Investment Outlook 2024: Is the growth momentum sustainable?

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Hello. I'm Bill Northey, senior investment director with the asset management group here at U.S. Bank Wealth Management. Welcome, and thank you for joining us today. 
Market dynamics continue to evolve with investors focused on the upcoming election, economic growth, inflation, interest rates, and equity markets at all time highs. Today's goal is to provide you with an update and some insights on how you might be able to apply this to the upcoming election cycle capital markets. And importantly, we'll discuss portfolio and planning considerations that can give you confidence that your financial future is on track. 
More than ever, it is critical that you focus on your goals and objectives, and a financial plan is the best way to keep you on track towards those goals. As always, our wealth management teams are here if you have any questions or you want to walk through your specific financial situation. So before we get started on our topic today, I'd like to familiarize you with the webinar platform that we're utilizing. 
It feels a lot like a computer desktop, but just to help everyone orient, you have the ability to customize your screen by moving or resizing the various modules that are in front of you. Simply drag on the corners or the edge, and you can resize. To move one, simply grab the top bar and move it to a preferred location. You can hide any of the boxes by clicking the X in the upper right hand corner, and the buttons at the bottom of your screen will also allow you a variety of controls. 
And there's a button to refresh should you wish to reinstate it to its default state. Most importantly-- and this is what we want to hear from you-- on the bottom of your screen, there is a tab labeled questions. And if you click on that tab, you'll be able to submit any question that you may have during the course of our conversation today. And if we don't answer it with the regular content, we'll be sure to follow up with you directly afterwards. 
With that, I'd like to welcome our presenters for today's event. Today we are joined by three returning guests to the webinar series, covering from coast to coast. We have Eric Friedman, Chief Investment Officer at U.S. Bank Asset Management Group; Kate Phelan, Regional Director of Wealth Planning for US Bank Private Wealth Management; and Kevin MacMillan head of Government Relations for US Bank. Welcome, and thank you for being here. We appreciate all three of you coming back and being a material contributor to our conversation today. 
So today, our goal is to have you walk away with some key insights and practical guidance that you may want to consider in the current environment. To start, we're going to have Kevin talk us through the current state of the election cycle and, most notably, the developments around the presidential elections that are upcoming in November. Then Eric will provide an update on capital markets and the investment outlook for the balance of 2024, and Kate will walk us through important planning and tax considerations. 
Finally, we will conclude with a roundtable discussion with the speakers today. So with that, I'd like to invite in Kevin MacMillan. And Kevin, we'll have you give a quick update on the presidential election. Thank you for being here, sir. 
KEVIN MACMILLAN: Thanks, Bill, and thanks, everyone. It's wonderful to be with you today. To say that we've experienced a political hurricane or tornado, an earthquake over the past really three weeks or a couple of weeks is almost an understatement. We saw an assassination attempt, an RNC convention where the-- JD Vance was selected as the vice president. And then just over the weekend, just a couple of days ago, President Biden has said that he's going to step aside, and Vice President Harris will be contending for the nomination and for the presidency. 
There's still a lot of pieces of the puzzle to come together. We're going to find out who Vice President Harris will tap as her running mate. I think that there is a very short list of candidates for that, whether it be the governor of Pennsylvania, Kentucky, North Carolina, or possibly Mark Kelly, the Senator from Arizona. But that's really the list. 
My understanding is that they're all being vetted, and there's a few rising to the top. But I expect we'll see that determination in the next 48 hours or so. And then the vice president-- Vice President Harris-- will have to receive the actual nomination. And it's a very interesting time right now. 
We're 14 weeks until the election, and the Democrats currently have no official nominee, if you will. We expect that by August 7th, the DNC will meet virtually prior to their in-person convention and will nominate Vice President Harris as their candidate. That's important for a lot of reasons, not the least of which that it's going to designate who is on the ballot. And it will allow campaign finance cash to move from the Biden-Harris campaign to the Harris/to-be-named-later campaign. 
