Speaker 1: Man. You know the thing about these numbers is you
could have any narrative you desire, maybe on one end
of the spectrum or the other. Let's go there that
the economy is slowing down and we're headed for recession.
Or you could believe, well, this is not nearly as
bad as what it could be and we're actually continuing
to grow. Either of those two ends of the spectrum
can be supported with these numbers.
Speaker 2: You're listening to Carrie Lutz's Financial Survival Network, where you
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Lutz. Well Dall Smothers
is with us now, and I'll just tell you he's
the founder of CEO and the big honcho at R
d s Mother's Wealth Management in Kentucky, but he services
the whole country. And I will tell you what chat
GPT said about him. He said he's a seasoned retirement
and income planning expert, Trusted Advisor, radio podcast host, published author,
educator dedicated to helping individuals retire with confidence and stability,
and man, your work's cut out for you now, Dell.
Speaker 1: But oh right, what an intro.
Speaker 3: In the meantime, we've got we've got the job numbers
came out, and you know, the Trump solution is, if
you don't like the numbers, fire the guy, fire the accountant.
Speaker 1: Right, Oh, Garry, that's funny. I love being with you, man,
This is is an incredible show, and I love your
listening audience. We have very similar, I'm sure, a very
similar background in our political beliefs and our philosophical beliefs
around money. But the ultimate correction that came out last
Friday was one of the worst corrections we've seen, one
of the most negative corrections that we've seen in what
half a century or more, uh, since the sixties. I
believe we haven't been that far off with our labor reports,
and so you know, I think Trump definitely could have
tweeted something differently when he fired the chairman. But she
made a major mistake. She oversaw a major mistake. It
was a mistake of significant importance. And I think, Carrie,
it's pretty apparent that if the Fed had seen this
type of number, they would have likely at least put
on the table a twenty five basis point cut, and
it wasn't even discussed.
Speaker 3: Mm hmmm, So what's your take on the numbers there?
Speaker 1: Man? You know, the thing about these numbers is you
could have any narrative you desire, maybe on one end
of the spectrum or the other. Let's go there, that
the economy is slowing down and we're headed for recession,
or you could believe, well, this is not nearly as
bad as what it could be and we're actually continuing
to grow. Either of those two ends of the spectrum
can be supported with these numbers, because if you look
at the revision last week, it does show we are
much worse than we expected to be at this time
a week ago. A week ago we thought we were
in good, strong standings. On Thursday and Friday the report
comes out and it's a pretty significant change. You look
at numbers this week and it hasn't changed much from
last week. And it's not like we are losing jobs.
We just aren't growing as quickly. So both ends of
the spectrum you could say, Hey, we're still growing and
things are well, or you could say, hey, we are
really slowing down here, and the labor market's showing a
sign of weakness in the economy that we don't like
to see. At the end of the day, carry out,
I believe that the market is still in an optimistic
state of mind. I believe that investors still want to
be a part of this American story. I believe that
AI will continue to be the leading edge that pushes
us higher in the S and P five hundred throughout
the rest of the year. But this pause, as healthy
as it may have been, is a direct result of
the uncertainty around the labor market and the economy and
how the FED will react to those numbers. One thing
that sticks out to me, Carrie, not to talk over
you here or not allow you to talk at all,
but one thing that sticks out to me is the
productivity numbers. If you look at those in the labor report,
the productivity numbers show us that the workers who are
still working are far more productive than they've been, far
more productive than we expected them to be. And I
just can't help but think that that's because of AI
and all of the productivity multipliers that you received from AI.
You mentioned Chad GPT right as we came on. It
would have taken you a few minutes to look that up.
And you and I just simply put that into chat
GBT right before we came on, and it was it
of that up in seconds.
Speaker 3: It's great And if it didn't speak so highly of you,
I wouldn't have read it.
Speaker 1: Well, I appreciate it, and I you know you do.
All you got to do is type in who is
carry LUTs and you see a much longer resume.
