless, we continue to search for clues. Last week, the Commerce Department confirmed the US economy contracted…
“A rose by any other name would smell as sweet.” – William Shakespeare, Romeo and Juliet Yesterday, the Bureau of Economic Analysis released its first GDP estimate for Q1, revealing a – 0.28% contraction. The report appears to blame the Trump Tariffs, citing a surge in imports as companies stockpiled ahead of the levies. But this narrative does more harm than good. First, this front-running of tariffs is a one-time effect, leaving doubt as to potential effects going forward. Second,…
“The key to making money in stocks is to not get scared out of them.” – Peter Lynch The S&P 500 finished the quarter down 4.3% and down less than 10% from its February high. This might seem surprising given the headline news. And while Fidelity’s Peter Lynch is undoubtedly right, staying calm is a lot harder when you are investing your own money! The math is simple but the intuition is not. An example: Stock A: returns +50% in…
This quarter’s theme is based on Newton’s First Law of Motion which states “an object will remain at rest or in motion at a constant speed and direction unless an outside force acts upon it.” There are two critical elements in focus: force and speed. While the law applies to physics, it can also be loosely applied to finance. When we discuss inflation, for example, we are specifically addressing the rate of change (speed) in prices. To forecast (rather than…
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