What I would say about these developments, obviously, they're historic. It's obviously an incredible few weeks and few days of political activity. But really, what it's done, I think, for national Democrats is it's injected a lot more enthusiasm into the Democratic Party and into the voters, really, ultimately-- the voters and the donors that are looking to back a Democratic candidate. I think that President Biden was losing the enthusiasm vote, if you will, following the-- his performance in the debates and then really wasn't able to pull that back. 
But now that Vice President Harris will lead the ticket, I think you're seeing a lot-- obviously, you're seeing a lot of Democrats come back into the fold. There was an enormous amount of fundraising that occurred in the course of 24 hours following the announcement. It's a true passing of the torch. And I think one of the most interesting tidbits that I've gleaned from following this over the past couple of days is this is the first election since 1976 that there will not be a person named Bush, Clinton, or Biden on the ballot. 
So really kind of amazing to think about it that way. And it's really a new step and a step forward in the political discussion that this country has been having over the years. We'll look forward to talking to you in the group here a little bit about the impact on policy as we go forward and think about what a Harris administration would look like and what a Trump administration might look like. The polls are incredibly close. 
I will say that it does appear that Vice President Harris has slightly narrowed the race in the past couple of days. But there are over 100 days until election day, and so there will be a concerted effort from each campaign to define the other and promote itself. So there will be a real race. I think that that was in question just a couple of days ago. 
It looked like Former President Trump was basically going to glide to a victory. And now I think that that changes significantly. One of the bigger impacts is the impact down ballot, in my opinion, when we see-- when we look at control of the House and the Senate. That will-- that is changing, I think, and evolving with Vice President Harris at the top of the ticket. 
Swing districts in states like New York and California and blue states like New York and California maybe have more of a chance to transfer to the Democrats rather than the Republicans. And that, given the narrow majorities in the House of Representatives in particular, that is a, I think, a significant impact. So those races, the dynamics there have changed significantly. 
With that, Bill. I'm happy to take some questions as we go forward and continue the discussion on what the outlook is from our perspective. 
BILL NORTHEY: Yeah, I appreciate that, Kevin. And you always bring us tremendous insights sitting in the eye of the hurricane there in Washington, DC. And we'll come back to you during the Q&A section. I think we have a couple of clarifying points that we'd like to ask, but appreciate you being here. 
With that, I'm going to bring in our Chief Investment Officer, Eric Friedman. And, Eric, I'd ask that you provide us a little bit of an update on how we're viewing the capital markets and investment outlook for the balance of 2024, a year in which we've already seen very strong returns across the equity markets. 
ERIC FREEDMAN: Well, Bill, thank you very much. It's really great to be with you. I do have background envy. I'm in a very nondescript conference room at one of our offices here at U.S. Bank. But I promise I'm locked in in terms of the discussion today. 
Let me also say that our marketing team continues to display tremendous prescience when they schedule these events. There's always some big event that occurs either just before or maybe the week before. So as always, thanks to our marketing team for gathering such an opportunity to convey our views with clients. So, Bill, we think that for all of the considerations that Kevin so deftly laid out that this is a market that's focused on lots of different things. 
But we still think the predominant factor driving markets is interest rates and consumer activity. And to be clear, we do think the presidential and the Congressional elections do have implications for both. We'll spend some time talking about that in just a minute. But our vantage point is that we still think this is a glass half full, optimistic perspective with respect to diversified portfolios. 
In other words, we think this is still a good time for clients to make money. We think this is an opportunity, again, across stocks in particular. We favor stocks over bonds right now. But again, having a diversified portfolio, also having a plan. My colleague, Kate, will be on in just a second to discuss how important that is. 
And Bill, you mentioned it earlier, this is as good a time as any to really make sure that you're solidified with your goals and your plan to achieve those goals. So that's what we want to make sure that we spend some time covering today. So I'd be remiss if not talking and really starting with thoughts on the consumer, which we have on this first slide here. 
And really, the point that we want to make is that we use this analogy quite a bit. I think it's a pretty helpful visual representation of what's happening in the world around us is that think of the consumer like a runner on a treadmill, and then think of that treadmill having a ramp, which actually is symbolic of interest rates. The Federal Reserve, literally for the past year, has had interest rates at 5.5% in terms of their upper target. And they've really left them there for, again, 52 straight weeks. 
