Gravity can be defined as a force that pulls two objects with mass toward each other, or more commonly, the force that makes things fall to the ground. Throughout the bull market of the past two years, there have been many forces that could have, and perhaps should have, acted as a gravitational force on markets — yet major stock indices rose to new all-time highs and defied gravity.

The debate over whether we’ll have a soft landing or hard landing has shifted — we’re now debating just how soft the landing will be, or whether there will be a landing at all. Hard landing narratives have left the chat, and optimism has permeated investor sentiment. Those trends were mostly in place before the U.S. presidential election, and have been fueled even more since then as we learn just how powerful political forces can be.

The New Year is an opportunity to start fresh and see our portfolios with new eyes. Of course, we always need to be aware of the risks, but we can’t invest by waiting for historical precedent to repeat in the same ways it has before. I, for one, have had to learn that lesson over and over throughout this cycle, as history has been a poor guide for what’s transpired. The trends remain strong, the economy has stayed on stable footing; and perhaps most importantly for markets, the buyers are still buying. For now — don’t fight it, ride it.

The Roar of 2024

The past year brought with it the beginning of the Federal Reserve’s rate cutting cycle, the continuation of an AI-fueled rally, an unemployment rate that rose above 4% for the first time since 2021, a wild election cycle, a Japanese currency scare, and a Treasury yield curve that finally re-steepened after its longest inversion ever.

Despite all the drama, the S&P 500’s biggest pullback for the year was 8.5%, considerably less than the average intra-year drawdown of 13%. A post-election relief and risk-on rally drove markets even higher, pushing the idea of a pullback even further from investors’ minds.

Nevertheless, there were a few noteworthy stocks that saw intra-year drawdowns much larger than that: Nvidia (-27%), Tesla (-43%), Super Micro Computer (-85%), and Dollar General (-55%). With the exception of Dollar General, all of those stocks are strongly positive year-to-date, showing how much price volatility there’s been this year.

The AI theme continued to power markets forward as the potential for increased productivity and innovation kept momentum intact. That said, the pace did slow as the year progressed, with investors increasingly looking for margin expansion and tangible profit to justify the large amounts of spending that has been directed toward AI. This resulted in a rotation into other areas of tech (i.e. software, but more on that later) and across different parts of the equity universe as investors search for other growth opportunities.

As for bond markets, the most notable aspect of 2024 was how much Treasury yields moved, with the 2-year yield surpassing 5% in late April, only to fall 150 basis points by the end of September. The 10-year saw similarly huge moves throughout the year, and the spread between the 2- and 10-year yield turned positive (i.e. un-inverted) for the first time since July 2022.

Contrary to conventional wisdom, stock market performance has been relatively unperturbed by the yield curve volatility, leading pundits to increasingly dismiss the shape of the curve as a useful indicator of anything ominous. I am not convinced that it should be ignored.

The persistence of buying appetite, both from investors and consumers, has kept the bull market rolling. We enter the holiday season and a new year with very little gravity pulling us down.

Rolling Into the First Half of 2025

2025 could prove to be the third year of this bull market run, but the age of the bull market tells us very little about how long it may last. Throughout history, we’ve seen bull markets that lasted less than two years, and others that lasted longer than 10. Knowing that the S&P was up 26% in 2023 and is likely to finish 2024 near or above that mark, it’s easy to wonder if all the juice has already been squeezed out.

What we found, however, is that even after consecutive strong years, the market can still do well — maybe not >25% well, but high single digits to low double digits well. It’s important to note that on average the strongest performance comes after negative years, but the blue and yellow bars below do not ring any alarm bells.

Current index levels present valuation risks and investors should be prepared for a more muted year of returns relative to 2023 and 2024, but we believe 2025 will still present opportunities and new ways to put money to work. We expect four pillars to support markets in the first half of the New Year, suggesting a friendly environment for earnings growth, and one that carries forward the current optimistic economic and business sentiment.

Pillar #1: Liquidity Spigot

The year could get off to a raucous political start as the debt ceiling limit will be reinstated on January 1. Once that happens, the Treasury will not be able to issue new debt until Congress raises the ceiling, which we do not expect to happen with any quickness.

Fear not, there is money available in the Treasury General Account (TGA) to cover spending in the meantime. In fact, estimates suggest the Treasury will have enough financial flexibility to cover expenses until the summer… even more reason why raising the debt ceiling is not an immediate threat to markets.

This means a few things: 1) Even without new debt issuance, money from the TGA will effectively boost market liquidity, 2) these available funds allow the Fed to continue on its quantitative tightening (QT) path, theoretically until mid-2025, 3) despite QT, bank reserves are likely to remain above the “scarce” range until then, which quells liquidity concerns.

Markets like liquidity, and many would argue the rally we’ve seen since late 2022 has been driven at least in part by liquidity being pumped into the system. Conceptually, there could be harsh consequences of this (i.e. reigniting inflation, excess government debt burden, increased interest expense), but so far those have not come to pass. In the first half of 2025, liquidity is still expected to be flowing enough to support markets.

Pillar #2: Strong Labor → Productivity → Cooling Wage Pressure

For much of 2024, markets feared a weakening labor market that could come with layoff announcements and an unemployment rate rising to uncomfortable levels. Since “promote maximum employment” is one of the Fed’s two mandates, a weak labor market would have strongly influenced the rate path. Long story short, that didn’t happen.

Instead, what we are in the midst of is a labor market that has slowed down and shown less churn, but remained stable and resilient. (By labor churn we mean things like the quits rate and the hires rate, both of which have declined steadily since 2022, but fell below pre-pandemic levels in 2024.)

The reason this matters is that it has helped reduce wage pressure that was fueling some inflation fears, and perhaps more importantly for 2025, because lower labor churn can power higher labor productivity. Fewer people moving around means people staying in jobs longer, which means a more efficient and productive workforce. In fact, current labor productivity is running slightly above 2%, which is higher than the non-recessionary average of about 1.4%. Higher productivity contributes to real growth in an economy.

Moreover, the chart below shows that measures of labor churn tend to lead wage costs by roughly six months. Since labor churn has fallen, we would expect wage costs (the dashed line) to continue falling as well.

As long as inflation remains under control or continues cooling, lower wage growth is not broadly detrimental to consumers. And if wage growth is falling, company labor costs are also coming down, putting less pressure on their bottom lines and allowing margins to stay stable or even expand. From an investor’s perspective, margins are critically important to earnings growth and return potential, so if this dynamic remains in place, it’s another supporting element for equity markets into 2025.

Profit margins for S&P 500 companies are currently running at trend, which is a healthy and balanced place to be, albeit lower than what we enjoyed between Q3 2021 and Q4 2022.

As an added tailwind, the new administration is expected to bring with it a looser regulatory regime, which could serve as a boost for industries such as financials, energy, and metals and mining, allowing for margins to expand.

Over time, we could also add AI and innovation to this supporting pillar as business innovation drives further productivity and profitability… but at this juncture that’s still a future force more than a current tangible reality.

Pillar #3: Inflation Under Control

We’ve come a long way from a Consumer Price Index (CPI) of 9.1% in June 2022 down to 2.7% for November 2024, which has calmed many anxieties. There are still elements of inflation that remain bothersome, namely shelter and car insurance, but many of the major components have cooled enough to satisfy markets.

The Fed’s preferred measure of inflation – the core Personal Consumption Index (PCE) – currently sits at 2.8%, down from a high of 5.6% in February 2022. Again, major progress has been made, and although not quite at the Fed’s 2% target, markets seem satisfied.

The important piece of this pillar is that inflation expectations stay under control, which could be tricky in 2025 with the prospect of increased tariffs and the level of optimism markets are exhibiting (see “What Could Go Wrong” later in this piece). This is perhaps the most questionable pillar in the pack, as inflation expectations have risen since late summer and the potential for the Fed to pause its rate cutting cycle has risen alongside.

We do expect the Fed to continue cutting rates, but at a much slower pace than originally thought. We also expect there to be adjustments made to the Fed’s projections on the neutral rate – not only the level, but the timeframe over which it may be met. If markets can remain comfortable with a higher neutral rate and a more gradual cutting cycle, inflation may not present too many problems.

In this case, the simple lack of a reignition in inflation would be a positive for markets.

Pillar #4: Sentiment has Momentum

Vibes are a powerful force for investor psychology, and although they are difficult to measure and can be fleeting, they are a force to be reckoned with when it comes to momentum. With the exception of a few blips here and there, market momentum and sentiment has been positive and pushing markets higher. We expect that trend to still have legs into 2025.

The main measures of consumer vibes are the sentiment surveys — namely, the Conference Board’s Consumer Confidence and the University of Michigan’s Consumer Sentiment surveys. In the first half of 2024, there were worries about higher than expected inflation and a slowing economy, which pushed both survey measures lower into summer. But there’s been reasonably steady improvement since then, which could continue if the labor market remains stable and the outlook for growth in 2025 stays strong. Watch for the trend to stay intact on both of these metrics.

