Ep. 54 - April/May PCE: A Storm is Brewing
Are you worried about the current state of the economy? You’re not alone. Many Americans are staring right into a storm. Today, we delve right into this month’s Personal Consumer Expenditures (PCE) inflationary reading to see what warnings the numbers give us. With new readings, we can predict the Federal Reserve's policy decisions. Rising wages, rate hikes, concerns about data lag, and shelter costs—these are the storm clouds brewing on the horizon. So let’s discuss what’s happening here so we can prepare our personal finances, like consolidating debt and leveraging home equity.
Jump in and weatherproof your finances as we analyze and prepare for potential economic storms.
[00:01 - 06:23] Setting the scene and analyzing the implications of current inflationary readings
[06:24 - 12:59] Warning signs of a looming storm in shelter costs and consumer credit market as credit card debt hits $1 trillion
[13:00 - 19:45] The dangers of revolving debt and credit limits: A look back at 2008 compared to current market dynamics
[19:46 - 26:23] Auto and credit card delinquencies on the rise among young adults
[26:24 - 37:54] Why we’re seeing a recipe for a potential recession as the Federal Reserve may aim for a hard landing
[37:55 - 44:51] Exploring cash-out refinance as a solution to consolidate debt amid economic uncertainty
Quotes:
“Wage growth is not an indicator of inflation; it’s a byproduct of inflation.” - Daniel Halverson
"The consumer behavior is really the primary reason that the Feds say this is our preferred measure of inflation because we need to know what the consumer is doing." - Quinton Harris
"A lot of people are in agreeance that there is a storm brewing in the credit consumer credit market… Let's do a deep dive into that storm. Let's go into the eye of the storm.” - Quinton Harris
"At some point, the government is going to say, ‘Okay, it's been a good ride for you student loan holders.’ And for those of you that are hoping for magical forgiveness—you might find yourself with a little bit of a surprise." - Quinton Harris
“Essentially, mortgage rates will change based on inflation… the correlation is nearly one.” - Daniel Halverson
"We're seeing a lot of spending still taking place, and we're not seeing the income that represents that.”
"You can navigate any type of storm as long as you know what's coming." - Quinton Harris
Resources Mentioned:
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