And so similar to if you go to a YMCA or a Planet Fitness and you see people starting out on a treadmill at the same time with the same ramp height, eventually someone's going to start to slow down. And we're starting to see that runner slow down a bit in the form of lower income consumers, in particular, having a hard time with debt cost, also trading down a bit from what they may have experienced coming out of the pandemic. And so you'll see that on this chart, we actually have a pretty good depiction across several things, what's happening with the jobs market, what's happening with income borrowing, spending, and delinquencies. 
Again, how fast are people paying back their debt? On average, we'd say that the consumer is about at average. In other words, they've gone from about an eight or a nine, which is a pretty strong rating, down to about a five as a broad cohort. But we do think there's some differentiation across different income strata, if you will, across this country. But again, we still think, consistent with our glass half full perspective, that the corporate profit cycle is still strong, and consumer spending will remain intact but probably will level off somewhat from current levels. 
If you go to the next slide, you get a snapshot of, again, one of the most important factors that we're looking at is the idea of actually people taking home income that is above, on a real basis or net of inflation, the price increases surrounding them. It doesn't necessarily feel that way right now, Bill. It doesn't necessarily feel like that incomes are exceeding the cost of goods. But that's actually what we're seeing across the data. 
And so when people are taking in more capital than they're outlaying with respect to the price, that generally is a decent environment for consumption. If you layer on top of that, still a decent environment for home price appreciation. That tends to lead spending and spending trends, which we think are positive. We have to pay attention to the next slide, which gives you a snapshot of inflation. 
And that has been, of course, the fact that the federal reserve, as that proverbial personal trainer, really ramping up the treadmill resistance. That's what they're really focused on. And we've had some abatements of inflationary pressures over the past couple of quarters. Now, specifically, last month was probably the most benign consumer price data that we've seen in some time. 
And we're also starting to see a little bit of a slowdown in the jobs market. Again, we don't want to have a rollover in the employment markets. but some level of wage growth settling as well as the, let's call it, the buoyancy of labor markets starting to slow down a bit, that's probably a good thing for inflationary pressures. So again, these are factors that are very important to us. 
Now, as I reconcile my earlier point about how congressional and presidential elections may have an impact on macro markets, the next slide is probably the biggest one that we're focused on, which gives you a snapshot of the Congressional Budget Office's projections for indebtedness for this country. Right now, we owe about $1.05 for every dollar of GDP that we produce. That's not sustainable math over time. 
So policies that may emerge-- whether it's foreign policy, trade policy, what it means for immigration, what it may mean for tariffs-- these are all factors. Again, taxation, spending levels, all of these factor into indebtedness. And we start to see the outer bounds, if you will, of foreign lenders to Uncle Sam really allowing us to keep increasing our indebtedness. 
Again, it's not a Republican issue or a Democrat issue. It's an everybody issue. That's something that will play out in markets, we think, over some time. So we're very focused on how the bond market is responding to policy sets that Kevin and his great team do such a nice job of thinking through on our behalf. So last slide for me is that for now, the idea that this is an environment where from a broad macro level-- meaning across the broader equity market-- the election hasn't been as much of a focus. 
Now, you've probably heard lots of counter thoughts on that at the more sectoral level, so things like what's happening within technology or small cap stocks or what have you. I agree. There certainly is some factor of presidential odds that's probably weighing in on some of those markets. But across big indices-- so think the S&P 500 or the broad bond market-- those really haven't decided yet what to do. And I think that some of that is a function of what Kevin went through earlier with respect to lack of clarity on the ticket for Democrats but also perhaps for Republicans, more straightforward policy decisioning. 
Those are things that we as investors are very focused on. So I'm sure, Bill, we'll get to a lot of that during the Q&A session. But thanks so much for the opportunity to be on your always great webinars. I'll pass it back to you for now. 
BILL NORTHEY: Well, thank you, Eric. I appreciate that. Good insights, and I think it's helping to tie together some of the implications that Kevin brought about in his section. And how do we apply that into portfolios, broadly speaking? But now we need to think about how we do down to the client level understanding of some of the considerations around planning and taxes. 
