Our mission is to help you Preserve Your Assets and Protect Your Lifestyle. Our newsletter aims to educate you on the economic environment and provide life perspectives and financial planning ideas to help you!
Quarterly Market Review
Morningstar Economic Outlook
🔷- In the 1st quarter of 2026, GDP growth rebounded to 1.6% after dipping to 0.5% in the 4th quarter of 2025. That acceleration was due to the ending shutdown. Personal consumption has slowed to 2.3% year-over-year while private fixed investment has accelerated as the AI investment boom continues. On the supply side, productivity growth – running well above its recent historical norm – is enabling the seeming paradox of an economic expansion nearly bereft of job growth.
🔷- After a six-year period (2020-2025) in which real consumption has averaged a robust 2.9%, the US consumer finally seems to be tiring, as we expect 1.9% in 2026 and 1.8% in 2027. While households have been decelerating their real consumption growth, real wage growth has been slowing even faster (and job growth has slowed as well), causing spending growth to outstrip household income.
🔷- After the shock from energy prices and tariffs recedes, we expect inflation to drop to 2.3% in 2027 and an average of 2.0 over 2028-2030. Unlike the supply shocks of 2021-22, the current oil price shock is smaller in scope, expected to be much shorter-lived, and comes in a backdrop of considerably weaker aggregate demand. We expect the 10-year Treasury to average 4.4% this year, its highest average since 2007. In our view, substantial further interest rate cuts will be needed to drive longer-run borrowing rates down and thereby support continued robust economic growth. Another 1.00 percentage points in Fed funds rate cuts through 2028 should drive the 10-year yield to an average of 3.5% by 2029, which is our long-run expectation.
Schwab Market Perspective
🔷- In a September 2023 report, we pondered the idea that the Great Moderation Era – the two decades leading up to the pandemic marked by disinflation, suppressed volatility and cheap access to goods, energy, and labor – had concluded, giving way to a backdrop akin to what we experienced in the 1960s until the 1990s, which we labeled the Temperamental Era. In that report, we hypothesized that a new secular backdrop had emerged – one in which inflation is more volatile, the geopolitical landscape is increasingly unstable, and supply shocks are more frequent and powerful. Nearly three years later, it appears that a new version of the Temperamental Era is no longer a hypothesis, rather it’s a new operating environment.
🔷- In 2023, we noted that economic forces were “GELing” together in the Great Moderation Era, made possible via abundant and cheap access to Goods, Energy, and Labor – courtesy of globalization, the U.S. shale boom, and China’s entry into the WTO. We expected all three ships to keep sailing, but with more chop. Yet, on all three fronts, the chop arrived faster and more furious than we could have anticipated. Within goods, tariffs have been the most visible force. The effective U.S. tariff rate surged from a low of 2.2% at the start of 2025 to a peak of 10.8% in October 2025 – the highest level in nearly a century. The energy sector has seen an equally volatile backdrop, with the February 2026 U.S. strikes on Iran – and attendant halting of traffic through the Strait of Hormuz- helping send oil prices to their highest since Russia invaded Ukraine in 2022.
🔷- Governments around the world and across the political spectrum are running large deficits while their economies are at or near full employment. Industrial policy – subsidies, domestic content requirements, reshoring incentives, etc – is no longer a fringe idea, but (at times) a bipartisan framework. Trade policies have moved from rules-based multilateralism toward managed bilateralism. Central bank independence has come increasingly under the microscope, facing heightened political pressure. The “Fed put” is conditional and might not function as investors have long assumed. Those accustomed to a central bank backstop should have open minds given inflation has been above the Fed’s target for five-plus years and higher tariffs are likely here to stay
What GFP is saying with info from the above:
🔷- The 2nd bullet from Morningstar mentions how spending growth is outstripping household income. While our typical response to that would be just the average American spending, whether we have the funds or not. Digging deeper, what actually is happening is that Baby Boomers are helping out younger generations either by paying rent, covering daycare expenses, helping with down payments, etc allowing for spending that might not otherwise occur. The wealth inequality the previous Fed regime created is slowly being recalibrated internally.
🔷- The 3rd bullet from Schwab reinforces a view we shared a few quarters back, that is, we are in an era of fiscal dominance (governments will continue to deficit spend and “run it hot”). While that will spur nominal growth and asset prices, we do worry about inflationary pressures and the dollar’s standing. The Fed is more impotent in this type of environment. We are pleased that the new Fed Chair Warsh has decided to stand firm against political pressure and not lower interest rates. It is paramount that a country’s central bank maintain its independence from the governing authorities; otherwise, the road to a banana republic may come sooner than we fear.
This is Life
Could AI Make Your Life a Little Easier?
