Today's Scoop:

Hey friends, happy Fed day.

Here’s what you need to know today…

1. The Federal Reserve raised interest rates, maybe for the last time.

2. Hiring picked up in April.

3. Companies aren’t raising wages as much.

S&P 500: 4,090.75
1Mo: -1% | 1Yr: -5% | 5Yr: +54%

The market sank lower today after the Federal Reserve’s policy announcement served up mixed messages.

The Fed raised baseline interest rates by 0.25% to 5.25% [🤓] and signaled that it could be the last rate hike, ending the most aggressive policy campaign to restrict the economy in decades. Fed Chairman Powell did leave the door open for more rate increases if inflation picks back up later in the year. For now, the Fed expects a slowdown, but not a recession, and for the banks and financial system to stay stable.

Hiring picked up in April. Payroll provider ADP reported businesses hired 296,000 new people last month, double what economists expected. The leisure and hospitality industry is still on a hiring spree, but financial and business services are cutting staff.

Companies aren’t as liberal with pay bumps this year. ADP’s report indicated wages declined in April, with median annual pay now up only 6.7% over the past year. ADP’s report only covers the private sector, so we’ll get the full picture from the Labor Department on Friday.

This rate hike means banks are earning over 5% on their deposits, so make sure your savings account is paying you something similar. [Toolbox Below🔨]

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• Ford’s sales are booming

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The Federal Reserve

The Federal Reserve, aka the Central Bank, aka The Fed, is in charge of our whole money system. When the economy is struggling, the Fed lowers baseline interest rates to make it cheaper for consumers and businesses to borrow and spend. The Fed also pumps more money into the system by buying bonds with new dollars that it essentially speaks into existence. The additional cash keeps the pipes flowing as the borrowing and spending heat up, stimulating economic activity.

Once the economy's strong enough to stand on its own, the Fed starts to raise interest rates and pull back some of that money to ensure the economy doesn't overheat. Inflation is the Fed's heat gauge, and the gauge has been reading hot.

So everyone's watching whether the Fed can dial up the economic restrictions quickly enough to slow inflation and cool the economy but not so quickly that it sparks mass unemployment.

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Here are our top priorities for today’s challenges:

1. Rising Rates & More Layoffs: Make sure you have an emergency savings in cash. Use SaveBetter to make sure your savings account pays you at least 4%.

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