So moving from east to west, and we're going to bring in our great partner from Wealth Planning, Kate Phelan, here to talk us through some of the wealth planning and tax considerations that should be on investors' minds, on clients' minds as we close out 2024. So, Kate, thank you for being with us, and I'll turn it over to you. 
KATE PHELAN: Thank you, Bill. I'll echo the sentiment-- always wonderful to be here on this series. I do want to get into today, I know we talk a lot about the importance of financial planning and having a plan and letting that plan guide your decisions when it comes to your investments and things that you're thinking about with regard to your financial well-being. But today I want to put a really specific lens on some law changes that we think are going to impact probably almost everybody on this call. 
Thanks, Bill, for beating me to get that next slide up. As you all probably know, maybe you've heard about it at cocktail parties, or you've been talking with advisors about, the sunset of the current tax code as it sits now. So back in 2017, the Tax Cuts and Jobs Act was enacted. That's a bit of a mouthful. So today I'm just going to refer to it as the Act. 
This Tax Act had pretty sweeping changes for most, if not all, taxpayers, and it's set to sunset. So if you've heard that kind of discussed about the Tax Act is going to sunset at the end of 2025, that's something that is really upon us. That's a little less than a year and a half away. 
And while that may sound like a long time from now, particularly with the thought that we have a really major election between now and then, there's actually a real sense of urgency from a planning perspective to start to look at your own financial picture and see how, if at all, this act change might impact you and what planning you may need to do in the event that it does sunset. Now, as Kevin mentioned, we don't know what's going to happen in Washington, and things have perhaps gotten a little more interesting here of late. 
But what I can say is that you really can't wait for the election and then say, OK, X, Y and Z will happen with the tax code because really, we don't know. If one party takes power or the other, there's no guarantee that the sunset will or won't happen. We've seen in the past where we had a Tax Act like this set to expire, and it didn't. And that was a bit of a surprise, I think, to a lot of people in the industry. 
But we just have no way of knowing. And so our best advice right now, what we're talking with clients about, is let's proceed as if it is going to sunset. That's what the law as it's written right now says is going to happen. And the type of planning that you should be doing to meet that moment is planning that will be good for you, really, no matter what. And so it's important that you act now to really be prepared. 
So, Bill, if we could go to the next slide, this is going to be just really a broad strokes overview. But I want to drive home that point that this really is impacting a lot of different taxpayers in a lot of different ways. So let's break this down a little bit. The first is with regard to your income tax situation. One thing that the TCJA did was reduce the tax bracket rates. 
So, for example, the top bracket right now is at 35%. If and when the Act sunsets, that would be back to 39.6%. So we would see each of the brackets tick up a little bit with regard to what rate they're paying. So there may be some things that you want to consider doing with regard to funding retirement accounts, accelerating income to the extent that you can to get more of that into a year before 2026 when that rate is going to go up. 
Similarly, the standard deduction is going to change. Right now, the standard deduction is very high, and it's going to go pretty much back in half. Right now, for an individual, it's 14,600 and for a married couple, 29,200. After 2026, that will be 8,300 and 16,000, respectively. So you can imagine that that's going to make an impact on how people are planning with regard to itemized deductions such as charitable planning. So there may be some things that you want to consider between now and then either doing or putting off based on what those changes may be. 
Also, for some folks on the phone, the alternative minimum tax, right now, there are about several thousand American taxpayers who are impacted by the AMT under the current act. If and when it sunsets, that number will be closer to about seven million taxpayers. So that's something that if the AMT is something that you had to deal with before 2017, probably want to be talking to a tax professional about what the impact there may be. 
And then, finally, from an income tax perspective, state and local tax. Right now, there's a cap on how much you can deduct at 10,000. And that will go away if the act does, in fact, sunset. So a lot to think about from an income tax perspective, really, regardless of which tax bracket you're in at present. 
The other one that we're talking an awful lot with clients about is the gift and estate tax. So right now, the exemption is, not surprisingly, very high. Meaning that just by virtue of being an American taxpayer, an individual can shelter right now north of $13 million and as a married couple north of $27 million without doing much planning. So that's a very high historically estate tax exemption that we have to work with. That rate is-- or that exemption amount will be cut in half when the sunset happens at the end of next year, meaning that an individual will have about $7 million. 