Speaker 3: But so productivity. And one thing the job numbers didn't
really elucidate or expand on enough is that the number
of American born people holding jobs went up and the
number of foreign born and I don't know whether they're
illegal or legal went down. So maybe it's not all
that negative exactly.
Speaker 1: At the end of the day, the labor the labor
numbers are important, but they're not so important that we
make rash decisions in our portfolio. If you're an investor or,
let's just say, if you're a client of RDS Wealth,
we are not going out based off of one labor
report or another and buying or selling any individual stock
or position. We're not changing your philosophy around your plan,
or what type of return we're seeking, or what type
of risk tolerance we may be taken. These numbers are
really out there for important people to make important decisions,
which is why it's important that these numbers are right.
And in the defense of our current administration, it definitely
could have been handled differently, but the result was supported
by data that we made a mistake. It was a
significant mistake, and whatever it is that we need to
fix it, it needs to be fixed. These labor reports
need to be accurate, especially in times like this, where
even the FED chair himself says we are certainly high
in relation to neutral. The FED rate is higher than
it probably needs to be if we wanted to be
neutral in our policies what he's saying. So it's likely
that had we've seen these numbers again, I think a
twenty five basis point cut would would have certainly been
in discussion and probably came to fruition at the last meeting.
Now we have to wait till September, and Carrie, you know,
I don't necessarily think that it's going to hurt us
or help us. Per se if we get a twenty
five basis point cut. But if that's all we get
this year, I think the market will be a little
bit disappointed. It has priced in much more than that,
in my opinion.
Speaker 3: Yeah, well, you know, the dollar has been weak, so maybe,
rightfully Powell is concerned about that.
Speaker 1: Right, Yeah, that's the other side of the coin, you know.
On the other hand, Powell has every right to say,
we're data driven, and the data just hasn't really supported
a rate cut. Data driven FED no rate cuts up
to this point. Well, if you go back and look
at the data, Donald Trump can complain, and he can
certainly want a rate cut, and he has an argument
to make that it would make the paying down of
the debt easier, but that's not the fed's prerogative. That's
not in the FED scope. And when they're looking at
their two sides that they need to make sure they're
maintaining inflation and labor, well neither of those really call
for any immediate action. There's sometimes no action is a
good action, and that's the stance that the FED has taken,
especially with a weaker dollar.
Speaker 3: Yeah, rightfully, so, and you know we're not like historically,
the rates are not high. Now, right, you could argue
that mortgage rates maybe are one hundred basis points higher
than they should be, But a five percent mortgage when
I grew up well, in the sixties it was two
three percent, but in the seventies and eighties it was five.
You know, god who went up to twenty something percent.
Five percent over time is a normalized rate. So I
don't think you can complain that Powell has effectively normalized
interest rates.
Speaker 1: You're right. And you know the thing is, anybody can
complain about anything they want, and clearly Donald Trump our
plaints until he gets his way, right, Yeah, exactly, you're
supposed for that. You're supposed to complain. But when you
look at it from the scope of history, you're right.
And if you look at the labor market from the
scope of history, we're we're not in dire need of
a rate cut. The labor market's not weak at all.
Even with the most recent revision, it's not weak. It's
can get a lot worse. And you know, it's that
old adage of if if you lose your job, it's
a recession. Oh excuse me, if your neighbor loses his job,
it's a recession. If you lose your job. It's a depression.
That old adage holds true in many walks of life.
And when it's hard for us to purchase a house,
that the appreciation has went through roof. See because in
the sixties and seventies, and especially in the eighties, when
interest rates were at twelve and fifteen percent for purchasing house,
home values were what three times less than what they
are now, four times less than what they are now.
So it's all relative to an extent. And if you
ask me, I think that the market as a whole
has gotten spoiled. We have talked about this in past shows,
the Sugar High, right, their Sugar High, and the FED
at one point was handing out pixie sticks, continuing the
cut rates, continuing the cut rates, and at the end
of the day, twenty twenty five just hasn't given us
the pixie sticks that the Fed had promised at the
beginning of the year and that the market had desired.
