Taylor Swift & The Debt Downgrade

I hope you've been having a good summer so far.?We've had a musical summer since the kids got back from sleep away camp (They had a blast!) with family outings to see the last show of Dead & Co. and then got to see the amazing Taylor Swift.?As much as I love the dead, I am a Swiftie through and through.?She is not only an amazing singer/songwriter, but is also an amazing business woman, philanthropist and an economic game changer.?Since her tour began, she has been donating to food banks in every city and there have been a multitude of stories on how much economic benefit she brings to each host city.?Her recent concerts in Los Angeles created a $320 million?GDP bump to Los Angeles County and is estimated to have “a total economic impact of $5 billion to be generated by end of the Eras Tour.”

https://www.nbclosangeles.com/news/business/taylor-swifts-eras-tour-brings-320-million-to-los-angeles/3201563/

?What's Up With the Debt downgrade?

You may have seen news about Fitch downgrading the US government's credit rating. This isn’t the first time this has happened.?In 2011, Standard & Poors (S&P) downgraded the US credit rates from AAA to AA+.?The only other major credit rating agency, Moody’s, still has the US rated AAA.?JP Morgan put out a good piece after the downgrade that is worth a read.

https://www.jpmorgan.com/insights/outlook/market-outlook/us-debt-downgrade-should-you-be-worried

I’ve summarized some of the points below:

• What I am not worried about:

·?????Default - The US is in a strong position to keep making interest payments

·?????Today’s Economy - The job market is still strong and consumers continue to spend

• What I am worried about:?

·????????Potential Government Shutdown - The budget for the new fiscal year has to be approved by September 30th.?One of the reasons Fitch cited for the downgrade was lawmakers inability to come together to avoid debt ceiling and government shutdowns.

• What I am worried about longer term:

·?????Government debt - A lower credit rating will likely make borrowing more expensive and as interest payments pile up it will crowd out spending on other domestic priorities.??

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If you’d like to discuss Taylor, US government debt or anything else, please reach out.

All my best,

Chris

Christian?Ach???| Executive Director??| The Purpose Driven Investment (PDI) Group??|?J.P.?Morgan?Wealth?Management???| 560?Mission?St,?Floor?24??| San?Francisco,?CA?94105??| T:?415-772-3221??| C:?415-215-5139?| Work Mobile: 415-845-8894?|[email protected]??| jpmorgan.com/pdi-group?

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