That number is indexed for inflation, so we expect it'll go up next year and then again be cut back in half, so seven million for an individual, 14 million for a married couple. That exemption, when it goes away, it's use it or lose it. So that's something that we're talking about right now with clients a lot is doing planning in order to take advantage of that exemption as it stands now so that they can make the most of that exemption in order to not lose the opportunity to use it. 
So certainly would recommend if you feel that you have nature and extent of your assets where you're going to be worrying about that estate tax, the time to think about that is now. Really want to think about what are some of the wealth transfer strategies that you can be implementing to use that exemption if it's appropriate for your circumstances? 
And then the final consideration with regard to the Act sunsetting is the business income deduction changes. So under the act right now, there is pass through business income that can be deducted up to 20%, and that will go away under the Act. So you can see here kind of broad strokes a lot of different ways in which these changes to the tax code could impact any situation that you may find yourself in from a financial perspective. Bill, if I could have that last slide. 
And here, just reiterating the point start preparing now. A lot of professionals in this industry, I spend a lot of time talking to estate planning attorneys, CPAs, people who are doing business valuations, things of that nature. The industry is really busy right now thinking about these changes, thinking about the planning that people need to implement. You don't want to get caught in a situation where it's the middle of next year, and you can't find anybody who can help you make the changes that you need to or the analysis that you need to see how to prepare. 
So something we're really encouraging clients to think about from a financial perspective, really, just right away. Thanks a lot, Bill. 
BILL NORTHEY: Well, Kate, thank you. And I think one of the things that this truly underscores, as we've talked about, the need for a financial plan is always present. There's a sense of urgency that we should all be thinking about as we embark upon the next year and a half. So with that, we're going to move into our discussion open forum here. And I'll be moderating a few questions, and we'll bring in all of our presenters as a part of this. 
And Kevin, I'm going to start with you. You mentioned that this is a little bit of uncharted territory with respect to the announcement from President Biden that he's withdrawing from the race. And we now have a presumptive nominee on the Democratic side. 
You alluded to some of the down ballot or the Congressional and Senate races that are going to be playing out and how they might be influenced now that we find Vice President Harris at the top of the ticket as the new nominee for president on the Democratic side. I'm wondering if I might have just talk a little bit more about the potential impact on Congressional races and that total balance. 
KEVIN MACMILLAN: Absolutely, Bill. So let's turn to the House of Representatives, specifically. The current House majority, Republican majority, is incredibly narrow. It's about a four-seat majority that they have. And if you look at the races closely across the country, there's about 12 to 15 toss up races that are being contended for. 
A lot of those races are occurring in California and New York, specifically. So what I like to say is those states in particular are likely to go for a Harris ticket for president. But the control of the House of Representatives ultimately lies in either New York or California. So depending on how those races go, the control of the House of Representatives go. 
With Vice President Harris elevating to the top of the ticket, I think it drives a lot more enthusiasm for Democrats to get out and vote. If you had seen the numbers from a week ago or so, there was not a lot of enthusiasm there. So you would see-- you would have seen more voters stay at home, perhaps, and not go to the polls. Now, I think the Harris voters will get out there more often. 
So it makes those races a lot more contended for and a lot more in the toss up mode than what Republicans were expecting just a few days ago. That's important for a lot of reasons because, first of all, first and foremost, all tax legislation originates in the House of Representatives. So if we're talking about the Tax Cuts and Jobs Act, the changes to that, if-- when it does expire or as it begins to expire will originate in the House of Representatives. 
So if it's a Republican-controlled House, the bill will look very different than it will if it's a Democratic-controlled House. Switching over to the Senate, I think the Senate is very likely to be Republican controlled. Republicans really only have to defend a couple of seats. They're very safe, whereas Democrats are defending a lot of seats in a lot of swing states. 