By: Patrick Guinet , CIMA®
Artificial Intelligence—or AI—is everywhere these days. Turn on the television, browse the internet, or read the news, and chances are you'll hear someone talking about it. For some people it's exciting. For others, it's confusing. If you're somewhere in the middle, you're not alone.
One of the things we enjoy most is helping people make sense of things that can seem complicated. Whether we're talking about wealth management, retirement planning, investing, or simply a new technology that's becoming part of everyday life, our goal is always the same—to make it understandable and useful.
We have the privilege of working with individuals, families, businesses large and small, endowments, and foundations. While every client is unique, they all share something in common: they want trusted advice and a team that puts their interests first.
The good news is you don't need to understand how AI works to benefit from it. Think of it as having a knowledgeable assistant available whenever you need one. You simply ask a question in plain English, and it responds.
Planning a vacation? AI can help create an itinerary based on your interests and budget. Standing in front of the refrigerator wondering what's for dinner? It can suggest recipes using the ingredients you already have. Trying to understand a complicated topic? AI can explain it in plain English and answer follow-up questions until it makes sense.
Like any technology, AI isn't perfect. It can make mistakes, so always verify important financial, tax, legal, or medical information with qualified professionals. And never enter sensitive personal information unless you're comfortable with how it will be protected.
We've always believed the best decisions come from people working together. Technology can make us more efficient and provide better information, but it will never replace listening, collaboration, and understanding what's important to the people we serve. That's true in wealth management, and it's true in life.
AI isn't about replacing people. It's about making everyday life a little easier. If it saves you twenty minutes planning a trip, helps answer a question, or explains something you've always wondered about, that's time you get back to spend with the people and activities that matter most.
One of the things we're most proud of isn't simply the advice we provide—it's the way we work together. Every client benefits from the experience, perspectives, and commitment of our entire team. We believe that's how better decisions are made and how stronger, longer-lasting relationships are built.
Whether we're helping a family prepare for retirement, advising a business owner, serving an endowment or foundation, or simply sharing ideas that might make everyday life a little easier, our purpose remains the same: to help people move forward with greater confidence.
One of life's greatest luxuries isn't money—it's time. If technology helps us reclaim even a little of it, that's a tool worth exploring. More importantly, we hope it gives you more time to spend with the people who matter most.
Thank you for allowing us to be part of your journey. We look forward to continuing to serve you and your family for many years to come.
Education to Empower You
A new type of investment account for children, known as a Trump Account (also referred to as a 530A account), officially launched in July. Since many families have questions about how these accounts work and whether they fit into a broader financial plan, I wanted to share a few key facts.
1- Most children under 18 may be eligible. Children under age 18 with a Social Security number may be eligible to have a Trump Account opened for them. However, certain benefits, such as the one-time $1,000 government contribution available to some eligible children, have additional eligibility requirements.\
2- Some children may qualify for a one-time $1,000 government contribution. Children born between January 1, 2025, and December 31, 2028, may be eligible for a one-time $1,000 contribution from the U.S. Treasury after an account is opened and eligibility is confirmed. Additionally, some of these children may also qualify for charitable contributions through separate programs if they meet specific criteria. These contributions must be made in equal amounts to every eligible account beneficiary in a given state or area or born in a given year.
3- Families can make ongoing contributions. Parents, legal guardians, grandparents, relatives, and other individuals may contribute up to the annual contribution limit. In some cases, a parent or legal guardian’s employer may also contribute under certain rules. Contributions from employers count toward the annual contribution cap, while certain government and qualifying charitable contributions do not.
4- The investment options are limited. Unlike many other investment accounts, Trump Accounts are generally limited to investments in low-cost, broad U.S. equity index funds that comply with federal guidelines. This means account owners cannot choose individual stocks or more specialized investment options during the account's growth period
5- The accounts are designed for long-term investing. Funds generally remain invested until January 1st of the calendar year the child turns 18, with only limited exceptions for early distributions. The goal is to allow investments to grow over many years through long-term market participation.
6- The tax rules are unique. Family contributions are generally made with after-tax dollars, while some government, employer, or charitable contributions receive different tax treatment. Investment growth is tax-deferred, and taxation may apply when funds are eventually withdrawn under the applicable rules.
7- These accounts are one of several savings options. For many families, it may be helpful to compare a Trump Account with other vehicles such as 529 education savings plans, custodial accounts, or retirement-focused strategies. Each option has different rules, tax considerations, investment flexibility, and withdrawal provisions.
Since these accounts are new, additional guidance and clarification may continue to emerge over time. As with any investment decision, it's important to consider how a new account fits within your family's overall financial goals rather than evaluating it in isolation.
