• The Federal Reserve cut interest rates by 0.25% this week, shifting its focus from inflation to concerns about the job market.
• Inflation data remains largely contained, giving the Fed room to ease policy without signaling panic.
• Markets responded calmly, with both stocks and bonds holding steady after the announcement. A sign that expectations were already priced in.
• The Fed hinted at the possibility of two more cuts this year, potentially totaling 0.75% in reductions by December.
• Historically, when rate cuts occur near market all-time highs, equities were higher one year later. This adds some optimism for the months ahead.
• Small-cap stocks reached their highest levels in four years, suggesting broad market strength beyond just the large-cap names.
• Many clients have asked about bond performance. While account statements may appear muted, the true return includes both price movement and income from dividends, which often aren’t fully visible at first glance.
• With lower rates ahead, bond prices generally rise making this year the strongest for our bond portfolio since 2019.
• The revision of U.S. jobs data by nearly 1 million highlighted how unreliable labor numbers can be; at RPOA, we place far more weight on profits, inflation, and market signals when making investment decisions.
• Advances in AI and corporate efficiency show that company profits can rise even when job numbers soften. It’s a reminder that markets are driven by earnings, not headlines.
• Most importantly, our Invest and Protect Strategy is built to adapt. It’s built to help safeguard your retirement from risks while allowing you to participate in growth when markets are strong.

Transcript:
Ken Moraif
Hello everyone, and welcome to our Market Alert video for today, which is September 19, 2025 and of course, this was Federal Reserve week, where they announced what they did with their interest rates. And we’re going to talk about, did they make the right decision, and where do we go from here, given the decision that they did make. But we’ve got more than just that for you. This week, we’re also going to talk about our bond portfolio, and it’s a little bit confusing for many of our clients. We’ve gotten a lot of questions, so we thought we’d answer those questions and make sure that you are not confused. And then also, we didn’t talk last week about something that, in my opinion, was kind of earth shattering, almost, and that is, they revised the jobs numbers by 1 million jobs, a million jobs. I mean, they were off by a million jobs. So we got to talk about, do it? Should we use jobs at all in any of our investment decisions or not, and so we’re going to dive right into that. I’ll bring Jordan Roach, our Chief Investment Officer, into the conversation. Jordan, good to see you two weeks in a row. Yes, back into South it’s good to be here. Good to see you. You know, before we get going, I got to tell you that we’re going to Houston. Both of us are right to visit with clients down there and do a presentation and have some fun. But right after that, I’m leaving Houston, and I’m going to Austin, because my daughter and her husband are celebrating their wedding anniversary, so they’re going to take off for the weekend, and so I’ve got my four year old and my six month old, my wife and I do for the whole weekend. So that’s going to be a

Jordan Roach
really interesting good there’s gonna be some pain with that.

Ken Moraif
We haven’t done it for a whole weekend with no parents, no help. It’s just gonna be Faye and me, and from what I understand from clients, it’s a pretty exhausting experience, but I’m up to it. I’ve been working out, I’ve been getting in shape. I’m fit. I’m ready. I’m tan. You know, we’re ready for this. I’m gonna

Jordan Roach
hope you are, because my folks did the same thing. We were in Alaska, and we got back late Sunday night, and they were gone before 6am the next day.

Ken Moraif
So we need to find mine. I need my pillow, and I need to be asleep. So, yeah, okay, so we’ll see. But I’m ready. I’m pumped. So let’s talk about the the Federal Reserve, so they lowered interest rates a quarter of a percent, 25 basis points, is what it’s called. And so let’s start off with what led to this. Why did they do it?

Jordan Roach
Well, I think broadly, you know, the Fed all year, the thing we keep talking about, the thing that we’ve heard narrative in the news has been inflation, inflation, inflation. And I think finally they picked up that inflation is not running away. We were worried about, but we’re seeing cracks in the job market.

Ken Moraif
Cracks. How about a million jobs? Revision, what we’ll talk about,

Jordan Roach
we’ll get to that one right? But they were seeing enough to where, again, the second part of that dual mandate they have right that maximum employment, I think they saw that we got to make sure that continues right, because you definitely don’t want, you know, inflation spiking and growth slowing the same time, that’s stagflation. So inflation, they finally saw enough to where, I think they said we got to start easing

Ken Moraif
rates. Yeah, and our economy is like a big, giant oil tanker, and you got to start turning that way ahead of time. You can’t wait till the last second and then try to turn it and so, you know, if the jobs are starting to crater, it may be too late already. They may be behind the curve on that.