Other major surveys that can give us a pulse on how businesses are feeling include the NFIB Small Business Optimism survey and the Purchasing Managers’ Index (PMI). These have also shown recent signs of improving, with November’s Small Business Optimism survey showing the largest single-month improvement in sentiment since July 1980.

One of the clear signs of improvement over recent months has been the U.S. economic surprise index, as data pertaining to GDP growth, consumer spending, jobs, and inflation has generally come in better than feared.

Post-election, the combination of positive economic surprises, certainty around the election outcome, and the expectation of a friendlier regulatory and capital markets environment could drive business sentiment higher from here.

For small businesses, the level of interest rates will be critical to sentiment and a gradual move down would be helpful. For larger companies, tariffs and U.S. dollar strength are critical components to future prospects. We are keeping a close eye on all of these indicators for confirmation or denial of our sentiment thesis.

What it all means for Equities

While sentiment and momentum can wield a lot of power, fundamentals are the key to market direction over longer term periods, which brings us to earnings. Earnings expectations for 2025 are strong – some might say too strong – but even if revised down slightly, companies still look to be in better shape than in 2024.

The drivers of earnings growth are important to note here. Technology is still at the top of the heap, but other sectors such as Health Care, Industrials, and Materials find themselves in new leadership positions if these forecasts come true. Also of note is that two of those three fall into the “cyclical” category and could be beneficiaries of the pro-growth sentiment that has materialized post-election.

But what about valuations? They’re high compared to history, that’s a simple fact. The S&P 500 is currently trading at 22.4x forward earnings, compared to the 10-year average of 18.4x.

Interestingly though, the average annual return on the S&P 500 is nearly 12%, and if earnings growth comes in over 14%, as expected, an average return on the S&P could actually result in a stable or lower price-to-earnings multiple before the end of the year, keeping bubble fears at bay.

In many ways, the fact that most investors do not expect another >25% year in the S&P is a good thing. If we were to produce a third year of rip-roaring returns, valuations would look even more stretched – if not exuberant – and likely drive volatility as investors try to manage exposures. An “average” year of returns may be what this market needs to stay rational.

What it all means for Yields

There’s been endless speculation on how high (or how low) Treasury yields will go. We don’t expect that to end in 2025. What we do expect though, is for yields to gradually come down as long as inflation stays contained.

A gradual drop in yields can be supportive of equities and sentiment, but contrary to expectations at the beginning of 2024, the Fed is unlikely to cut rates dramatically unless the economy weakens in a material way. This means markets and the economy may need to get (or stay) comfortable with a neutral rate that’s above pre-pandemic levels, and a 10-year Treasury yield that’s elevated as well.

Where Things Could Go Wrong

As with any new year comes new risks, or at least extensions of the prior year’s risks. To repeat a point from the beginning of this piece, we can’t invest by waiting for historical precedent to repeat. We do, however, have to keep in mind the risks we know exist as we allocate portfolios with the fresh eyes of January.

Risk #1: Sentiment Becomes Overdone, Speculation Overheats

We currently view the positive sentiment as a tailwind for markets that can continue into the first half of 2025, but there is a risk that sentiment could become over-extended and drive excess speculation in the financial system. There’s no hard-and-fast measure that can declare when we’re overheated, but something we like to track is the proportion of stock returns driven by earnings growth (i.e. fundamentals) versus multiple expansion (i.e. sentiment-driven upside).

The reason we track this is because the more of a rally that can be attributed to multiple expansion, the more fragile that rally can be. Some sentiment-driven upside is good as markets anticipate brighter days ahead, but it can turn into a chase as investors become greedy and start blindly buying risk assets.

The recent rally shows an increase in multiple expansion as a driver, but we could also argue that the business environment may change for the better in 2025 and might deserve the resulting upside.

Another way to look for excess speculation is through the lens of high quality vs. low quality asset performance. As investors increasingly pile into lower quality — therefore riskier — investments, speculation rises. One specific example of this is between mega-cap tech stocks versus those of non-profitable tech companies.

The recent outperformance of non-profitable tech stocks suggests investors have amped up their risk appetite, which is not a red flag in and of itself. Increased risk appetite could be warranted given some possible changes in the business environment in 2025 — but it’s a speculative move, nevertheless.

Lastly, much of the recent bump in sentiment has been predicated on the expectation of policies from the incoming administration that would reduce regulations, reign in government spending, and encourage stronger economic growth. Asset classes that have benefited from those expectations so far are financials, consumer discretionary, small-cap stocks, and crypto. On the flipside, there are some groups that have been hurt by new policy expectations such as health care, gold, and international stocks.

The concern is that if the expected policies do not come to fruition, or if they end up being different or less powerful than the market has priced itself for, we could see an unwind of the positive sentiment in some groups and a repricing in those that have been hit.

Expect policy volatility to continue in the first half.

Risk #2: Inflation Reignites → Fed Turns Hawkish → Yields Spike

It seems like a lot has to happen for this risk to materialize, but it could prove to be more possible than markets are appreciating. Inflation measures have come down considerably, but they’re currently stuck at levels above the Fed’s target.

If 2025 turns out to be one of stronger-than-expected consumer spending, and stronger-than-expected business investment, the resulting demand could again push prices higher. Moreover, if that’s happening with the backdrop of increasing tariffs and a reduction in the workforce due to lower immigration, costs could be driven up across multiple industries.

The possible reduction in supply and increased domestic demand could push inflation upward, and in turn pressure the Fed to stop cutting rates.

Yields are another aspect of this risk that can’t be ignored. Reheating inflation and a hawkish Fed could drive them higher, as well as the possibility of government spending remaining high while the budget deficit continues to grow. If the Treasury increases its issuance of debt, the market would need to find buyers to absorb that debt, thus pushing yields up further. The TGA can support us for a while, but not forever.

Risk #3: AI Fails to Be Monetized, Earnings Disappoint

This last risk we point out is more likely to be relevant for right now, but not forever. Eventually, we do expect AI to prove successful in various industries, but the theme is still in its infancy and it’s impossible to know how it may morph in the years to come.

Investors have already grown a bit impatient as it pertains to proof of profit for companies that have spent large amounts of CapEx on AI initiatives. In 2025, that scrutiny is likely to stick around and even increase. If companies are able to show real financial benefit, productivity, and innovation gains as a result of their AI-related spending, this risk dissipates. But if tangible results remain elusive, continued stellar earnings growth and stock price upside could also become elusive.

What Catches Our Eye in 2025

With this as a backdrop, here are a few areas we believe have tailwinds in 2025.

Software

•   May be poised for a catch-up trade versus semiconductors as investors search for new pockets of growth with a lower hurdle rate.

•   Could benefit from increased business capital expenditure in 2025.

•   We believe this could be a next-phase beneficiary of the AI theme — a conduit for how the concepts can be brought to life.

Gold

•   Institutional and international central bank appetite for gold is still strong, and it could further benefit from an increase in retail investor participation.

•   Global political uncertainty is likely here to stay, gold is typically a beneficiary of policy and currency volatility around the world.

Cyclical Sectors: Financials, Industrials, Energy, Materials

•   These may not produce the tech-like returns of 2023 and 2024, but a pro-growth environment with looser regulations could make 2025 a friendly cyclical environment.

Health Care

•   A contrarian pick, as we believe much of the bad news and risks are already priced in. Any improvement in sentiment could drive a repricing upward.

•   Expected to produce strong earnings growth in 2025, bested only by technology.

China

•   Another contrarian pick given the incoming administration’s well-telegraphed plans to limit China’s trade with the U.S., but we also believe much of the bad news is already priced in.

•   China’s sluggish growth may drive the country to announce more stimulus in 2025, and present an opportunity for upside.

Of course, if any of the above mentioned risks come to fruition, or other negative surprises occur, these investment implications would change. But absent a change in the investing or macro environment, we find these pockets of the market to be compelling.

Conclusion

The end of one year and beginning of the next is always a time for reflection and re-positioning. We believe 2025 has the potential to be a positive year for markets and the economy, albeit more muted than the past two years, and with its own set of risks and uncertainties.

This cycle’s economic and market resilience has been remarkable and is one for the history books. Looking back, in many ways it has been warranted. After all, the market is never wrong — it’s simply a reflection of investor sentiment and the outlook for growth prospects down the road. We choose optimism into 2025 and look forward to the new opportunities and surprises it will bring.

[Liz_footer_image]

SoFi can’t guarantee future financial performance, and past performance is no indication of future success. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite. Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Form ADV 2A is available at www.sofi.com/legal/adv.

Photo Credit: iStock/MicroStockHub

OTM2024121301

If you’ve bought anything on the internet lately, you’ve probably noticed a button offering to spread your purchase over several payments.

