Week InReview
Friday | Jan 28, 2022
How to retire now(ish).
Illustration: Derek Zheng for Bloomberg Businessweek
AFTER YEARS of watching strong markets swell portfolios, many recent and would-be retirees are in a nice spot — on paper. But it may be an awkward and anxious moment emotionally. The assets that sent account balances to such heights – particularly a handful of big U.S. technology stocks – now look expensive by many measures and have been showing some weakness this year. At the same time, reducing your exposure to stocks feels dangerous with inflation running at the highest rate in decades, eating away the modest returns of more conservative investments. And with the rise in interest rates seen by many as just getting started, bond funds look vulnerable to losses.

— Bloomberg Wealth | Finance
let's recap...
Jay Powell repeatedly dodged questions about the central bank’s thinking now that inflation appears to be persistent. Illustration: Financial Times
Powell opens door to faster rate-hike path to curb inflation
Federal Reserve Chair Jerome Powell endorsed an interest rate hike in March and made it clear that policy makers would act as needed to cool the hottest inflation in 40 years. The central bank will start to shrink its balance sheet after rate increases begin. Traders seized on Powell’s comments in the press conference about the current economic expansion being very different to the one the last time the bank tightened, and are now pricing in five rate hikes this year. As the Treasury market moved to price in more aggressive tightening, stock traders reacted to the message that the Fed may be less concerned with financial markets. 

The U.S. economy capped off 2021 with another robust quarter of vigorous growth that helped to cement the fastest full-year rebound since 1984 as the country began to move past the worst of the economic damage inflicted by the coronavirus pandemic. U.S. gross domestic product expanded 6.9 percent on an annualised basis in the fourth quarter, up from 2.3 percent growth in the third quarter, the commerce department said on Thursday. That topped economists’ forecast for a 5.5 percent advance, according to a Reuters poll. (Financial Times | Jan 27)

The Federal Reserve’s hawkish shift is bolstering the case for investors looking to trim risk from their portfolios, as the U.S. central bank trains its guns on surging inflation while giving little indication that it will be swayed by the latest weakness in stocks. After the Fed's easy-money policies helped the S&P 500 soar from its March 2020 lows, investors must now contend with uncertainty on multiple fronts as the Fed gears up to raise interest rates and shrink its nearly $9 trillion balance sheet. (Reuters | Jan 27)

Federal regulators proposed measures that would significantly increase their visibility into private-equity funds and some hedge funds, the first in a range of plans to expand oversight of private markets. The Securities and Exchange Commission voted 3-1 to issue a proposal that would increase the amount and timeliness of confidential information that private-equity and hedge funds report to the agency on a document known as Form PF. The main goal, Chair Gary Gensler said, is to allow regulators to better spot risks building up in private markets, stepping up an effort that began after the 2008 financial crisis.
-- The Wall Street Journal

A barrage of upcoming data on the U.S. economy, wage growth and prices is poised to turn up the temperature of an already-heated debate about the persistence of inflation. The employment cost index, which Federal Reserve Chair Jerome Powell cited in December as a key reason for the central bank’s pivot to a more aggressive stance on inflation, is seen registering a fourth-quarter gain nearly on par with the record increase in the prior three months. (Bloomberg Business | Jan 26)
the cyber cafe
Photo: Bloomberg
What happens when Russian hackers come for the electrical grid
Emergency training at a restricted facility off Long Island has aimed to minimize the potentially catastrophic effects of a cyberattack on U.S. power infrastructure.

SEC looks to boost cybersecurity rules
The Securities and Exchange Commission is exploring ways to improve cybersecurity in capital markets, including by extending compliance obligations to companies that currently don't have to meet them, Chair Gary Gensler said Monday. Gensler said the agency is considering extending a rule known as Regulation Systems Compliance and Integrity, or Reg SCI, to large financial firms it doesn't currently cover, such as market makers and broker-dealers.

Now is a good time to update your recovery eMail addresses
With an abundance of password managers, browsers, and mobile operating systems all making it easy, and more apps adopting fingerprint or face recognition support, logging into our numerous accounts is more straightforward and seamless than ever. It's important not to get complacent though — whether it's through moving to new devices or because of shady activity that hasn't been authorized, plenty of users still find themselves locked out of their accounts on a regular basis.
— Wired
binge reading disorder
Photo illustration: 731; Products: Vendors; Background: Getty Images
The 'Year of the Tiger' is upon us. Here's how to ring it in right.
Some people celebrate the Lunar New Year by wearing red to symbolize good luck, while others use it as a reason to embrace one of the spirit animals from the Chinese zodiac that rotate through every 12 years. This year, it’s the tiger — and fashion houses, Italian porcelain manufacturers, and Swiss watch brands have created gorgeous pieces to consider. Some are subtle, nodding to the colors of a tiger’s fur, while others make unmissable statements with bold designs.

Google has a new plan to kill cookies. People are still mad.
Google's plan to remove third-party cookies from Chrome hasn’t gone smoothly. Back in January 2020 the company announced it would overhaul Chrome by removing cookies that follow people around the web within two years. Well, now it’s January 2022 and Google is back with another plan. This week the company announced it was scrapping Federated Learning of Cohorts (FLoC), a key part of its plan, and replacing it with a new system called Topics.
— Wired

Experian to allow consumers to create their own credit reports
Experian PLC, one of the largest credit-reporting firms in the U.S., this week will start allowing consumers who don’t have credit reports to create them from scratch. The company plans to pitch credit cards that consumers who sign up for this service are likely to get approved for. This includes credit cards from Capital One Financial Corp.and fintech Petal, which specializes in lending to consumers with limited credit histories. Issuers pay Experian for leads that result in card openings.
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