Jordan Roach
Are they? Are they actually late? Then we’ll talk about this, I think, at the end here, but yes, we started it, but yeah, has that already shifted?

Ken Moraif
Okay, so that leads then to what was the market expecting? And then what did they do? And was there a surprise there?

Jordan Roach
Here’s where, you know, I think a lot of people have a narrative that maybe, and they probably are the Fed, somewhat influenced by whoever’s in the presidency at the time, but really, who they’re, I think, beholden to, is the bond market. Because I look back over the last like, you know, 20 years, and the Fed is basically cut exactly what the bond market expected each time. So I think, you know, the 25 basis points with the market respecting which is what they delivered,

Ken Moraif
yeah, you know, I always tell the story of how the Federal Reserve doesn’t lead. It leads from the front. No, I’m sorry, it follows from the front. That’s right. You know, I’ve given the example of the old the dog hunt. You know, in old England, the lead dog doesn’t lead the pack. What the lead dog is always doing is looking behind its back, and if the pack went that way, it runs and gets in front of the pack and says, Look at me. I’m the leader. And so that’s what the Fed does with the pack, the fact the pack being the bond market, yes, bond market said, You better lower interest rates, or we’re going to have a 10%

Jordan Roach
I think that’s right. And said that, look, we want to lower them, but we don’t need to start out with 50 basis points, because that could, you know, show that there’s some fear there.

Ken Moraif
Okay, so then they just did 25 basis points. Yes. And in their commentary, they said that the job their focus, in their commentary, was not on inflation. And I hardly, hardly heard any conversation about none. It was all about the job market and all of

Jordan Roach
that even, which was, you know, it’s interesting. They had a little bit of statement there of saying almost weaker than expected. And sometimes the market can get very skittish when we say, the Fed says something about, I’m surprised by this, but nonetheless, the market seemed to be subdued in their reaction. It was kind of what they thought. Yeah, nothing happened. A big nothing burger, which is good. I mean, largely, you know, I thought that we met, actually sell the news a little bit. But I think the market, broadly, stock market broadly, didn’t

Ken Moraif
move. I was watching the bond and the stock market when he announced the 25 basis cut, and really nothing at all happened. But then the follow on the market went way up, and the bond market did as

Jordan Roach
well. We had a little follow on. There. Nothing crazy, but we have a little follow on. And what we’ve seen, it’s interesting is, you know, stocks have largely held, held a little bit of gains through the week and post meeting, you had longer term yields slightly tick up, which interesting is the longer term yields may be kind of saying, Yeah, but what if inflation? What if deficit, whatever, these things, but kind of a subdued reaction, okay.

Ken Moraif
So then the next question is, now we look into the crystal ball and we say, Okay, well, where does this take us? What happens next, given that, and also they said there’s potential for two more cuts this year, right? So we might have 75 basis points by the end of this year. Is there’s that talk, I think

Jordan Roach
it’s very likely we do you know, the next meeting we see in October, then the Fed will have November off, come back in December. I think it is very likely that they did end up cutting again. Now the interesting dynamic here is typically, when the Fed is cutting, it’s it’s cutting for the wrong reasons at the wrong time, which is kind of when we’re seeing like, not just little cracks, but chasms, and the market is already selling off. We maybe have some recession already creeping in. That’s usually when they’re cutting. So you go back and this, you can go back to like the 60s and look at this, when the Fed is cutting near all time highs. There’s been 20 times this has happened the market. And this just, is just context. The markets higher every time. One year later. I use some sell off center, you know, intermediate sell offs. But broadly, if you’re cutting at all time peaks, that’s a far different dynamic than cutting when things are already bad.

Ken Moraif
That’s where we are now. It’s weird. There’s a lot of talk about, oh, about, oh, another all time high. Maybe we should sell. Maybe we should get out. But you’re saying that every time in the past, which does not guarantee the future, but every time in the past that that has happened, where the Fed has dropped interest rates at a market all time high, markets do well over one year period, one year later, the market subquest, right? That’s right, interesting. Okay, well, then that tells us maybe that a year from now, we should be happy, I

Jordan Roach
hope so. And we had another big thing we’ve had today is small caps finally hitting a high that they haven’t seen in four years. So that’s good, you know? So, you know, we’re seeing a little bit of early wins here. I think we’re reasonably optimistic over the next year.

Ken Moraif
Cool. So, you know, I actually want to share a story here, kind of drop one in. So we were coming back from Alaska, and we were in the airport, and of course, we’re all wearing our RPOA Swag, you know, our clothing and all that. Because, you know, we want to advertise right where you go. And sure enough, somebody came up to us, this this gentleman. And he goes, Are you guys with RPOA? And we said, Yeah. And he goes, I’m a SCWPer.

