SoFi Blog

Monetary Policy and the Phillips Curve: Global edition.

We’ve seen a moderate increase in stock price volatility this June and early July as comments by European Central Bank president Mario Draghi about rolling back stimulus sent interest rates higher and equities lower globally. More recently, mixed data and comments by Federal Reserve Chair Janet Yellen sent U.S. interest rates back down slightly. A lot has happened in the markets, but looking at events in terms of how central bankers view the relationship between unemployment and inflation can help us make sense of this activity and what may happen going forward.

A wealthy real estate mogul recently told millennials to stop buying avocado toast if they ever want to buy a house, and the internet went berserk. The advice was poorly received, because many felt that it was out of touch with the current financial environment. For one, the millennial generation has only ever known income stagnation, wages that haven’t kept up with inflation, and skyrocketing college and real estate prices. Two, the assertion that we can’t stop shelling out for fancy breakfast foods buys into the shallow narrative that millennials don’t know the meaning of hard work or the value of a dollar.

While I largely side with the outraged denizens of the interwebs, I’ll play devil’s advocate here: Clearly, Avocado Man was hoping to make a point about frivolous spending, but he veers off track when making the assumption that this is a trademark of the millennial generation. Current times have seen people of all ages spend more on “stuff” than ever before.

Think about your best memories of your parents while you were growing up for a moment. Maybe it’s the year they finally bought that bike you wanted for your birthday, or all the times you opened the freezer to see it stocked with mint chocolate chip ice cream, because mom knew it was your favorite.

It’s worth pondering as you take in your parents now, as they grow older. You might be wondering when you’ll be returning the favor of taking care of them, and more importantly, how.

A Closer Look at the State of the U.S. Economy

It’s been a relatively quiet month for the market. Equities and fixed income continue to grind higher as investors doubt a near-term revival in inflation. And, with little expectation that tax cuts will be implemented this year, the markets have taken little notice of the relentless political drama coming out of Washington. Given the lack of major market events, we’re taking a step back to focus on the unique state of the U.S. economy right now, how the Federal Reserve might respond, and what it means for the market.

Finding your dream home can be tricky, especially in a tough real estate market. Currently, home sales are falling nationwide due to a housing shortage that’s keeping prices high, making the process especially thorny. That’s why so many people are turning to home renovations to convert an eh, it’ll do house into a dream home. In fact, according to a survey by HomeAdvisor, home renovation spending is expected to continue to rise in 2017, with 80% of homeowners planning projects in the next 12 months.

Kate McKeon was one of those people. After growing up all over, from Sacramento to Europe, McKeon went to the University of Southern California to get her bachelor’s degree. She thought she was ready to become a Midwest girl during law school in Michigan, “then it got to be October,” she joked, and cold. She returned to L.A. in 2009, where she was ready to take another big step: Becoming a foster parent.