Federal Reserve Warns on Interest Rate Expectations
The Federal Reserve adjusted expectations for interest rate cuts in 2025. Persistent inflation has forced them to reconsider making as many cuts as originally expected. If the economy weakens more than current expectations, they may add those cuts back in. However, at the moment, the strength of the US economy doesn’t point to rates getting much lower. Both stock and bond markets reacted negatively to this news.
Bonds Show Real Value
To refresh your memory, stocks represent ownership in businesses, while bonds represent loans to businesses and governmental entities. Right now, bond yields (interest) are equal to the value that is indicated by the current earnings (profits) of stockholders. The last time these numbers were equal was 2002, at the end of the dot.com selloff. This means that bonds are undervalued relative to stocks and may improve portfolio returns. Generally speaking, bonds rise when stocks fall, although this is not always the case. Having some bonds in your portfolio will provide you with reserves that can help you get through the next financial crisis.
Personal Finance: Watch Out for Impersonation Scams
One of the most common ways criminals steal identities is through impersonation scams. In an impersonation scam, a person calls claiming to be an Amazon delivery driver, your credit card company, the IRS, your insurance provider, etc… They claim that something is wrong (i.e. – payment method) and need your help to correct the problem. The individual then asks for your credit card number, your Social Security number, etc… Don’t fall for this trick. If you are unsure, hang up and find a phone number from your account information and call back using that number.
Beneficial Ownership Information Report (BOIR) – Who Needs to Report? When?
In 2021, Congress enacted the bipartisan Corporate Transparency Act to curb illicit finance (e.g. money laundering). This law requires many companies doing business in the United States to report information about who ultimately owns or controls them.
Beneficial Ownership Information Reporting requirements became effective 1 January 2024. Businesses formed before January 1, 2024, were to have filed by January 1, 2025. Companies formed after January 1, 2024, must file within 90 days of formation. Business owners who are required to file and neglect to do so file face a $591 daily fine!
Who needs to file? In general, if you have a business with a separate name that you set up with a state or the federal government to establish a separate business entity (e.g. LLC or S Corp), you probably have to file. If your business name is your name and the business ID is your Social Security number, you probably don’t have to file. But check the website below to be sure.
HOWEVER . . . . the BOIR legislation is currently tied up in federal court AND a recent federal court order states that reporting companies are NOT currently required to file BOIR’s and are not subject to financial liability if they fail to do so while the order remains in force.
All this to say, please be aware of this new legislation, its status, and how it might affect you IF it makes it through the court system. Since these new requirements are overseen by the U.S. Treasury Department, Financial Crimes Enforcement Network (FinCEN) and NOT the Internal Revenue Service (IRS), chances are you will not be contacted by your tax preparer or tax advisor regarding the status and requirements of BOIR.
Please see the following website to learn more about the requirements and status of the Beneficial Ownership Information Report (BOIR). If you want to go ahead and voluntarily file this report just to be safe, it’s easy to do from this same web page. This is our recommendation.