Jordan Roach
That’s pretty good. He’s a vernacular and everything he knew

Ken Moraif
he’s a SCWPer. Yeah, that’s good. So, and for those of you who don’t know what SCWPer is, SCWPer is the acronym. SCWPerS is the acronym for second childhood without parental supervision. So anytime our clients retire, we call you a SCWPer. And so there he was. He was a SCWPer. That was great. I love that fanfare. Yes, all right, so let’s talk about bonds. Because we’ve had a lot of questions from clients about the returns on the bond portfolio this year, and they look really low. It’s like, you know, what do we made three, 2% or whatever it is, on the bonds. Why are we in those terrible things? They’re not making any money. For me, what’s happening there? Yep, so let’s explain that, because they’re actually doing far better than just what you see when you look at your statement.

Jordan Roach
Yes. I mean, you know, the biggest thing when you look at, you know, returns across any asset class, there’s always two components. Broadly, there’s always going to be the price movement, and then there’s going to be some sort of dividend or yield component. And so for our stock portfolio, broadly, you know, most of the returns can be comprised in the price movement alone. There is dividends, but it’s small relative to the average price movement. Our bond portfolio, largely is the opposite, least this year, where you might have a little bit of price movement positive, which we’ve seen, and that’s reflected on statements, but the biggest component of their return this year has been the yield,

Ken Moraif
which is kind of like interest, right, which is the interest they’re collecting, interest you’re getting,

Jordan Roach
and that’s not incorporated into that look. And so what it’s doing is it’s, it’s, you know, artificially pulling down what returns are relative to what actually has happened.

Ken Moraif
So if a bond, and I’m using a hypothetical here, but if a bond made 2% on its price, but it paid 4% on its dividend, then the total return that it made is 6% correct, but that 6% wouldn’t be shown on your

Jordan Roach
statement. No, when they go look and see how’s my bond fund done, 2% Yeah.

Ken Moraif
And then what compounds it is that when the dividend is paid, we rebalance the portfolio, that’s right. And so what that means is, is that dividend gets distributed into everything else as well.

Jordan Roach
That’s right, and it raises the cost basis up. So it even artificially, again, makes it look like it’s not as

Ken Moraif
good, so you don’t see. So what happens is the bond dividend is actually put into the stock side, which maybe stock side looks better because it was bought into, yep, and the bond side looks like here, with dividends left, yeah, nobody

Jordan Roach
left, right. So it’s that is an important thing. So understanding, and that’s true of, you know, the we own broadly, two different types of bond funds we can for clients. And that dynamic is true of both.

Ken Moraif
Yeah, so overall, you know, as I’ve looked at the returns of our bond portfolio, they’ve done quite well, right? You know, I mean, relative to and especially now that the Fed is going to start lowering or lowered interest rates, and the trend seems to be they’re going to be doing it more bonds love that. So now we’re going to have the yield come down right, which drives the price up. So we have the opposite of what we’re just talking about. Will happen? We should see the returns start to look better, good, yeah, but the dividends should start to trend downward.

Jordan Roach
That’s right. I mean, if we have longer term yields start coming down a little bit in line with what Fed’s doing, then yes, the price component would would come up. And so yeah, this year actually is the best year for our bond portfolio we’ve had since 2019 which was wind up being a very, very good year. So yes, bonds are doing better than what it

Ken Moraif
appears on the statement. That’s right, yeah. And then, you know, like I said, it’s just when the dividend comes in, it gets distributed all over the place in the portfolio, it does. And so bonds don’t get the 11 that they they show All right, so let’s, let’s dive into this one and and, ladies and gentlemen, I just want to make sure that you understand that this is not a political show, and I’m not taking a political stance about anything. Okay, so please do not misunderstand this. But we, we didn’t talk about this last week, but they came, they came in with the jobs revision for the previous year, and they, they said they missed by almost a million jobs, wildly high, 1 million jobs, whoopsies, that is, I can’t even, I can’t even process that number. How can you be that far off? And you know, if I say this with all love and respect, right? But if you kept giving me bad data that I’m supposed to make decisions with, and you’re revising it every every quarter or every month or whatever, and so you’re already revising it, right? They’ve been revising it all, all along. You know? They Oh, we revised last quarter, we revised last quarter, and now we’re going to revise the whole year. And guess what? We’re even wrong by a long shot for the whole year. If you’re me, what would you do to

Jordan Roach
you? I think I probably wouldn’t be in this room with you right now. Most likely you would

