Long time readers of our newsletter know that we are not fond of market narratives – stories built on an ounce of truth and a pound of nonsense. They are the modern equivalent of ghost stories… but for old(er) people. The latest narrative involves rising interest rates in the US. The story tellers begin with a 6-week chart showing rapidly rising rates and they tie the rise in rates to a new fear of fiscal deficits and tariffs. This is…
Last month’s Recession Watch newsletter highlighted VISA’s credit card activity index to get a sense of how the consumer is faring. This month, we take a higher-level view of spending and explain why bank lending is critical for economic growth. The chart compares the most recent lending data vs levels seen just prior to the COVID crisis. Total lending is currently growing at a 2.5% annual rate versus 4.7% pre-COVID. More importantly, consumer credit card lending is the only segment…
Over the past month, the economic narrative has finally shifted. At the annual Federal Reserve conference in Jackson Hole, Chair Powell expressed ‘greater confidence’ in the declining inflation data and the normalization of labor markets. Consequently, the financial media has started featuring a new group of experts who argue that the Fed might be acting too late. Are they right? Answering this question is difficult under normal circumstances, but this economic cycle is far from normal. The sophisticated models designed…
As frequent readers know, the remaining effects of inflation are isolated sectors like autoinsurance and the lagging shelter component. The U.S. labor market has normalized, with strongemployment and reduced competition among employers. Finally, economic growth remains moreresilient than many had expected. Given these conditions, the Fed seems ready to cut policy rates,leading us to topic of the month: mortgage rates. In our January newsletter, we debunked the oft-reported premise that the Fed sets mortgagerates. In reality, mortgage rates and the…
Are You a Member of Your Company’s 401(k) Retirement Committee? Do you know if your fiduciary processes are robust enough? As a member of your company’s 401(k) retirement committee, it is crucial to ensure that your plan meets the highest standards of fiduciary duty. Conducting a thorough audit of your fiduciary processes is a strategic way to ensure your retirement plan committee is fulfilling its fiduciary responsibilities. Why Should Plan Sponsors Audit Their Fiduciary Processes? Auditing your fiduciary processes is…
As we have chronicled, the underlying inflation data is showing persistent signs of weakeningwhile the headline numbers remained stubbornly high. Conversely, we have shown that whileeconomic growth remains strong, the growth is ever increasingly attributable to one sector of theeconomy – the consumer; or more precisely, consumer spending on services. Recent data releasessuggest that both inflation and spending are finally cooling. To continue with the soft-landing analogy (cliche?), we are in final approach but we arecaptained by a team with…
When it comes to planning for retirement, a 401(k) is one of the most powerful tools available to employees. Yet, many Plan Sponsors remain unaware of the critical differences between the various types of advisors who manage these plans. One of the most significant distinctions lies in whether or not your 401(k) advisor is a fiduciary. Understanding this difference can have a profound impact on your retirement savings and financial security. Why is it Important for an Advisor to be…
As stewards of employees’ retirement savings, 401(k) plan committees bear a significant responsibility. One of the most crucial aspects of this role is a comprehensive understanding of the fees associated with the plan. This includes not only the costs related to investments and revenue sharing but also the payments received by the recordkeeper and any advisors involved. Here’s why a thorough grasp of these fees is essential for effective plan management. The Impact of Fees on Retirement Savings Even seemingly…
Many 401(k) plans engage advisors to provide investment guidance and fiduciary support. It is crucial for plan committees to fully understand the structure of these fees and the role of the advisor. Advisor fees can be charged as a flat fee, an hourly rate, or a percentage of assets. Beyond the fee structure, committees must determine whether their advisor is acting as a fiduciary when giving advice. Understanding the advisor’s fiduciary status is critical. A fiduciary advisor is legally obligated…
As the inflation story continues to drag on longer than anyone hoped or expected, we continue todissect it and present our findings to clients. In those discussions, a few questions keep surfacing. Here are a few answers: Inflation simply refers to the change in prices, typically reported on a year-over-year basis. Ifan apple cost $1.00 last year but costs $1.10 this year, the ten cent increase amounts to 10%inflation. However, if the price of the apple falls to $0.90, it…
Comperio Retirement Consulting has been named one of the largest 100 Investment Consultants in the United States according to Pension & Investments (P&I) for the past 8 years