This is called “buy now, pay later,” or BNPL. Companies including Affirm, Klarna, and Afterpay let you buy a product home immediately while you pay for it over time. These loans result in a soft credit check, which doesn’t affect your credit score, making them appealing to people who are working to build up their credit.

In a report from the Consumer Financial Protection Bureau, 17% of survey respondents said they’d used a BNPL service in the last 12 months.

Apple (AAPL) made waves in February by announcing it would report its BNPL loans to Experian, one of the three major credit bureaus in the United States. Equifax, Experian, and TransUnion were hoping Apple’s competitors would follow suit, but so far, they have not.

The worry: Consumers could be taking on massive debt that’s invisible to banks and other lenders

The Divide

If scored in the traditional way, BNPL loans could hurt consumers’ credit scores, according to Affirm, Klarna, and Afterpay, who don’t want to report their loans to credit bureaus.

The credit bureaus, however, say that if they could account for BNPL loans, consumers could build their credit over time by making their payments on time, and lenders would have a more accurate picture of how much debt people are actually holding as BNPL basically means buying something on credit.

Credit bureaus and BNPL firms are discussing how the credit reporting system could be revised. Meanwhile, a former Klarna exec founded Qlarifi, an alternative to the major credit bureaus that would collect data in real-time and may be more appealing to BNPL firms.

As the two sides hash out their differences, the “buy now, pay later” industry keeps growing. On Tuesday, Walmart announced it’s launching its own BNPL service and Reuters reported that Affirm has started offering BNPL loans for elective medical procedures.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

The FTC believes this rule will lead to higher wages, more innovation, and thousands of new businesses across the U.S. It is set to go into effect within 120 days of being published in the Federal Register.

What’s the Deal With Noncompetes?

Noncompete agreements are contracts restricting workers from taking a job with companies that compete with their current employers. They usually outline a period of time during which the individual can’t work for a competitor.

They are particularly common among senior executives, as well as in certain industries, such as finance, and companies may argue that these agreements protect their business and intellectual property. But for many workers, they may simply discourage job switching, robbing employees of their flexibility and the pursuit of higher wages and better benefits.

Several states had already banned noncompete clauses, and companies often don’t enforce them.

Looking Forward

Without noncompete agreements, workers would be free to explore the job market or even start their own company within their area of expertise. The ban could provide more flexibility and opportunities to nonunion employees across the country.

But the noncompete ban has already faced pushback. Critics argue that the FTC has overstepped, and point out that the bill could give certain entities exempt from FTC regulation — such as banks, credit unions, and healthcare nonprofits — a competitive advantage over other businesses in their sectors. A pair of lawsuits by the Chamber of Commerce and Texas accounting firm Ryan challenge the ban’s constitutionality.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

Millennials have faced their fair share of financial turmoil in their lifetimes. Even so, their wealth is growing at a historic pace.

Millennials have weathered multiple market bubbles and recessions, and are presently faced with a housing and childcare affordability crisis, as well as the highest debt level of any age group in the U.S. But it’s not all bad. For those who were invested in the stock market during the height of the pandemic, the eye-watering selloffs of March 2020 were rewarded with a massive market rally.

Wealth Winners

The average wealth of households under the age of 40 was $259,000 at the end of 2023, a near-50% increase from 2019, according to an analysis by the Center for American Progress using Federal Reserve data. While this broad group also includes the younger Gen Z, millennials specifically saw their inflation-adjusted wealth more than double during this period.

For comparison, households aged 40 to 54 saw their inflation-adjusted wealth fall 7%, per the same analysis, while the wealth of those aged 55 to 69, and 70 and older increased by 4% and 15%, respectively.

Historical Comparison

The surge in wealth among millennials is unprecedented, growing at the fastest clip since the Fed began collecting such wealth data in 1989.

This growth can be attributed in large part to millennials’ real wage gains. As the largest working generation in the U.S., millennials have been well-positioned to benefit from the strong job market of recent years. The growing popularity of investing among younger generations likely played a role as well given the robust stock market rally following the height of the pandemic.

On top of that, millennials stand to benefit from an enormous wealth transfer, with more than $90 trillion in assets predicted to change hands over the coming two decades.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

If you’ve bought anything on the internet lately, you’ve probably noticed a button offering to spread your purchase over several payments.

This is called “buy now, pay later,” or BNPL. Companies including Affirm, Klarna, and Afterpay let you buy a product home immediately while you pay for it over time. These loans result in a soft credit check, which doesn’t affect your credit score, making them appealing to people who are working to build up their credit.

In a report from the Consumer Financial Protection Bureau, 17% of survey respondents said they’d used a BNPL service in the last 12 months.

Apple (AAPL) made waves in February by announcing it would report its BNPL loans to Experian, one of the three major credit bureaus in the United States. Equifax, Experian, and TransUnion were hoping Apple’s competitors would follow suit, but so far, they have not.

The worry: Consumers could be taking on massive debt that’s invisible to banks and other lenders

The Divide

If scored in the traditional way, BNPL loans could hurt consumers’ credit scores, according to Affirm, Klarna, and Afterpay, who don’t want to report their loans to credit bureaus.

The credit bureaus, however, say that if they could account for BNPL loans, consumers could build their credit over time by making their payments on time, and lenders would have a more accurate picture of how much debt people are actually holding as BNPL basically means buying something on credit.

Credit bureaus and BNPL firms are discussing how the credit reporting system could be revised. Meanwhile, a former Klarna exec founded Qlarifi, an alternative to the major credit bureaus that would collect data in real-time and may be more appealing to BNPL firms.

As the two sides hash out their differences, the “buy now, pay later” industry keeps growing. On Tuesday, Walmart announced it’s launching its own BNPL service and Reuters reported that Affirm has started offering BNPL loans for elective medical procedures.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

A new White House proposal for federal student loan forgiveness is focusing on those whose student debt has ballooned larger than their initial loan principal because of how much interest the debt has accrued. The initiative promises debt relief for as many as 25 million people, per the Department of Education .

Relying on the rules of the Higher Education Act from 1965, the new debt relief program could become available to loan holders by the fall of 2024 if approved. The first draft was released for public review in early April.

Who Would Qualify?

President Joe Biden’s plan to provide widespread debt relief based on household income was struck down by the U.S. Supreme Court in 2023. Shortly after the court’s decision, the White House announced this new proposal.

If approved, the plan would permit automatic relief of “up to $20,000 of the amount by which a borrower’s loans currently exceed what they owed upon starting their repayment,” per the EoD .

Other loan holder categories are also being targeted. The total number of borrowers who could gain relief is estimated to reach 25 million, although there could be some double counting due to overlapping categories:

•   Borrowers who entered repayment at least 20 years ago.

•   Borrowers who are otherwise eligible for loan forgiveness under SAVE, closed school discharge, Public Service Loan Forgiveness (PSLF), or other forgiveness programs, but not enrolled.

•   Borrowers who enrolled in low-financial-value programs or institutions.

•   Borrowers who have experienced financial hardship due to their student loans and who continue to experience hardship — despite the available options — because their needs aren’t addressed by the current system.

Deadlines Loom for Existing Programs

Borrowers paying down older federal student loans have until April 30 to consolidate their loans into a newer one and thereby qualify for payment count adjustments that could put them closer to income-driven forgiveness.

If you have one of the following loans, you may consider consolidating into a Direct Loan before April 30, 2024:

•   Commercially or privately held loans under the Federal Family Education Loan (FFEL) program

•   Parent PLUS loans

•   Perkins loans

•   Health Education Assistance Loans

There’s also an important deadline looming for those seeking PSLF, which provides loan relief for teachers, nurses, firefighters, and others who qualify. It is about to suspend applications while its processing system is overhauled. Borrowers are encouraged to submit PSLF forms and take other important steps before April 30.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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For older generations, it may feel taboo to talk about politics in the workplace. But for younger workers, it can be a prerequisite for picking a job.

Gen Z workers increasingly expect employers to take stances on political social and issues — and for those views to align with their own.

Speaking Up

Younger workers expect companies to speak up on issues such as environmental issues and sustainability, to work-life balance, from diversity, to mental health. The latter is a particular priority, with data from U.K. careers platform Bright Network showing that more than 90% of job seekers consider a company’s stance on employee well-being before even applying for a job.

In 2023, 44% of Gen Z workers reportedly pushed back against work responsibilities due to ethical concerns, while 39% rejected job offers that did not align with their values, per consulting firm Deloitte .

A Changing Workplace

Companies are taking note. The pandemic and post-pandemic period have changed the way we work. From hybrid work models across industries, to social uprisings, companies have learned to listen to workers, particularly following the labor shortages of the pandemic recovery.