And there currently is just a one-vote majority. And with West Virginia in particular, we're seeing that state with the retirement of Joe Manchin. That's going to be a Republican seat. So we're starting at a 50/50 moment. And then in states like Ohio, Pennsylvania, Montana, Wisconsin, Nevada, Arizona, there are real races going on there. And you would expect that the Republicans could probably pick up one or maybe two or maybe more. 
And so you're going to have a high likelihood of Republicans controlling that chamber. I think the top of the ticket with Harris and Trump don't really dictate a whole lot there. It's really these House races where enthusiasm and driving the votes into these districts is going to make a difference for that chamber. 
BILL NORTHEY: Yeah, great insights, Kevin, and we'll keep a close eye on it. You always help us by producing some great charts that help us understand that down ballot activity. And I would note, as you're coming back to join this webinar series in October, we'll probably have some more near events that we can begin to talk about. 
So, Eric, I'm going to turn to you. One thing that we often hear from clients is the election is upcoming. There's going to be more volatility-- winners, losers. How are we viewing the near-term capital market impacts between now and November? 
ERIC FREEDMAN: Yeah, Bill, it's a great question. There's a lot of events that we have to pay attention to in addition to the great insights Kevin just provided. I think first and foremost, it's what's happening within the Federal Reserve. Again, back to that image of the Federal Reserve acting like the personal trainer, setting interest rate policy. That's the cantilever, if you will, on the treadmill. 
And as that ramp goes up and then hopefully goes down, the expectation for the markets is that we will have an interest rate cut in the month of September. So the Fed does meet next week. Probably the most likely outcome is a signal of a September cut. Markets actually want to see one more. It'll probably happen after the election, probably in the December meeting. 
So I think first and foremost, in terms of capital markets, the expectations that we will see one interest rate cut and likely in September. So that's really important as we start to form views as we get deeper into the year. Now, we don't think that the Fed is going to go necessarily incredibly deep with interest rate cuts. It really will be a function of what we see from the economic growth projections and trajectory. 
But getting one in before the election, we think, will be important, or at least signaling their intentions will be essential. I think the second point is that we have a lot of earnings coming through, Bill. And as always, if you look at equity markets, if you look at some cues that the bond market takes, they want to hear what companies are thinking. And again, companies are providing us with a lot of great detail on where consumers are spending. So think of it this way. 
If you look at what we saw really in droves coming out of the pandemic was a lot of trading up, whether it was middle income consumers buying luxury goods or whether it was maybe lower income consumers shopping at more aspirational stores and grocery stores and what have you. That's really starting to subside. You're starting to see that really come through. So the next leg of the earnings story will be, OK, how much stability do we see across those income cohorts? 
The other thing that's really important to gauge is what's happening with the housing market. We actually had some data this morning that showed some very modest weakening of the housing market. So that's important because housing, as mentioned earlier, is a key portend of what happens with spending. So I think the other last thing I'd point out is that what happens within geopolitics are very, very important. 
So not just-- while we're very focused on the US election, there's been a lot of election noise across the world. India, England, France-- obviously with the Paris Olympics coming right in front of us-- there's a lot of things happening outside of our borders that have implications for trade, have implications for alignment and defense spending and things of that nature. So a lot of things, if you will, Bill, on the docket for us. 
So again, I'd really stack rank them as interest rate policy number one, earnings messaging number two, and then number three, what happens with geopolitics will certainly shape some of the discussions in Washington and beyond and certainly the way that we're thinking about client investment portfolios. 
BILL NORTHEY: Eric, I'm going to take the opportunity to extend this question. You get the opportunity to be on television and representing our views. You do a lot of speaking events to our clients, and I know that provides you two-way feedback. And I'd be interested to understand some of the questions or the kinds of questions that you're hearing. 
I'll tee you up with one. I know there's a lot of clients that are out there sitting on cash and what to do with large cash balances, recognizing that short term interest rates are high right now relative to history. And it's been awfully comfortable to collect 5.25% in a money market for a period of time. What are some of the practical considerations that investors might be thinking about in today's environment looking forward? 
