2023 Q2 In Review - Integrity Wealth Advisors, Ventura & Ojai, California

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ECONOMIC CHARTS & NOTES CONSUMER PRICE INDEX The pace of consumer price increases has cooled, but shelter and used vehicle prices continue to rise significantly. Falling energy prices are the main driver of cooling inflation. CONSUMER SPENDING Real disposable income has increased five straight months amid wage gains and moderating inflation. The key Fed inflation figure (PCE) rose slightly last month as Americans spent more on services than highpriced goods. Y/Y % Chg 8% 7% 6% 5% 4% 3% 2% 1% 0% CPI Less Food CPI All 2018 2019 2020 2021 2022 % Chg Year-over-year 30 25 20 15 10 5 0 -5 -10 -15 -20 -25 Jan '19 Jul '19 Consumption Jan '20 Jul ' 20 Jan '21 Jul '21 Disposable Income Jan '22 Jul '22 Jan '23 Source: U.S. Bureau of Labor Statistics Source: U.S. Bureau of Economic Analysis JOB OPENINGS & HIRES Retail hiring is down from last year with inflation and credit card rates impacting shopper behavior. Finding qualified candidates has also been a challenge for the retail, construction, manufacturing, and transportation sectors. Retail Openings Retail Hires GDP First quarter GDP was revised sharply higher due to upward adjustments in consumer spending and inventories. A 8.7% boost in Social Security cost of living likely had a big impact on spending. GDP Amount in Thousands 1500 1200 900 600 300 0 Jan '18 Jul '18 Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 % Growth 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25% -30% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q4 Q2 Q3 Q4 Q1 2018 2019 2020 2021 2022 2023 Source: U.S. Bureau of Labor Statistics Source: U.S. Bureau of Economic Analysis
Inflation has eased as rate-hiking cycle nears an end INFLATION HAS EASED AS RATE-HIKING CYCLE NEARS AN END 2023 Q2 IN REVIEW Inflation, still elevated, is less fierce Annual consumer price index (%) 12 United Kingdom 10 Eurozone 8 United States 6 Japan 4 2 0 Estimates Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jul-24 Markets expect a decline in rates over the next year Federal funds rate — Actual and market implied (%) 6 5 4 3 2 1 Fed funds target rate Market-implied effective rate as of 5/31/23 0 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 It may not feel like it at the grocery store, but inflation is well above the U.S. Federal Reserve’s 2% target, but “We knew there would be consequences to one of the on It may a downward not feel trajectory like it at the in the grocery U.S., Europe store, and but inflation many is monetary on a downward policy often works with The long recent lags, U.S. so banking the full turmoil most could aggressive also help tightening slow economic campaigns growth in history,” as says other trajectory markets. in the That’s U.S., largely Europe due and to lower many energy other prices, markets. That’s impact largely of rate hikes due to should spread some through banks may the rest become of more fixed cautious income portfolio and reduce manager their Pramod lending Atluri. activities. “The fewer lower supply energy chain prices, disruptions fewer supply and a chain steady disruptions series of and the a steady economy series over of time. Taken together, these factors dislocations have significantly we are seeing changed in the financial markets signal interest rate hikes by central banks. a painful new phase for the Fed. It has clearly exposed interest rate hikes by central banks. The recent U.S. banking turmoil the could interest also rate help outlook. slow some vulnerabilities and, as a result, I believe we are Interest rate-sensitive industries such as housing are economic growth as some banks may become more nearing the end of this rate-hiking cycle.” already Interest feeling rate-sensitive the effects, industries with home such prices as falling housing are already cautious feeling and reduce the their lending Everyone activities. knew Taken there would be consequences to one of the most aggressive in effects, some formerly with home hot prices markets. falling Inflation in some still remains formerly hot markets. together, Inflation these factors still have significantly tightening changed cycles in history. The dislocations we are seeing in the financial remains well above the U.S. Federal Reserve’s 2% target, the but interest monetary rate outlook. policy markets signal a painful new phase for the Fed. It has clearly exposed some often works with long lags, so the full impact of rate hikes should spread vulnerabilities and, as a result, we believe we are nearing the end of this ratehiking Statistics, cycle. Japanese Statistics Bureau & Statistics Center, International Monetary Fund. through the rest sources for left chart: of the Capital economy Group, FactSet, over time. Bureau of Labor Statistics, Eurostat, UK Office for National Data as of June 5, 2023. Consumer price indexes for each region provide a measure of the average change over time in the prices paid for a basket of consumer goods and services. sources for right chart: Capital Group, Bloomberg Index Services Ltd., Refinitiv Datastream, U.S. Federal Reserve. Fed funds target rate reflects the upper bound of the Federal Open Markets Committee’s (FOMC) target range for overnight lending among U.S. banks. As of May 31, 2023. SOURCES FOR LEFT CHART: Capital Group, FactSet, Bureau of Labor Statistics, Eurostat, UK Office for National Statistics, Japanese Statistics Bureau & Statistics Center, International Monetary Fund. Data as of June 5, 2023. Consumer price indexes for each region provide a measure of the average change over time in the prices paid for a basket of consumer goods and services. SOURCES FOR RIGHT CHART: Capital Group, 3 Bloomberg · MIDYEAR Index OUTLOOK Services Ltd., 2023 Refinitiv Datastream, U.S. Federal Reserve. Fed funds target rate reflects the upper bound of the Federal Open Markets Committee’s (FOMC) target range for overnight lending among U.S. banks. As of May 31, 2023.
Page 1 and 2: iwaplan.com Q2 2023 IN REVIEW
Page 3: THE NEW REALITY FOR INVESTORS 2023
Page 7 and 8: INVESTORS MAY BE WISE TO PUT CASH T
Page 9 and 10: INVESTMENT COMMITTEE 2023 Q2 IN REV
Page 11 and 12: STEP 3: PAY DOWN NON-DEDUCTIBLE HIG

2023 Q2 In Review - Integrity Wealth Advisors, Ventura & Ojai, California

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