Many Gen Z workers only arrived in the labor force during the pandemic, starting their career in a time where worker demands received more attention than in years prior. As a result, younger workers have markedly different expectations for their employers compared to previous generations. For companies looking to attract young and talented workers, transparency and a commitment to social responsibility will likely remain key.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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Lately, it seems every week brings a new topic of geopolitical tension or concern. Given the increasing number of risks around the globe, we took a dive into what has happened so far and what we might expect from markets in response.

To lay the groundwork, despite all of the recent headlines surrounding the Middle East, ongoing conflicts between Israel and Palestine, Russia and Ukraine, rising tension between China and Taiwan, and currency volatility in Japan, the broad Geopolitical Risk Indicator remains below prior peaks.

Let me be clear, all of these spikes were notable, and all of them deserved heightened awareness and risk management, as do the current risks that exist. What we’re finding though, is despite the panic that can ensue as headlines hit the wire, markets tend to move on quite quickly… except when certain conditions are present.

Longer Threads Make Larger Threats

The most recent “historical” shock we can look to is Russia invading Ukraine in February 2022, which wreaked havoc on global commodity markets and risk assets. The outsized moves in natural gas make the other lines on this chart below appear calm, but none of them really were. And as we know, this conflict is still not over.

We recognize that the tensions between Russia and Ukraine and Middle Eastern countries are different, but the effects on markets are what we’re focusing on.

The initial shocks were large, especially to energy and agriculture, and although some of that early spike cooled off shortly afterward, the levels remained elevated and markets never “fully” recovered.

Markets are resilient in the face of stress, which we can see over the course of history. But they are less resilient when that stress begins to have clear lasting consequences. In the case of Russia/Ukraine, the sanctions that were put on by various nations prevented markets from recovering quickly. Add to that the continuing threats and actions surrounding the natural gas supply between Russia and Europe — and markets had to get comfortable with the idea that this geopolitical shock had turned into a geopolitical phase that wasn’t showing signs of resolution.

Volatility continued in earnest for six months, and in smaller fits and starts it carried on through the rest of 2022. This instance turned out to be a geopolitical shock with lasting consequences, and ones that were clear to markets early on, which created the conditions for lasting volatility and “shock factor”.

Pins or Needles

Fast forward to the present, and global markets are once again facing heightened geopolitical risk, this time in the Middle East. But this has been different, at least as far as the market is concerned.

We’ve had a number of mini spikes in oil since the initial attack in Israel, only to see prices right back where they started before the conflict began. Not to mention, Iran got involved in the last few weeks and still… oil prices and equities have shrugged it off.

Does that mean it’s over? No. Does that mean markets are insulated from it? No. What it means is that markets cannot identify what the clear and lasting consequences may be, partly because there haven’t been any changes in trade relations so far, and no other regions have become materially involved. Expectation seems to be that if it doesn’t escalate further, commodity prices are not at longer-term risk of spiking.

The conundrum that still exists is the strength of gold, which has most certainly not returned to previous levels and continues to warn of some type of global event risk.

Fabrics and Foundries

In addition to the here and now, there are always risks visible on the horizon. Perhaps the biggest and most obvious is a potential conflict between China and Taiwan. China ranks as the second-largest economy in the world and the top exporter of a wide range of goods. Taiwan is smaller, but boasts greater than a 60% share of the global semiconductor market, and over 90% of the advanced chip market.

It’s impossible to predict if or when tensions could turn into something more serious. And even harder to predict the level of severity or spread, even if things heated up. Either way, history can serve as a guidepost in mapping out the possible impacts of a conflict.

There’s no way to sugarcoat it: A conflict could have extreme consequences — for people, for economies, and for markets. There are always risks out there, and while it’s important to be aware of them, it would be overly conservative to try to protect a portfolio against all of them. A conflict between China and Taiwan would be a big deal, but it’s not yet a big deal. We can be smart about limiting the concentration in portfolios to ensure there isn’t any outsized exposure to a potential shock, but geopolitical events have a way of turning out differently than we expect… sometimes for the better, and sometimes for the worse.

Responsible risk management includes an awareness of the possible big shocks, a general reduction in portfolio risk as external threats increase, and a more active eye on events and market moves. An approach that reminds me of something my Dad used to say on the basketball court or the baseball diamond, “look alive!” and always keep playing the game.

Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young Thomas is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Her ADV 2B is available at www.sofi.com/legal/adv.

The way you start your career can matter a great deal, because it may send you down one path or another. Brad Goreski, judge on Canada’s Drag Race, knows a thing or two about that.

From being an intern at Vogue to starring on The Real Friends of WeHo, Goreski has achieved a lot since moving from Canada to Los Angeles as a college student. He stopped by SoFi’s YouTube series Richer Lives to talk with financial literacy advocate Vivian Tu, aka Your Rich BFF, and SoFi’s Head of Advice and Planning, Brian Walsh, to talk about his career, fashion, and how he thinks about money.

“To be honest, I didn’t have a business plan,” he confessed about this first styling job, getting Jessica Alba ready for the red carpet. “I was just willing to do whatever it took to get her the best clothes for the look, because I knew that my investment” would pay off when potential clients saw the work.

Don’t Let Opportunities Pass You By

While an intern at Vogue, Goreski saw an editor in the elevator. “I was like, ‘You look stressed out.’ I don't know why an intern is saying this to an editor. But she's like, ‘Oh, I've got this shoot this weekend. I don't have anybody to help me.’ And I was like, ‘I’ll help you.’ And I went on set with her.”

He had no idea what he was doing. But his effort and enthusiasm won her over, and soon he was learning new skills and working with other editors.

The lesson? Jump on opportunities when they come your way, and when you get one, “be really present … Go in there and give everything you've got,” then the “money will kind of sort itself out.”

Dress Well Without Breaking the Bank

With a background in styling, Goreski also had some fashion advice to give: Dressing for success doesn’t have to mean emptying your bank account. “Always wait for the sale,” Goreski said.

“I'm all about options,” he said. Buying lots of pieces on the cheap instead of one expensive outfit gives you more choices when it comes to dressing for work.“Almost everything goes on sale,” said Goreski. Email blasts, coupon codes, and online sales can supply you with a variety of looks without breaking your budget.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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That means there is now an historic gap between workers’ preferences and their reality when it comes to unionizing. Anecdotally, however, that gap seems to be narrowing as workers at some of America's biggest companies increasingly demand union protections.

Union Rebirth

The U.S. has a strong history of labor unions, particularly in the first half of the twentieth century, though the union movement weakened in the second half. But recent unionization success stories seem to inspire more workers to head to the bargaining table.

After negotiating new contracts with Detroit’s “Big Three” automakers, Ford (F), General Motors (GM), and Jeep-parent Stellantis (STLA), the United Auto Workers successfully unionized a Volkswagen (VWAGY) plant in Tennessee last week. The auto union also secured a unionization vote for workers at a Mercedes-Benz (MBGAF) factory in Alabama.

The momentum is building in other industries as well. From UPS (UPS) drivers, to pilots and flight attendants, from Starbucks (SBUX) baristas and Amazon (AMZN) warehouse staff, to Disneyland (DIS) performers and CVS (CVS) pharmacists, workers are asking for more.

Labor Momentum

Unionization efforts can give workers the bargaining power necessary to drive significant company-wide change. In California, after years of lobbying and strikes, fast food workers recently secured an increase in minimum wage from $16 to $25 per hour.

Although the rate of unionized workers is historically low, there is evident momentum across corporate America. Benefits won through labor negotiations are often contagious, so these moves could catalyze more organizing efforts while support for workers is high.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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According to a recent study by Consumer Reports and consulting firm ICF Incorporated, climate change will cost a child born in 2024 between $500,000 and $1,000,000 in their life. This estimate includes a combination of higher costs, potentially lost wages, and lower investment returns, assuming an unchanged climate policy trajectory.

Costs of Climate Change

Here’s how climate change could impact the personal finances of future generations.

For one, more extreme temperature swings are already leading to rising energy costs, as more people rely on A/C to stay cool, driving up electricity bills. Additionally, droughts and floods are jeopardizing the steady supply of food crops, as well as fruit and vegetables, which, in turn, leads to higher food inflation.

Extreme weather events could also affect corporate America, per the report, potentially leading to lower profits and reduced stock market growth, which would be bad news for investment portfolios and retirement savings. Workers in affected industries could also experience more job insecurity.

Rising Temperatures, Rising Costs

CO2 emissions will cost the global economy as much as $38 trillion in economic damage by 2050, according to one Nature study . A separate study from researchers at Stanford University found it would cost a fraction of that ($6 trillion) to comply with the Paris Climate Agreement.

Of course, it is tremendously difficult to forecast the exact cost future generations may face. There are many unknowns, including how the private sector may respond where public policy is missing, or future global agreements and their impact. What we do know with some certainty is that extreme weather comes with a price tag.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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Chris Lovell wants you to get what you deserve.

