Investor's Playbook

📖Today’s Agenda

• Stock Market: FED Is Expected To Raise Its Inflation Targets

• Entrepreneurship: TOP 3 AI TOOLS OF THE WEEK

• Personal Finance: Building an Emergency Fund: Why It's Important & How to Start?

📈Stock Market

FED Is Expected To Raise Its Inflation Targets

With a singular focus the Federal Reserve has struggled to pull inflation down to its 2% target. By its own forecasts, US central bankers won’t complete the mission until 2026. The dedication to a yearslong journey has cemented the idea that rates will stay higher for longer or that even more drastic rate hikes — and possibly a recession — will be required to achieve an elusive 2%.

While reaching that goal has long been entrenched in the Fed’s mission and public commitments, the costs of doing so have invited some calls to aim for a more realistic goal, fit for the current moment: raising the inflation target.

The main argument for upping the desired rate boils down to the difficulty in trying to get down to 2%. Fed officials would have to knock the economy so forcefully, the thinking goes, they would likely spark a recession to get there — as stubborn winds blow in the face of its inflation fight.

But central bankers have resisted such calls, with one Fed official even saying the implications could be disastrous.

Stash Graham, managing director at Graham Capital Wealth Management, said the primary criticism of the inflation goal is that 2% is a long-term target that might not be realistic for the near-term time horizon. While rate hikes have cooled demand in many areas of the economy, supply-related shocks that are beyond the control of the central bank are reverberating. From the escalating violence in Gaza, which could trigger a broader conflict, to ongoing labor strikes, there’s a host of issues that could prevent the Fed from reaching its target.

Market observers who have argued for the Fed to tweak its target contend that a goal higher than the current 2% would give the central bank more flexibility. With added breathing room the Fed wouldn't have to keep raising rates or keep them as high for longer. And the economic pain that comes with rate hikes — from job losses to more expensive household borrowing to sluggish growth — wouldn’t be as acute.

Joshua Ryan-Collins, an economics professor at UCL’s Institute for Innovation and Public Purpose, said the paradigm of prior decades worked in an environment of low inflation and stable growth.

But the disruptions unleashed by COVID and by the Russian invasion of Ukraine have shown that model is not sustainable. “If central banks really want to deal with modern-day inflation they have to rethink their approach on the drivers of inflation and worry less about the short-term demand side,” he said. "The bigger issue is supply-side inflationary shocks, which are going to keep coming and going to get worse.”

🎯Entrepreneurship

TOP 3 AI TOOLS OF THE WEEK

1. AI Agent

TEXT TO AI ASSISTANT

With its powerful features, you can save time and energy building complex applications with ease and access advanced features like AI analysis and automation. Additionally, you can speed up your competitor research in order to gain insights for better strategies. With AI Agent, you can make sure to stay ahead of the competition with the latest AGI technology.

2. Browse AI

DATA ANALYSIS / WEBSITE ANALYSIS

Browse AI is a great tool for all types of analytics, research and data gathering tasks. By having the ability to quickly search, extract and compile data from multiple sources, it can save you a lot of time and energy. It can also be used for competitive analysis, monitoring market trends, understanding customer behaviour and more.

3. Folk

CRM / PROJECT MANAGEMENT

Folk is a great asset for companies looking to stay ahead of the competition. It can be used in numerous cases, such as marketing and communication, sales, and analytics. With Folk, you’ll be able to streamline your workflow, improve customer relations, and analyze data to better serve your customers. A perfect tool for businesses of any size - you can’t go wrong when using Folk.

💸Personal Finance

Building an Emergency Fund: Why It's Important & How to Start?

Life is full of surprises, and emergencies can happen when we least expect them. Whether it's a sudden medical expense, a car repair, or a job loss, having a financial safety net can make a world of difference. That's where building an emergency fund comes in. In this blog, we will explore why an emergency fund is crucial and provide simple steps to help you start building one.

Why is an Emergency Fund Important?

An emergency fund is a pool of money set aside specifically to handle unexpected expenses. Here are three key reasons why having an emergency fund is essential:

Financial Security: An emergency fund acts as a safety net, providing you with financial security during challenging times. It allows you to cover unforeseen expenses without resorting to high-interest loans or going into debt. Having this financial cushion brings peace of mind and reduces stress.

Avoiding Debt: During emergencies, many people turn to credit cards or loans to meet their immediate needs. However, relying on debt can lead to long-term financial struggles. With an emergency fund in place, you can avoid borrowing and the accompanying interest payments, ensuring your financial stability remains intact.

Quick Recovery: Emergencies often require prompt action. With an emergency fund, you can address unexpected expenses immediately, whether it's a medical emergency or a home repair. Having funds readily available allows you to recover faster and resume your normal life without major disruptions.

How to Start Building an Emergency Fund?

Now that we understand the importance of an emergency fund, let's discuss simple steps to begin building one:

Set a Realistic Goal: Start by setting a realistic savings goal for your emergency fund. Aim to save at least three to six months' worth of living expenses. While this may seem daunting, remember that every small contribution adds up over time.

Create a Budget: Track your income and expenses to identify areas where you can cut back and save more. Create a monthly budget that includes a designated amount for your emergency fund. Stick to your budget and prioritize saving for emergencies.

Automate Savings: Make saving a habit by automating your savings. Set up an automatic transfer from your salary account to a separate savings account dedicated to your emergency fund. This way, a portion of your income will be saved before you have a chance to spend it.

Start Small and Be Consistent: Start with small, manageable contributions to your emergency fund. Consistency is key. Even if it's a small amount, regularly contribute to your fund. Over time, you'll see your emergency fund grow steadily.

Avoid Temptation: Stay committed to your emergency fund by resisting the urge to dip into it for non-emergency expenses. Remember its purpose and the peace of mind it brings. If you do use the funds for an emergency, make it a priority to replenish it as soon as possible.

Building an emergency fund is a vital step toward achieving financial stability and peace of mind. Start by setting a realistic goal, creating a budget, and automating your savings. Be consistent in your contributions, even if they are small.

By having an emergency fund in place, you'll be better prepared to handle unexpected expenses without falling into debt or financial hardship. Start today and take control of your financial future.