ERIC FREEDMAN: Yeah, Bill, I think it's a really central question we get quite a bit. And I think that cash is a good thing to rent but not necessarily to own over a long period of time. What I mean by that is that there are times, perhaps like the last couple of quarters, where sitting in cash has felt like a good decision. Now, what we also know is that the opportunity cost of cash over a long, long period of time is extremely high. 
In other words, when you sit in cash, that means you don't invest in other things. And typically, again, if you have a well-constructed portfolio, if it's tied to a financial plan, then if you sit in cash, it may feel like you're not taking on a lot of risk. Concurrently, your pricing power and really your purchasing power does go down relative to inflation, and also you're just not involved in other things. 
So our viewpoint has been to really look to move beyond just sitting in cash. Again, we have a lot of clients that think about things like laddering CDs or sitting in money markets. Our viewpoint is that now's the time. It actually was time earlier in the year, but also it still is time to glide path out of that mentality. 
And so, in a way, Bill, sometimes high cash levels are a bit nostalgic. People look back and say, hey, I remember when cash rates were X, or I got Y, Z in a CD. But I think the reality is that the opportunity set that you're foregoing is just too great. So that can mean taking some very small steps into other parts of the bond market that have a little more sector representation, have a little more what's called duration, and have a little more maturity attached to them than just cash. 
We think those are worthwhile strategies to look into, but also would consider, again, for those that have been very concerned about getting involved in a broader, more diversified portfolio, to do that in more chunks, to do that in maybe more baby steps, if you will. That, we think, is a good step forward. So again, the idea that cash has certainly provided a decent yield versus recent history is true. 
That being said, it has also represented a massive opportunity cost versus other things that have done a lot better, especially the global equity markets. So those are some thoughts that we have. It's always a good thing to piece into it if it gives people mental capital and some peace of mind. But again, sitting in cash we think is a very high opportunity cost strategy that clients would be better served looking elsewhere. 
BILL NORTHEY: Yeah, appreciate that, Eric. And it's that sense of urgency. And Kate, I was struck by the sense of urgency that came from your discussion with respect to the Tax Cut and Jobs Act expiration or sunset at the end of 2025. And I'm sure clients are thinking about this. What do I do to get started? 
Do I go to an accountant, an attorney, other trusted advisors? How do I get started on thinking about this and applying it to my personal situation? 
KATE PHELAN: Yeah, it's a great question, Bill. You probably won't be surprised to hear me say start with your financial plan. This is a great time to pull it out, take a look at what have we set as our goals? What's the course of action that we're implementing right now? 
Sit down with your wealth management team, your portfolio manager, and really look at how are the ways-- what are the ways in which we think we may be impacted? Start to identify are there income tax considerations? Are there estate tax? Might you change your gifting strategy that you have in place? 
And I think once you have identified what your problems are, then you can build a team to help you solve it. I think for a lot of people, it will include a trip to their estate planning attorney. Almost certainly will include a trip to the CPA that is separate from the tax preparation conversation because now we're really talking about what are some strategies that we need to think about? 
So I think that starting with that financial plan, identifying what your potential issues or problems are, and then going from there to say, who do we put around this now to solve it is really the best way to go. Take it one day at a time. 
BILL NORTHEY: Now, that's really good insights, Kate. And I'm going to ask then, obviously, we're in the business of helping clients, as you alluded to. Why, Kate, would you say why U.S. Bank Wealth Management? What is it that as a leader of the organization you would describe to help support investors to get to their goals? 
And Eric, I'm going to ask you the same question. So you can start to think about your answer from your perspective as well. 
KATE PHELAN: Yeah, in my mind, Bill, it's our team-based approach. I think if you look at U.S. Bank as a firm, we have multiple world class asset platforms on which clients are investing money. We are this phenomenal bank. We're the fifth largest in the country. So we've got a really nice position in terms of where we sit from a strength and stability but also having really a meaningful seat at the table. 
Kevin is having really influential discussions. So we're a really meaningful player. So you think about who we are as a firm, that's kind of a no brainer. But for me, it really gets into how do we meet with clients and take all of those different parts of the firm and bring them together? So if you have a wealth management team, you have somebody who's thinking about your investment well-being. 
