Your Money

During an interview last week, Federal Reserve Chairman Jerome Powell indicated the central bank was ready to slow the pace of rate hikes. The Dow Jones responded with a 700+ point rally, then gave it all back in the subsequent trading days as whispers and follow-on comments gave pause and reinforced a more aggressive stance down the line.

Why do interest rates matter to stocks? The answer is more complicated than this, but a lot of modeling and positioning goes into discounting a company's future cash flow with a higher rate. They say the stock market is forward-looking, and any glimpse into the Fed's endpoint (the "terminal rate") makes analysts tweak their models a little more.

So, who is the most powerful man in the universe? Is it Elon Musk, Xi Jinping, or Pope Francis? Of course, every child of the 80s knows the real answer is He-Man. But lately, according to the way he moves the market with every breath, it might well be Jerome Powell.

Fed Could Pencil In Higher Interest Rates Next Year While Slowing Rises in December
by Nick Timiraos

Your Life

Should you use a credit card or a debit card? First, it helps to know the difference between the two. They work almost identically; however, a debit card makes you spend money that you have, versus a credit card allows you to spend more than what you have. A debit card is linked to your checking account and a PIN and deducts money from your balance when you use it to pay for purchases. You can also use your card to pull out cash from an ATM or get cash back in certain stores. Credit cards are linked to a revolving line of credit that you can draw against as needed. You may carry a balance month to month, but you'll be charged interest. You will also be required to make a minimum payment; otherwise, you could be charged an additional fee. There are many specialized types of credit cards. Some offer rewards such as cash back. Others may be designed for travelers, students, or businesses. Some cards provide incentives for balance transfers.

If your physical card or debit card information falls into the wrong hands, a criminal has direct access to all the money in your checking account. Whatever is spent fraudulently is immediately gone from your balance, and you're out the cash until the situation is sorted out. You might get a positive resolution from the bank, but you must inform them immediately, and you may still be liable for a portion. In addition, any other accounts tied to your debit card are at risk for removal by the thief.

Often, credit card issuers will not hold cardholders liable for any unauthorized charges at all. And if you have your physical credit card but the account number is stolen and used to make fraudulent charges, you aren't liable at all. Plus, since credit card purchases are made against a line of credit and don't draw directly from any bank account, your personal funds aren't put at risk if the card is used fraudulently.

Debit card advantages: help control spending, save money on interest, and get cash.
Credit card advantages: keep your finances safer, build credit, purchase protections, and more rewards.

Credit Cards vs. Debit Cards: What Should I Use?
by Casey Bond

Complexity Simplified

Trivia