Ken Moraif
find that’s it, right? I mean, I can’t make decisions if you’re constantly giving me bad information. Absolutely not. So, you know, again, I’m not being political here, but that lady that was in charge of those of that data, and that’s what she presents to the President and to, you know, and decision makers and investors like you and me, you know she deserved to be fired. She should have, if she didn’t come up with this is all a mess, and we need to fix this on her own. Then maybe she’s she shouldn’t be in that job. So again, not politics, just are you competent in your job? All right, so now let’s look at how we use jobs data. All right, because it’s so unreliable, and because we it gets revised, it’s basically just noise, we can’t rely on it whatsoever. So how much do we when we’re making our investment decisions, our sanity checks, all the stuff that we do? How much do we rely do we give gravitas to the labor market and jobs data

Jordan Roach
zero, we talk about it, right? I mean, we’d love to incorporate some level of another economic data point, but, you know, we’re looking at all these different indicators. How do we incorporate make good decisions that came up with, like, just, there’s too many revisions month to month, quarter to quarter. There’s no way we can use this to make timely investment decisions.

Ken Moraif
You can’t. It’s worthless. It’s not incorporated, yeah, we just do it out and in today’s day and age. How can this data be so off? You know, we must be using processes that were invented, you know, back in the 60s or something, because for us to be that far off, particularly when we’re. Raising it every stupid month. Yes, you know, it’s not like we suddenly woke up a year later and Oh, darn, we missed. No, we’ve been revising it every single month, and then at the end of 12 months, oh, we have to revise it even more by million jobs. It’s it is impossible for me to to understand.

Jordan Roach
It’s not a clear picture. I mean, maybe you could use a trend, but, I mean, you’d say maybe you could use on a trend basis, over longer periods. But I don’t even think with this revision, this revision, and there was actually one last year that we didn’t talk

Ken Moraif
about too much, 800 like you just can’t. So you had the two of them, and in two years, they were all no idea. Almost 2 million jobs. You have no idea what’s going on. They don’t. Now, here’s something that I think is going to exacerbate this problem, and that is AI. You know, I think when you see what AI is doing, you know, Salesforce announced that they’ve laid off practically all their programmers, and Microsoft is following suit, and other people are there. You know, entry jobs that people thought were, this is where you go, if you’re a young person and you want to, you know, have a successful career. All those things are being wiped out by AI. I think we’re going to see a lot of joblessness caused by AI, but I don’t think because, again, we’ve always said this, the the stock market and the bond market are not driven by jobs, right, right? They’re driven by profits, yes, right, so and inflation. So therefore this whole jobs thing may become even more irrelevant, because as Salesforce, for example, lays off 2000 people. Guess what that does to their profits? Oh, yeah, way up. That’s right. And so their stock price probably will move up also because it’s driven by profits, and they’re getting the same job done. So their productivity just went up tremendously. So I think as AI starts to become more and more of an influence on jobs. I think jobs are going to become even more and more irrelevant. I think

Jordan Roach
it’s a really interesting dynamic that we’re going to have to work through, you know, broader, right economy, and even us at our firm. I mean, if we look at it, in the last four years, this has been one of the head fakes, or everybody’s been predicting recessions. We’ve had a bunch of layoffs started in 20 started in 2022 we’ve had layoffs and people looking for work, and all these continuing claims and new claims coming in. Your market goes higher, and this could be the start of it saying it’s not hurting the profitability necessarily, of these companies. Yeah, they can produce the same with less.

Ken Moraif
And you know, you and I have talked about this where, why don’t we just say no to AI? Why don’t we as a human race, just say no to it? We don’t want this. It’s going to cause massive unemployment. It probably is going to replace humankind, and I can’t think of anything. Machines won’t be able to do better, faster, cheaper than humans plus percent of the economy. Yeah, probably right. So we’re creating this, this thing anger, that is, you know, and maybe one day it wakes up and says, You know what, I don’t like you anymore. You like the matrix, right? You’re just inefficient. I’m going to get rid of you. I don’t know. Maybe we should just say no to it. Let’s, let’s live with what we got and be happy

Jordan Roach
we got it pretty good, right? Now, I think we’re okay. We are yes, yes.

Ken Moraif
Anyway, ladies and gentlemen, that’s our market alert video for you this week, longer probably than some of the other ones that we’ve made for you, but we wanted to cover several topics for you. As always, I hope you out there in SCWPer nation are enjoying your second childhood without parental supervision. And for those of you who are not SCWPerS yet, our job is to get you there and help you to stay there. We hope this video found you healthy, wealthy and wise, and as always, please like and subscribe. It helps us tremendously. We really appreciate it if you would do that, and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023