3 Keys to the Week - June 11,2021

For the third week in a row, the markets remained relatively calm, even as inflation concerns continued to rise. Additionally, recent news from major airlines painted an optimistic picture on domestic travel and Congress began the early stages of making updates to the Secure Act.


1. Inflation – The Consumer Price Index, representing a basket including food, energy,

groceries, housing costs, and sales across a spectrum of goods, rose 5% from one year

earlier, outpacing analyst expectations. This acceleration represented the fastest pace in

13 years. Even so, most experts believe that the Federal Reserve will not make any near-

term policy changes as a result of these numbers, since some of the inflation is artificial,

as it is being compared to the year-ago period when much of the economic activity

remained restricted due to pandemic precautions.


2. Air Travel – Domestic leisure travel has reached pre-pandemic levels, as multiple major

airlines reported encouraging numbers. Delta said it expects a full restoration of

domestic leisure travel in June, up from 60% in March, and American Airlines reported

that their 7-day moving average of net bookings was about 90% the level in the same

period in 2019. While business and international travel still have ground to make up,

these recent numbers paint a positive picture for the travel industry.


3. Retirement Changes – The House and Senate unveiled two separate bills, aiming to

build on many of the retirement concepts introduced by the Secure Act in 2019. While

the two versions had some discrepancies on how the proposed features of the plan

would be paid for, they both focused on a few key elements:


  • Student Loans – Would enable employers to make contributions to 401(k) plans (and similar workplace plans) on behalf of employees who are making student loan payments instead of contributing to their retirement plan.


  • Catch-Up Contributions – While the amounts differ, both bills propose increasing the annual catch-up contribution limits for retirement plans for those who qualify.


  • Required Minimum Distributions – The age at which an individual would be mandated to begin RMDs would be increased under both proposals.


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Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.

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