You have somebody who's thinking about your banking well-being, what's happening from a credit perspective, what's happening from a deposit perspective. And then you've got your financial planning team really kind of tying that all together. We also have a trust team. 
So when you think about all of the different aspects of your financial well-being, there's a member of the team who sits around the client who's thinking about what is my expertise? But then how does my expertise pertain to this client? How does it pertain to the other things that a client is worrying about? I always joke it's ironic that I work for a big bank because I don't know very much about how we extend credit, right, and why we do things a certain way. 
But I work with a heck of a lot of people who do. And when we have conversations about a client's situation where I'm really thinking about here's the tax implication, somebody who's thinking about the credit side can say, well, we need to think about it from this perspective. And the person who wins in that scenario is the client. And so that's not necessarily a unique perspective to look at wealth management that way. 
But I think that U.S. Bank really goes farther than anyone else in the industry to say we are team based, and you're getting that team-based approach. And for me, it works for the clients every time. 
BILL NORTHEY: Eric, I'll send that over to you for follow up. 
ERIC FREEDMAN: I think the hard part of following up Kate Phelan is that she is so insightful that you're kind of left with the scraps. And I think that's the case right now. But I'd say this. Very succinctly, I think that U.S. Bank is big enough that we can handle your most complex question. We're small enough to really care about the outcome and care about you as an individual and about your outcomes as a household. 
And so, to Kate's point, we're a very integrated bunch. When the news came out on President Biden on Sunday, Kevin and I had a conversation. Kevin I saw each other in person last week. And it's one of those ideas of having that applied expertise in a given situation and being, again, to bring forth our team in a way that matters to you. We don't sell cookie cutters here. 
We're not here to spread peanut butter across our client situations. We're here to, again, get to know you, understand how what we do can help you, and go from there. So I think, again, it's a very collegial place. I've worked at other banks, worked at other firms. And I just think the esprit de corps here is very high, and that puts the client in the middle. 
And that, I think, is what Kate emphasized. And again, an opportunity to hear from Kevin in real time about what's happening in Washington and hearing, again, very concrete, tangible takeaways from Kate, those are things that just motivate me to come in the next day and keep working hard for clients. 
BILL NORTHEY: Well, I appreciate all of you joining today. I know we need to dismiss Kevin to his other Beltway activities. And we're going to start to bring our conversation to a close here today. But as you can see on the slide in front of you, and we've talked about through the course of our conversation, understanding goals and creating a plan is an ongoing process. But it is absolutely critical to help you create, grow, protect, and ultimately pass on your wealth in a way that, whether charitably or to family members, that you deem as appropriate. 
And that is why this integrated wealth planning approach is so important and helps keep you on track and focused on those goals. So as we move to the next slide, you can see there are many tools that are available to help support your planning experience and the process, things that give you interactive capabilities to help collaborate together with the people who are guiding your journey. And it gives you more transparency and confidence in your plan. 
You can update goals. You can do what if scenarios to stress test your portfolio and your plan and determine your probability of success and reaching the goals that you've clearly articulated with the help of a trusted advisor. So as we end our time today, I'd like to offer some other resources and next steps if you're interested in learning more. First, you can get a recap of today's conversation, and within the next day you should be able to access a replay of this webinar if you'd like to hear more from Kevin and Eric and Kate at usbank.com 
But you can also go to the Resources tab at the bottom of your screen right now, and you can find links to our latest insights that are available on usbank.com/marketnews. So if you're not a wealth management client but are interested in knowing how to apply what you've heard today, the insights, and experience some of the benefits that both Eric and Kate talked about or just want a second opinion, you can contact us in a number of different ways. 
You can call the number on your screen-- 844-233-5836. You can go to usbank.com/advisor to find a wealth management professional in your area. Or you can utilize the Contact Me tab at the bottom of your screen and fill that out, and we'll be happy to have a team member reach out to you. So we've reached the end of our time together. 
We look forward to seeing you again. Please put a note on your calendar for early October. We're going to come back with more of an election update, and we hope to see all of you. 
But I want to thank our guests, Kevin, Eric and Kate, for all the great insights and Thank all of you who joined us here today for the webinar. Have a great balance of the day.