As the founder of Careers by Chris, she helps people land raises, promotions, and higher-paying jobs. Lovell joined SoFi’s Women’s Financial Empowerment webinar series during Women’s History Month to break down how to get your dream job or salary.

Here are her steps to success.

Assess Your Value

“If you do one thing today, I want you to start documenting your achievements,” Lovell said.

She recommended continuously tracking your impact on your team and your company, from bumps in productivity to laudatory emails from coworkers, by setting regular reminders to update your “brag book,” aka a spreadsheet of your accomplishments.

Else you could be left scrambling when it’s time to negotiate. “It’s so much easier if you just keep a running log of this information,” she said.

Even if you have to do some last-minute digging, she said it’s very important to have numbers and other concrete evidence to help you build the case that you deserve a raise or promotion.

Do Your Research

“The first step to getting a raise is to really understand your value and to be able to price yourself in the market,” Lovell said.

You want to enter negotiations with a realistic salary range. To come up with that, you can research salaries on Glassdoor, Payscale, and LinkedIn, as well as from data from industry associations.

Advocate For Yourself

“When you're presenting your case, be concise and confident,” Lovell said. It’s easier to do that if you’ve spent time documenting your achievements and fully understand your value as an employee.

Before talking with your manager about a title or salary bump, it’s a good idea to think about what questions they might ask you, said Lovell. And at the end of that meeting, ask to schedule a follow-up conversation, she advised, because it’s very possible they won’t be able to give you an answer right away.

And while you might feel passionately that you deserve more money and responsibilities, it’s important to be respectful.

“The goal is to engage in constructive dialogue that demonstrates your value and seeks fair compensation,” Lovell said. “Make sure you're keeping the conversation open and professional.”

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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A very lucky Powerball player won $1.326 billion last Saturday, the fourth largest jackpot in Powerball history. Who owns the winning ticket, purchased in Oregon, is still a mystery.

But becoming an overnight billionaire, or millionaire after taxes, isn’t always a dream come true. History is littered with lottery winners who squandered their wealth, either by living too large or making ill-advised investment choices.

What Happens When You Win the Lottery?

Buying lottery tickets might not be the best long-term investment strategy. The odds for winning Powerball are 1 in 292 million. Even so, many economists agree that given the low upfront cost of a lottery ticket, it is worth the fun even if the chance to win is slim.

If you do win, you can choose to stay anonymous in 18 states, which is great for keeping grifters at bay. Other states announce all winners to promote transparency.

One of the most important decisions for lottery winners is whether to accept their money in one lump sum, or receive an initial amount plus 29 annual payments. The choice may be determined by immediate financial needs, investing acumen, and state tax rules.

The federal government regards lottery winnings as taxable income. Most states do as well, including Oregon, which will take 8% of the recent winner’s prize. California doesn’t, which was great news for the person who took home Powerball’s largest jackpot in 2022: $2.04 billion.

Making the Most of a Windfall

Whether you win the lottery, inherit money, or get a huge bonus, there are smart things you can do with an unexpected cash windfall. First, don’t rush any decisions and think about what will benefit you long-term.

Next, you might think about finding a financial advisor to help you make a long-term plan, invest your money, navigate taxes, and create a budget. While a solid budget fit for your needs is always a good idea, it’s especially important if you land a large sum, even if it’s smaller than $1.326 billion.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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Years on, working fully remotely is increasingly less attractive to workers, who prefer to go into the office sometimes, while having the flexibility to work from home as well.

Preference Pivot

In a recent survey by research and business intelligence company Morning Consult, nearly a third of employees (29%) said they prefer a hybrid work schedule. Meanwhile, only 23% preferred fully remote work. While the percentages remain close, it’s a big shift from last year, when 27% of survey respondents preferred remote work, and 25% picked hybrid schedules as their ideal state.

The number of people actually working remotely has also declined, falling to 21% of respondents in 2024, down from 23% in 2023, and 27% in 2022. Companies’ return to work mandates, and employees' preferences to see their co-workers every now and again, may be at work here.

Takeaways for Employers

But there were more takeaways for companies: Engagement fell for fully in-person workers, as well as for fully remote workers in 2024, per Morning Consult. However, it increased for hybrid workers. The lesson for companies seems clear. Workers want a healthy medium. For employees, it offers some of the flexibility of remote work, without losing the perks of office work, such as easier communication and socialization.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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The White House announced this week $6.6 billion in fresh funding to help Taiwan Semiconductor Manufacturing Company (TSM) build a third factory in Phoenix, Arizona, on top of the two TSMC is already building. This could be a boon for the local economy, and U.S. chip manufacturing power. But it could also be a problem for the city’s water supply.

The Main Problem

Chip manufacturing is a very water-intensive process as machinery needs to be cooled. The global chip making industry consumes as much water as all of New York City, the most populated city in the U.S., per a report from S&P Global (SPGI).

And to make matters worse, Phoenix is in a drought that has been going on for a decade and a half.

State officials are adamant that Phoenix has enough water to go around, and TSMC said it can reuse 90% of the water that it uses in the first place.

But skeptics believe the long-term construction projects plus the operations when they’re up and running will put pressure on the system. It also underscores the impact of climate change in urban planning.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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Elaine Welteroth’s advice for building personal wealth is simple: “Talk about money.”

“So many of us were so discouraged from talking about money,” Welteroth said on SoFi’s YouTube series Richer Lives to talk with Brian Walsh, SoFi’s Head of Advice and Planning, and financial literacy advocate Vivian Tu, aka Your Rich BFF.

“Pay transparency, even among your peers, is so powerful. It puts you in a more empowered position when you are negotiating, knowing what other people make for similar work.”

At 29, Welteroth took the helm at Teen Vogue, becoming the youngest editor-in-chief in Condé Nast’s history. Later, she was a regular on Project Runway and The Talk. Needless to say, she may know a thing or two about getting to where you want to be. Her latest book is More Than Enough: Claiming Space for Who You Are (No Matter What They Say).

Set Yourself Up For Success

Doing your research is a vital part of negotiating a salary. The less shy people are talking about money, Welteroth said, the less likely they are to get a “bum deal.”

“You need to go into any negotiation with what I call your ceiling and your floor,” she said. That includes “the top of the pay range that you're aiming for and then the very bottom that you won't go below. I think that helps you stand strong and a little bit firmer.”

When asked about her definition of “rich,” Welteroth said it was about having a “mindset of abundance,” and “moving through the world with a sense of freedom, and liberation, and agency.” Essentially, “it's about living on your own terms.”

Walsh suggested that financial planners can help clients feel that way. If people can “secure a financial foundation, with enough cash and no credit card debt, things like that,” he said, they’ll have the flexibility and independence to make career decisions based on “what you want to do, not what you have to do.”

Making it, however, comes with “the responsibility that [...] is making sure that you are using it to create more equity in the world,” said Welteroth. “What are you doing to make the world a better place with those resources that you have?”

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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The price of gold has soared in recent weeks to repeatedly record highs. There are a few factors behind this rally, including increased demand from central banks around the world.

Gold tends to get a lot of attention during times of volatility, be it in the markets or geopolitically. With ongoing conflicts in the Middle East and Eastern Europe, that’s shining a light on gold. The shiny metal is also often viewed as a potential hedge against inflation. Some may refer to gold as a “store of value” in this scenario.

Central Bank Demand

Since the start of April, the spot price for gold has surged from $2,264 per oz to an all-time high of just over $2,360.

Central banks around the world have been stocking up on gold too, including China, Singapore, Turkey, India, and many Eastern European countries are buying more of the precious metal. China has been buying more gold for 17 straight months.

Economists view this global pivot toward gold as a sign of de-dollarization. In other words, rather than holding U.S. dollars, central banks may want to diversify their holdings and add more gold to the mix.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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With home prices and mortgage rates high, buying a home feels out of reach for many Americans. But that hasn’t stopped some from investing in their dream home, even if they don’t own it.

Rather than saving up for a down payment, millennials instead try to create their perfect home in a different way: renovating their rentals.

Housing Struggles

The housing affordability crisis means that many Americans, especially younger ones who are looking at buying their first homes, are finding it hard to succeed in this housing market. Home prices have boomed over past years, and despite elevated interest rates, prices have remained high.

The homeownership rate for older generations was 70% or above in 2022, but only 52% for millennials, according to data from Apartment.com . Nearly a quarter of millennials expect to rent forever.

So what to do if you’re tied to your rental but you’re not feeling at home. Millennials are increasingly fronting the cost for improvements to their rental units, paying for things such as new rugs, shower heads, or fresh paint. The trend is gaining steam on social media too, where content creators document DIY rental renovations.

Hunting For a Home

Renovating a rental may not make financial sense on paper. Why pour money into improving the value of a property you don’t own? Indeed, it is advisable to consult with your landlord and closely read your lease before making any renovations, as improvements made without consent could put your security deposit at risk.

