CLA Outlook — Key Insights for Sound Financial Strategies

Economists are closely monitoring upcoming inflation reports from the U.S. Bureau of Labor Statistics as these reports may influence Federal Reserve monetary policy and stock and bond markets. Given the Fed’s current restrictive monetary policy and modest growth in real M2, it’s likely the inflation reports come in at or below market expectations.

Since late-2024, the U.S. dollar has fallen about 10% against other major currencies. The U.S. dollar weakness has bolstered U.S. multinational and international equity prices, increased precious metals prices while making oil and industrial metals more affordable to non-U.S. buyers, lowered the debt servicing costs of emerging countries, and increased travel costs for Americans.

The One Big Beautiful Bill Act makes the QOZ program permanent beginning January 1, 2027. Changes include five-year rolling deferrals of capital gains, a 10% basis step-up on deferred capital gains if the QOZ investment is held for five years, designating new QOZ census tracts every 10 years, narrowing the definition of low-income communities, and creating rural QOZ funds with a 30% basis step-up provision and lower substantial improvement tests.