Financial and Economic Brief - December 1, 2020by © Liberty Publishing, Inc.
Dow Breaks 30K – Is There a Higher Limit?
In March of 2020 the Dow experienced several crashes that dropped it significantly. Incredibly, the spring of 2020 had the three worst point drops in U.S. history. Pundits, pondered the economic whys of the downturn and many predicted that it would be many years, if not decades, before recovery would take us to prior highs. And yet, in spite of Covid-19 restrictions and obstacles, the Dow soared within a matter of months, breaking its all-time record of 30,000.
The Fed’s Impact on Mortgage Rates and Acquisition of MBS
In the past, the party line among bankers was that the Fed’s control of the money supply had little to do with long term mortgage rates. However, and not coincidently, as soon as the Covid-19 Pandemic hit; the Fed started buying unlimited amounts of Mortgage Backed Securities (MBS). This action created a new competitor in the secondary market. Thus MBS grew more precious and mortgage rates declined.
The New SECURE Act Changes Required Minimum Distributions (RMDs) at Retirement Age
The Setting Every Community Up For Retirement Enhancement (SECURE) Act was passed in December 2019. There are several pieces of the legislation that may have broad reaching effects on how retirement funds are distributed as well as decisions about how beneficiaries are taxed when they inherit benefits from a decedent. You may need to do a complete review of your retirement strategy based on how the new legislation will affect your retirement strategy.