That said, even minor improvements to your space can yield meaningful results to your mindset. A comfortable living situation can help boost productivity, improve your mental health, and provide a feeling of peace. A rental renovation doesn’t need to be a massive, expensive undertaking either. There are plenty of easy renter-friendly updates to help anyone improve their rental space.

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The U.S. economy has been surprisingly strong in the face of high inflation, boosting the global economy to outperform expectations. But there may be clouds gathering on the horizon.

The International Monetary Fund (IMF) plans to increase its global growth forecasts in its coming projections. But there’s a catch. It also issued a firm warning that failing to resolve inflation and high debt levels could send the world into a sluggish decade — the “Tepid Twenties.”

Good News and Bad News

Let’s start with the good news. The IMF’s January projections showed 3.1% global economic growth in 2024 and 3.2% in 2025. In the revised projections due April 16th, the IMF is expected to marginally raise those estimates, thanks to strong consumer spending and investment, as well as improving supply chain dynamics.

However, alongside this rosy outlook, the IMF warned many countries still face elevated inflation and debt levels, which could pose a risk to the global economy in coming years. Case in point, U.S. consumer price inflation rose 3.5% year-over-year in March, well above the Federal Reserve’s 2% target.

Policy Solutions

IMF Managing Director Kristalina Georgieva cautioned central banks to avoid premature interest rate cuts and loosening their monetary policy too soon. Else, a potential resurgence of inflation could knock economic growth, and the much-discussed soft landing could be jeopardized. And economic growth is especially needed to reduce the relative debt loads governments are shouldering, too. So you see, the soft landing discussion never stopped.

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Talk about going green. Last year, as a result of the Inflation Reduction Act (IRA), the U.S. government spent $239 billion to encourage companies and consumers to embrace renewable energy, according to a report from Clean Investment Monitor, a joint project from MIT and Rhodium Group.

That’s a 38% bump from the year before. And it seems to be working. Since the IRA was passed in 2022, the rate at which CO₂ is being reduced has doubled. By 2031, federal government spending on clean energy could reach $1.2 trillion, according to an estimate from Goldman Sachs.

On the Rise

These are the clear winners of the IRA-sponsored boom: solar energy, electric vehicles (EVs), and battery technology. Companies and manufacturers benefited from a mix of direct payments and tax incentives.

Most of the money spent on manufacturing involved the EV supply chain, from battery production to vehicle assembly. And when it comes to energy projects, solar farms and storage won big in scoring federal help, although connecting them to existing power grids remains a challenge.

Left Behind

Carbon capture and hydrogen projects, favored by the oil and gas industry, haven’t fared as well in comparison. The former involves capturing emissions from factories and power plants, and then reusing or storing the CO₂. The latter involves producing hydrogen, which can be used as fuel for transportation and heating, and only emits water and air.

In general, the IRA has favored totally renewable projects over those that extend the lifespan of existing oil and natural gas facilities.

What It Means For You

Even if you don’t invest in clean-energy companies, the IRA could affect you. Consumers may be able to earn tax credits for installing solar panels and heat pumps at their homes. And they can save up to $7,500 on a new EV, provided the buyer and vehicle meet a list of requirements.

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Salary negotiations can be among the most stressful discussions you have in your career.

However, at the end of the day, your job is a business transaction. You are trading your time and skills for money. So if you haven’t been happy with how much you made in the past, it’s time to put in the extra effort to get your worth this time around. Here’s how to research and articulate your salary expectations during job interviews.

1. What’s the Market Value?

When determining your desired salary range, take a look at what is being offered elsewhere. What are the lowest and highest salaries paid for this type of role at similar sized companies? Getting an idea of what your role is being paid elsewhere can help you figure out your minimum and ideal salary numbers.

The next question is where do you fall on that spectrum based on your experience? You’ll most likely find this kind of information on sites like Glassdoor and Salary.com, but more and more companies also list out salary ranges in their job postings.

2. Flip the Script

At some point in the interview process, your potential salary might come up. Recruiters often ask for salary expectations, for example. Instead of answering with one concrete number, flip the question on its head and ask it back to them.

You can say something like: “This early on in the process I’m still understanding the scope of the role, but do you have a budget or salary range for this position?” And if they push you further to give a number, you can say: “I’m actively interviewing for roles that pay between $X-X, is that in line with your budget for this role?”

Whatever you do, don’t tell them your current salary. You want to avoid limiting your ability to secure a higher offer. If you tell them your current pay, they may just use it as a benchmark.

3. Your Salary Isn’t the Only Compensation

Your monthly salary is important, but it’s not the only form of monetary compensation you might get from a job.

When negotiating your compensation also consider negotiating performance bonuses, options for company equity, PTO days, benefits, remote work, flexible work schedules, you name it. Bring whatever matters most to you to the table for discussion — you could end up with way more than you bargained for, on all accounts!

Above all, remember that you don’t have to accept unfair pay for any job. You deserve to be paid what your skills and experiences are worth, so don’t settle for less!

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Resilience in the US

Looking at the U.S. Dollar Index (DXY), which measures the so-called greenback against a handful of its main rivals, such as the euro and the British pound, the dollar had a roaring start to the year. And after a brief downturn in March, it’s marching higher yet again.

The dollar is strong in part because the U.S. economy is so strong, having remained surprisingly resilient in the face of high inflation and restrictive monetary policy. Persistent consumer spending has contributed to ongoing growth, while advancements in technology like AI helped to drive corporate profits, spur new investments, and send stocks on an impressive rally over the past six months.

All this growth has also incentivized the Federal Reserve to delay its highly anticipated interest rate cuts. And in the currency world, that’s a good thing. When the central bank raises rates — or in the case of the Fed suggests it will keep it higher for longer — it typically boost the local currency. That’s because foreign investors may want to take advantage of the elevated interest rates, buying dollars to do so. And depending on how long U.S. rates stay relatively higher, this dynamic may continue.

Ripple Effects

The stronger dollar means its currency rivals have weakened in comparison. For nations that have seen their exchange rates fall a lot, this poses a range of issues, from trade, to budgets, to inflation, as exports from the U.S. are getting pricier.

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Get your scrolling in now, the House of Representatives just passed a bill on Saturday that could result in a TikTok ban.

House Republicans tied the TikTok legislation to aid for Israel and Ukraine, increasing the odds the Senate would pass the bill, possibly as early as this week. Lawmakers have claimed TikTok’s ownership by Chinese parent company ByteDance is a national security risk.

If the bill is passed by the Senate and signed by President Joe Biden, ByteDance would have nine months from when the rule became law to sell TikTok, with a possible extension of another three months. China has signaled it would block any sale. And if that happened, TikTok would effectively be banned in the United States.

The (Potential) Aftermath

To say a lot of Americans would be affected by this would be an understatement; TikTok has 170 million users in the United States. In a Pew Research Center poll from December, only 38% of U.S. adults supported a ban. That number dropped to 18% for teens.

Many smaller companies, especially in the beauty and fashion industries, rely on TikTok for exposure and sales. Larger brands have also made it a key part of their marketing strategies. And last month, TikTok influencers protested in Washington, D.C., over an earlier version of the House bill, claiming a ban would make it harder for them to make a living and gain an audience.

It’s possible the law would result in lawsuits from TikTok and creators using the platform.

Who Wins, Who Gets Hurt?

Meta (META) and Alphabet (GOOGL), whose Reels and Shorts, respectively, are very similar to TikTok, could be the main beneficiaries of a ban, as consumers and brand’s advertising budgets may flock to other social media platforms.

Meanwhile, Susquehanna International Group, which owns about a 15% stake in TikTok, and other investors in the company, including Sequoia Capital, might not be thrilled if the bill passes. But several potential buyers have been tipped or voiced their interest in the past months, including an investor consortium around former Treasury Secretary Steven Mnuchin.

Who would “lose out” the most? Arguably teens. While social media use among minors has increasingly been a topic discussed by lawmakers and advocates, the status quo is a whole generation on the app: Pew Research Center found that 67% of teenagers use TikTok and 16% are on the platform “almost constantly.”

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Asking ChatGPT to write you a business plan or sonnet might feel like magic. But what if we told you that no matter how simple your ask, it expands your CO2 footprint quite a bit?

In reality, in response to a prompt, graphical processing units run complex calculations in large data centers, which require a ton of electricity. That’s in addition to the massive amounts of energy needed to train AI models such as Anthropic’s Claude 3 and OpenAI’s ChatGPT 4.

This high energy consumption has raised concerns about how AI might contribute to climate change. A single ChatGPT query requires 10 times the energy of a Google search, according to the International Energy Agency.

With the additional AI load, the world’s data centers are on pace to consume more power than the entire country of India, the world’s most populous nation with 1.417 billion people, by 2030, said Arm Holdings plc (ARM) CEO Rene Haas last week to Bloomberg.

