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Fed unlikely to raise interest rates in 2021: Here's how the headlines can affect your money

Plus, the best big cities for you to grow wealth.

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Federal Reserve Board Chairman Jerome Powell speaks during a press conference following the January 28-29 Federal Open Market Committee meeting, in Washington, DC on January 29, 2020.
Mandel Ngan | AFP | Getty Images

The Dow and S&P have another record day. The Fed is unlikely to raise interest rates this year. Plus, the big cities where you're best set up to grow wealth. Here's how the headlines could affect your money.

Dow and S&P hit yet another record

Both the Dow and S&P closed at record highs Friday, rising 2% and 2.7% for the week, respectively. The Nasdaq was also up, posting a 3.1% gain for the week. 

Markets were down Monday morning.

Fed unlikely to raise interest rates this year

The Federal Reserve is unlikely to raise interest rates in 2021 despite the economy's rapid recovery from the pandemic, Federal Reserve Chair Jerome Powell said in an interview with "60 Minutes" that aired Sunday night.

"We and a lot of private sector forecasters see strong growth and strong job creation starting right now," Powell said. "Really, the outlook has brightened substantially."

The central bank lowered interest rates to almost zero last spring as part of its strategy to mitigate the economic fallout of the pandemic.

That strategy has come into question recently as more and more indicators show the U.S. economy is on track for a robust comeback. Fed officials recently predicted that GDP will rise 6.5% in 2021 — the fastest growth rate since 1984.

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Big cities offer big opportunities to grow wealth 

Urban dwellers have long understood there's a financial trade-off to living where they do: If you want all the amenities cities offer, you have to put up with a higher cost of living. That pinch on your pocketbook can feel especially acute if you live in some of the country's hottest rental markets like Austin, San Jose, or Washington, D.C.

In many cases, however, the higher monthly incomes you can earn in those cities more than offset their higher costs of living and leave enough money for you to build wealth, a new analysis finds. Austin, San Jose, Seattle, and Washington, D.C., are the top cities where single people and families can save the most, after typical expenses are subtracted from incomes.

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Words you've heard: global supply chain

Execs from nearly 20 major companies are meeting at the White House to discuss the global shortage of semiconductor chips, as the pandemic continues to affect global supply chains.

Sourcing raw materials and manufacturing semiconductors across multiple continents has proven particularly difficult for the auto industry. That's forced delays in production and a shortage of vehicles in the U.S., driving up prices on used cars and summer rentals.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

Grow is published by Acorns + CNBC. Acorns helps you invest spare change automatically into diversified portfolios. Download the app today or learn more at Acorns.com.

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