But AI and solid earnings and a new trade agreement
across the globe has led the market higher in spite
of the Fed's decision.
Speaker 3: Totally. Yeah. So at some point though, they will be
cutting rates, won't they.
Speaker 1: They will be cutting rates. It's very likely. You know,
our stance here at lads Wealthcarey has been we expected
honestly to have one by the end of summer, and again,
had the labor statistics come out, I think that would
have came to fruition. Now we have three meetings left,
and I wouldn't be surprised if we see a cut
at all three of them.
Speaker 3: So twenty five fifty basis points they'll have to make
up for what they didn't do this month.
Speaker 1: Right, possibly, possibly, I wouldn't be shocked at that at all.
Seventy five point cut by the end of the year
is certainly on our Bengo card. Fifty is almost a
shoe in in our opinion. And what is it three?
If I'm not mistaken, we have three three additional meetings
for the rest of the year to make it happen.
So we're looking at.
Speaker 3: Maybe we'll get a total of one hundred basis points
off the rates by the end of the year.
Speaker 1: And then guess what, and then guess what? Donald Trump
was right again, isn't that crazy? It's wild? It's work? Yeah, no,
please go ahead.
Speaker 3: So what are you making of the deficit and the tariffs,
which is bringing the deficits down dramatically. Right, Oh sure, sure.
Speaker 1: I mean, you know, in a perfect world, I think
Donald Trump has an incredible mission and a vision for
what tariffs could be, and American people could get behind
this to eliminate the need for income tax and to
bring in enough tariff income. The only issue with that
is that if we really want to onshore companies, then
tariffs eventually could very easily go to zero if everybody's
making everything in America. Again, if we're in a theoretical world,
if everybody is making everything in America, then there are
no tariffs, or at least no tariff income. So you know,
at the root of this, I think that the tax code.
I know we're shifting here completely, but the tax code
should certainly be reviewed. Some sort of overhaul about the
tax code and how we pay taxes is something that
has has been front and center for the last six
to eight months. And understanding that tariffs could theoretically, for
the short term, eliminate the need for income tax. In theory,
I don't think that the math would work out, but
in theory, uh, I would love to see someone step
up and say, now it's finally time for us to
consider a consumption tax across America. Now we have illegal
immigrants spending money to buy things and paying for a
national tax. Now we have billionaires spending money to buy
their yachts and paying a national income tax. It's not
income tax any longer. It's just a higher sales tax
that goes to the nation's budget. You know.
Speaker 3: In effect, the tariffs are a surrogate for that. When
I think, because they're strictly consumption based stuff, you know,
I could get hit with it and the way he's
structuring it. Certain things we got to buy energy whatever
less tariff there or no tariff, and other things we
got to hire tariffund Well, it's interesting phenomena and appreciate
you coming on.
Speaker 1: Dale.
Speaker 3: Just tell us where do we find you? How do
we connect with you?
Speaker 1: Yeah, Kerrie, anybody who is interested can tune into our podcast.
It's The Retirement Matter Show with Dale smothers. Find us
there our Dswealth dot Com. Ourdswealth dot Com will get
you to our website. Our entire team is here standing
by to answer any questions or help you in your retirement.
As chat GBT said, we'll start and end with this
retirees face a very unique set of challenges and our objective,
our goals every single day, is to help navigate those
complexities around the income phase of retirement planning. We have
our podcast that hones in on that specifically, everything from
living happy and with the positive state of mind to
how we keep the bank account from running dry in
retirement ears. We help you with that in every aspect.
So again the Retirement Matter Show with Dale Smothers. It's
the Retirement Matters Podcast or Rdswealth dot com.
Speaker 3: All right, thanks so pleasure, Thank you, Kay, talk to
again soon. Questions comments, klatcarrielts dot com. Link to Dell
sites in the show notes of this interview on Financial
Survival Network dot com. If you go there, we just
asked you sign up for you free newsletter like over
seventy thousand people are receiving it now. Dale, appreciate you
coming on. We'll talk to you again soon.
Speaker 1: Appreciate you, Kay, talk soent.
Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,