Power Savings

There are several ways companies might use and improve AI to lower carbon emissions.

First, the technology could be used to make systems and products more efficient. Over the next four years, AI software could reduce the energy consumption of buildings by 15% to 25%, said Schneider Electric CEO Peter Herweck at the CERAWeek by S&P Global conference last month.

AI could also help make power grids more efficient and resilient, given they have come under stress with the rise of renewable energy sources and EVs. Companies, including Samsung, have already touted AI-enabled appliances meant to cut power consumption.

Second, AI models and infrastructure could be designed to lower their carbon footprint. Google (GOOGL) has increasingly relied on wind and solar energy to power its data centers. It also favors giant hyperscale data centers over smaller, less efficient alternatives.

Cutting-edge chips and servers can reduce the energy demands of artificial intelligence. So can training AI models in novel ways. With CO2 levels on the rise, there could be pressure on companies to make AI as green as possible.

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Even at its most affordable, attending college in the United States isn’t cheap.

Roughly three-quarters of Americans still consider a college education valuable, according to a survey from Gallup and Lumina Foundation. But the hefty price is proving to be a significant deterrent. The average annual cost of an undergraduate education during the 2021-22 academic year spanned from $10,000 per year for public, two-year institutions to more than $56,000 for private, four-year nonprofit universities, per Gallup.

Costly Choices

The majority (56%) of adults who either stopped attending college or never attended at all point to the cost as a critical reason for not enrolling, according to the survey. Meanwhile, nearly a third (31%) of currently enrolled adults who are considering dropping out cite costs as a factor.

Delays surrounding the revamp of the government’s Free Application for Federal Student Aid (FAFSA) forms this year are also weighing on new applications, adding more evidence that the overwhelming cost of college is a major factor for many.

But for prospective students, it’s not that simple. While the cost of obtaining a degree can be a barrier to entry, the median annual income of recent college graduates with a Bachelor's degree is $60,000, compared to $36,000 for those with just a high school diploma, according to the Federal Reserve Bank of New York .

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Heading into the last week of April, market sentiment changed dramatically. The S&P 500 fell below 5,000 for the first time since surpassing that level in February. The rise in Treasury yields is to blame, as expectations for rate cuts have dwindled. In short, some worry has creeped back into the market after a euphoric start to the year.

Let’s put things into perspective: The average drawdown in any given year for the S&P 500 is 16%, yet stocks are only 5% off their highs as of now. If the current pullback doesn’t deepen, it would rank as the third smallest since 1964 and seventh smallest since 1928. So let’s not panic just yet.

Indicators of fear you see during deep selloffs aren't really present at the moment either, and some might say that’s for good reason. Stocks are still up on the year, and economic indicators such as jobless claims and retail sales reflect an economy devoid of major cracks in the aggregate. That’s not to say that everything is perfect. Housing remains a challenge for example, both for owners and renters, with mortgage rates at their highest levels since December.

We’ll get a closer look this week at how the economy has really been doing at the start of the year. First, gross domestic product — the broadest measure of economic activity — for the first quarter gets released on Thursday. The consensus is seeing a 2.4% annualized growth rate, while the Federal Reserve of Atlanta’s GDPNow Model estimate is 2.9%. That would probably be interpreted as strong, despite being a slowdown from the prior two quarters. And then earnings season picks up steam this week, with 162 companies included in the S&P 500 across various sectors set to report results. This week will be an important one for determining market sentiment moving forward.

Economic and Earnings Calendar

Monday

•  March Chicago Fed National Activity Index: This is a monthly index put together by this regional Fed that incorporates 85 indicators from four categories: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories.

•  Earnings: Ameriprise Financial (AMP), Alexandria Real Estate Equities (ARE), Brown & Brown (BRO), Cadence Design Systems (CDNS), Globe Life (GL), Nucor (NUE), Packaging of America (PKG), Truist Financial (TFC), Verizon (VZ)

Tuesday

•  April S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

•  April Philadelphia Fed Non-Manufacturing Activity: The Philadelphia Fed’s survey of services executives in the region on business conditions and their outlook.

•  April Richmond Fed Manufacturing Activity: The Richmond Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•  April Richmond Fed Non-Manufacturing Activity: The Richmond Fed’s survey of services executives in the region on business conditions and their outlook.

•  March New Home Sales: While only a minority of home transactions in any given month come from new constructions, these home prices tend to be more cyclical and give insight into developing trends.

•  Earnings: Baker Hughes (BKR), Chubb (CB), CoStar Group (CSGP), Quest Diagnostics (DGX), Danaher (DHR), Enphase Energy (ENPH), Equity Residential (EQR), EQT (EQT), Freeport-McMoRan (FCX), Fiserv (FI), General Electric (GE), General Motors (GM), Halliburton (HAL), IDEX (IEX), Invesco (IVZ), Kimberly-Clark (KMB), LKQ (LKQ), Lockheed Martin (LMT), MSCI (MSCI), NextEra Energy (NEE), NVR (NVR), PepsiCo (PEP), PulteGroup (PHM), Philip Morris International (PM), Pentair (PNR), Raytheon Technologies (RTX), Sherwin-Williams (SHW), Steel Dynamics (STLD), Seagate Technologies (STX), Tesla (TSLA), Texas Instruments (TXN), United Parcel Service (UPS), Visa (V), Veralto Corporation (VLTO), W R Berkley (WRB)

Wednesday

•  March Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.

•  Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

•  Earnings: Align Technology (ALGN), Amphenol (APH), Avery Dennison (AVY), Boeing (BA), Bunge Global S.A. (BG), Biogen (BIIB), Boston Scientific (BSX), CME Group (CME), Chipotle Mexican Grill (CMG), Entergy (ETR), Ford (F), Fortive (FTV), General Dynamics (GD), Hasbro (HAS), Hilton Worldwide Holdings (HLT), Humana (HUM), International Business Machines (IBM), Interpublic Group of Companies (IPG), Lam Research (LRCX), Masco (MAS), Meta Platforms, Inc. (META), Molina Healthcare (MOH), ServiceNow (NOW), Norfolk Southern (NSC), Old Dominion Freight Line (ODFL), O'Reilly Automotive (ORLY), Otis Worldwide (OTIS), Raymond James Financial (RJF), Rollins (ROL), Synchrony Financial (SYF), AT&T (T), Teledyne Technologies (TDY), TE Connectivity (TEL), Teradyne (TER), Thermo Fisher Scientific (TMO), Tyler Technologies (TYL), Universal Health Services (UHS), United Rentals (URI), Westinghouse Air Brake Technologies (WAB), Waste Management (WM)

Thursday

•  Q1 GDP (first estimate): This is the primary measure of economic growth in the United States, it includes consumer and government spending, as well as private investment and net exports. This will be the first reading of Q1 activity.

•  March Wholesale and Retail Inventories: Wholesalers and retailers often operate as intermediaries for the sale of manufactured products, serving as a key part of the goods supply chain.

•  April Kansas City Fed Manufacturing Activity: The Kansas City Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

•  Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

•  Earnings: American Airlines Group (AAL), Arthur J Gallagher & Co (AJG), Allegion (ALLE), A O Smith (AOS), AvalonBay Communities (AVB), Bristol-Myers Squibb (BMY), Carrier Global Corp (CARR), Caterpillar (CAT), Cincinnati Financial (CINF), Comcast (CMCSA), CMS Energy (CMS), Capital One Financial (COF), Physicians Realty Trust (DOC), Dover (DOV), Dow Inc (DOW), DTE Energy (DTE), DexCom (DXCM), Eastman Chemical (EMN), Edwards Lifesciences (EW), FirstEnergy (FE), Fair Isaac (FICO), GE Vernova (GEV), Gilead Sciences (GILD), Alphabet (GOOGL), WW Grainger (GWW), Hess (HES), Hartford Financial Services Group (HIG), Honeywell International (HON), Intel (INTC), International Paper (IP), Juniper Networks (JNPR), Keurig Dr Pepper (KDP), KLA-Tencor (KLAC), Laboratory of America Holdings (LH), L3Harris Technologies (LHX), Southwest Airlines (LUV), Mohawk Industries (MHK), Altria Group (MO), Merck & Co (MRK), Microsoft (MSFT), Nasdaq (NDAQ), Newmont Mining (NEM), Northrop Grumman (NOC), PG&E (PCG), Principal Financial Group (PFG), Pool (POOL), Royal Caribbean Cruises (RCL), ResMed (RMD), S&P Global (SPGI), T-Mobile US (TMUS), Tractor Supply Company (TSCO), Textron (TXT), Union Pacific (UNP), Valero Energy (VLO), VeriSign (VRSN), Western Digital (WDC), West Pharmaceutical Services (WST), Willis Towers Watson Public (WTW), Weyerhaeuser (WY), Xcel Energy (XEL)

Friday

•  March Personal Consumption Expenditures Price Index: The Fed targets this inflation measure for its price stability mandate and believes PCE to be the best measure of consumers’ spending habits.

