What In The World Is Happening In The Economy

I bet you’re wondering, “What does a goofy bean counter know about economics?”

Have you noticed, leading economists are making all kinds of predictions.  Some very negative, some very positive, and most kinda in the middle. 

I’ve been in the business world for 48 years.  I’ve seen inflation go up and down; lived through one of the most incredible economic booms (1980s); seen top tax rates go from 70% to now almost exactly half that…37%, watched the fed rate climb and fall so many times I’ve lost count; seen the stock market hit all time highs over and over again and then repeatedly fall off those highs before going higher; I’ve lived as an adult through 9 different Presidents and now on the 10^th; I cannot remember a time that Congress actually got along with each other.  My point?  I think my “gut” is experienced and well refined enough to give me the ability to make some predictions of my own.

I see the labor market moving along about where it is now.  No big layoff rounds, no big hiring ones either.  Unemployment rate will stay around 4.5%, which, when I was in college, that rate was considered very healthy.

The federal funds rate, currently at 3.75%, may be at 3.5% by the end of 2026.  Which is just about as close to “no change” as you can get.  If you were waiting for significant drops in mortgage rates before going out and buying a new home, new equipment, new vehicles, etc., forget it.  Current rates are actually very good, and you should move forward with any borrowing plans now. 

Inflation is in a good place right now too.  Yes, there are various temporary spikes in commodities such as gas, etc. but overall, your purchasing power is not eroding fast like it did just a few years ago.  A big challenge is to stop living from paycheck to paycheck and start a savings habit.  Learn to live on less than your net take-home.  It doesn’t matter how much you make; it just takes the will power to change your lifestyle to fit that process.

The stock market is a fickle beast. Looking further out, the market usually rises about 8-14% each year.  Since it’s been flat for the last 6 months, logic says it’s about due for a breakout.  Keep your eye out for sustained rises that will signal a new bull market.  The 2^nd half of 2026 could see some potential big gains.  If you’re planning on doing some ROTH IRA conversions, now might be the lowest point in the market for this year.  If you have some extra cash, now might be a good time to put it into the market.

Collectibles like Gold, Silver, and Crypto are emotionally driven.  When folks are worried, these prices tend to go up, when people are feeling good about life, these values tend to go down.  Ask yourself, what might happen on a global scale that might trigger folks feeling better than right now?  Peace breaking out in Ukraine?  Peace breaking out in the Middle East?  China lowering its threat to invade Taiwan?  Stock markets rising, inflation staying tame, fed funds rates remaining stable, etc.?  Maybe it’s time to consider selling off some of these holdings before they drop in value?

Have you heard?  2 Chronicles 15:8a says, “When Asa heard these words and the prophecy of Oded the profit, he took courage,”

Kelly Bullis is a Certified Public Accountant in Carson City.  Contact him at 775-882-4459.  As well as on our website at BullisAndCo.com. You can also find us on LinkedIn and Facebook.