•  March Personal Income and Spending: These numbers give insight into how Americans are doing, which is important since consumer spending accounts for about two-thirds of economic growth in the United States.

•  April Kansas City Fed Non-Manufacturing Activity: The Kansas City Fed’s survey of services executives in the region on business conditions and their outlook.

•  Earnings: AbbVie (ABBV), Aon Plc (AON), Ball (BALL), Charter Communications (CHTR), Colgate-Palmolive (CL), Centene (CNC), Chevron (CVX), Fidelity National Information Services (FIS), HCA Healthcare (HCA), LyondellBasell Industries (LYB), Phillips 66 (PSX), Pioneer Natural Resources (PXD), Robert Half International (RHI), Rockwell Automation (ROK), Roper Technologies (ROP), T Rowe Price Group (TROW), Exxon Mobil (XOM)

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The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

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The U.S. doesn’t have as strong a vocational training program culture as other countries, such as Germany, for example, where many jobs are on the vocational rather than college track, but interest in it is growing.

Filling a Generational Gap

The high cost of obtaining a four-year degree is driving Gen Z toward trade jobs.

In 2023, enrollment in vocational programs at U.S. community colleges jumped 16%, according to the National Student Clearinghouse — a record since the nonprofit began tracking this data in 2018.

That said, there remains a sizable labor shortage for trade roles, including plumbers and electricians. The construction industry faces a shortfall of half a million workers this year, according to the Associated Builders and Contractors trade group. Even so, the younger generation’s renewed interest in trades could help address these gaps.

Changing Tides

While a college degree is still “worth it” in terms of average salaries, this is particularly true for specific fields, such as STEM. Meanwhile, more than half (52%) of college graduates end up in jobs that don’t make use of the skills or credentials gained in school, according to a study from Burning Glass Institute and Strada Education Foundation.

A survey from think tank New America showed more than half (54%) of adult Americans believe a high school diploma is sufficient for a quality job, while a Gallup survey found that nearly half (46%) of U.S. parents now favor alternatives to college for their children. This shifting attitude may be just what the economy needs to fill the growing void in trade positions left by retirees.

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

Average Refund Size

In the first week of April, the average tax refund was more than $3,000, up from just under $2,900 the year before. This increase is likely due to recent updates to the tax code.

For example, the IRS introduced a higher standard deduction for single filers – $13,850, up from $12,950 in 2022. The IRS also increased contribution limits for retirement plans. Both of these updates make it easier for taxpayers to reduce their taxable income and liability, which can lead to receiving a higher refund.

However, the total number of refunds issued was down 3.3% from last year.

Fewer Refunds

That’s becoming something of a trend: the number of refunds has fallen in the two previous years as well. This may be related to the rise of the gig economy and independent contract work. Without traditional employers to withhold taxable income or file on their behalf, contract employees may be paying less in taxes throughout the year, and consequently receiving smaller refunds or even owing money.

Some see this trend as a positive development, since refunds aren’t really free money, but rather money you’ve already spent in overpaid taxes – almost akin to a savings stash that isn’t collecting interest.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

Here’s what we know: Rate cuts are starting later than we thought. Here’s what we don’t know: When they do begin, how quickly will they progress?

This got us thinking: What might markets look like in different scenarios? Right now, fed funds futures are pricing in a scenario where the Fed cuts rates slowly, methodically, and — because they want to not because they have to — a gradual and smooth normalization of policy.

But if history serves as any guide, hiking cycles tend to be more gradual and methodical, while cutting cycles tend to be more swift and dramatic. Although a “cut because they want to” strategy is undeniably more desirable for the economy and markets, there’s a good chance that might not be how it shakes out.

Cutting Fast and Slow

There’s no way of knowing how every variable would react to a cutting cycle that happens at different speeds, but for the purpose of this piece we focused on two very important variables: the 2-year Treasury yield and the U.S. dollar.

As cuts were pushed back further, the 2-year yield rose notably, from 4.14% on January 12 to 4.93% at time of writing. The 2-year yield is thought to closely track the fed funds rate, so it’s no surprise that it has seen a dramatic move while rates are expected to stay higher for longer.

But what the current 2-year yield doesn’t take into account is the possibility that the Fed will either have to cut sooner and faster than expected – likely in reaction to weak data or a shock — or that the Fed will push cuts back even further, and do them more slowly — likely if inflation stays elevated and the economy remains strong.

By our estimation — based on our own embedded assumptions of timing and magnitude, and for illustrative purposes only — the current 2-year yield would have to move if things changed.

There are good things and bad things about a move in the 2-year in either direction, but in the case of an even higher yield (later and slower cuts than currently expected), I think the bad starts to outweigh the good. For individual investors in money market funds, short-term Treasurys, or interest-bearing accounts, this is a good thing. For capital availability, the U.S. government’s borrowing costs, and the interest cost to banks, this is a bad thing.

Not to mention, the yield curve is likely to stay inverted. There’s no telling what would happen in the 10-year Treasury yield, but even if we assume a uniform rise, a move toward 5.2% in the 2-year would put 10-year yields at roughly 4.9%... The last time the 10-year yield was at 4.9% the S&P was 16% lower at 4,200.

Higher yields are likely to become untenable for investors — either because of the absolute level, or because of how long they’ve lasted.

Don’t Forget About the Dollar

We sit at an interesting juncture in the world where central banks are now moving in different directions. This is having a strong impact on currencies, particularly the dollar, which continues to strengthen against most foreign currencies.

In a very straightforward environment, a country’s currency strength or weakness follows its interest rates up or down, respectively. Given the recent rise in yields, it’s only natural that the dollar has strengthened too.

If rate cuts continue to be pushed back, and are expected to move even slower, the dollar is likely to continue its rise.

Given the current trend, looking at sector performance in an environment where the dollar strengthens further might be useful for portfolio positioning.

What’s surprising right now is that despite recent dollar strength, the current level doesn’t hit our threshold for a notably “strong dollar” environment… but we’re close. The current U.S. dollar spot rate is trading at roughly $106, it would move into “strong” at about $108.

A more interesting piece of this puzzle is that the sectors that outperform during strong dollar environments are defensives — staples, health care, and utilities. That’s because generally, the dollar is seen as a safe haven asset during times of global stress. So it’s not that simple to say a stronger currency is good, strength may not come for the reasons investors want it to.

This period is quickly turning into the next act of a movie about a global experiment in monetary policy. History has not served as the guide we hoped, which makes the future more murky. Markets seem to be feeling that lack of visibility, and global central banks are trying to protect their own financial systems against mounting currency and rate divergences.

I think we’ve moved back into an environment where anything could happen, and headline risk is high. Staying invested is still important, but we need to choose our assets wisely and measure our risk tolerances carefully given the circumstances.

Want more insights from Liz? The Important Part: Investing With Liz Young Thomas, a new podcast from SoFi, takes listeners through today’s top-of-mind themes in investing and breaks them down into digestible and actionable pieces.

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Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young Thomas is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Her ADV 2B is available at www.sofi.com/legal/adv.

Following your dreams can be hard. But as much as it is about perseverance, it’s also about making smart choices.

One person who has found a way to combine what makes her happy with what she is good at and how she can pay her bills is Peloton (PTON) instructor Ally Love.

Love appears on the TODAY Show and has hosted Brooklyn Nets games at Barclays Center. She’s also a model, and the founder and CEO of Love Squad, which aims to empower people “through conversations that educate, motivate, and inspire.”

But it wasn’t always easy: At one point she was a young dancer in New York City trying to make a living, she said on SoFi’s YouTube series Richer Lives, where she talked with Brian Walsh, SoFi’s Head of Advice and Planning, and financial literacy advocate Vivian Tu, aka Your Rich BFF.

Realizing that dance wouldn’t allow her to live comfortably in New York City, she “had to make a choice” between gutting it out as a dancer hoping for her big break, or leaning into other parts of her multifaceted self, exploring modeling and other opportunities.

Be Flexible

Love said she likes to think of work-life balance as having seasons in her life. Sometimes, it’s a busy season. Other times, it’s a calm season when she can take time off to heal mentally and emotionally.

She said recognizing when to hit the gas pedal on your work life is important.

“Your life isn’t always exactly the same,” Love said. “When it's time to make a big purchase, things will shift. The priorities shift, the projects will shift, what matters shifts. So that means maybe taking a few more jobs.”

Ask For More

Another lesson Love learned when building her career: It’s important to negotiate. Asking for more money can be difficult or uncomfortable for some people.

But the “worst thing you can get is a ‘no.’ So you’re going to be where you are now. But what if you can turn that into a yes, a maybe, or a roadmap?” So even if you don’t get a pay bump, asking for one could give you important skills or experience that might help the next time you want to ask for more money.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

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Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.