A Strong Tax Season Boosting Consumers
As tax season passes its midpoint, a clear shift typically occurs, from early filers receiving refunds to later filers making payments. This year, refund data has been particularly strong, with total refunds nearing $200 billion and running approximately 19% higher than the same period last year. This surge in refunds is more than just a seasonal occurrence; it represents a meaningful injection of liquidity into the economy. In fact, by mid-March, the increase in consumer aid had already reached roughly $20 billion, marking one of the largest non-pandemic-related boosts on record. These funds are playing a key role in supporting consumer spending, especially amid external pressures such as rising energy costs and geopolitical tensions. In the short term, this influx of cash is helping offset inflationary strain. However, the true test will come after the April tax deadline, when this temporary support fades and underlying economic conditions become more apparent.

Why the Bull Market Remains Intact
Recent market volatility has prompted understandable concerns about whether the current bull market may be nearing its end. However, a deeper analysis suggests that the broader upward trend remains intact. Several key indicators that historically signal a market peak are notably absent. Unlike prior market tops in 2000 and 2007, there is no evidence of excessive investor euphoria. Equity inflows have not reached extreme levels, mergers and acquisitions activity remains moderate, and IPO markets are far from overheated. Additionally, real interest rates are still below levels typically seen before recessions, and corporate earnings revisions continue to trend positively. While fewer stocks are hitting new highs, this slowdown has not yet reached a level that raises significant concern. Taken together, these factors suggest that the current pullback is more likely a short-term fluctuation rather than the beginning of a sustained downturn. Ongoing analysis will be critical in determining whether conditions change in the weeks ahead.

The 10-Year Treasury as a Market Signal
One of the most important indicators of market health is the yield on the 10-year U.S. Treasury. This single data point offers insight into borrowing levels, investor demand, and broader economic expectations. A key threshold to watch is the 4.5% level. Historically, when the 10-year yield approaches or exceeds this level, equity markets—particularly the S&P 500—tend to experience downward pressure. This relationship reflects the inverse movement between bond prices and interest rates. Earlier this year, optimism around reduced government borrowing and stronger tax revenues pushed yields below 4% for the first time in over a year. However, recent geopolitical developments, including heightened tensions in the Middle East, have shifted expectations. Projected increases in defense spending, estimated at an additional $200 billion, are expected to expand the federal deficit and lead to higher Treasury issuance. This, in turn, puts upward pressure on yields and downward pressure on bond prices. While the 10-year yield has not yet crossed the critical 4.5% threshold, it has moved higher at a rapid pace. Encouragingly, recent data suggests yields may be stabilizing. Still, this remains a crucial metric to monitor, as it provides a real-time pulse on market sustainability.

Greg Powell, CIMA®
President and CEO
Wealth Consultant
Email Greg Powell here

Bobby Norman, CFP®, AIF®, CEPA®
Managing Director
Wealth Consultant
Email Bobby Norman here

Trey Booth, CFA®, AIF®
Chief Investment Officer
Wealth Consultant
Email Trey Booth here

Ty Miller , AIF®
Vice President
Wealth Consultant
Email Ty Miller here

Fi Plan Partners is an independent investment firm in Birmingham, AL, with a team of professionals serving clients across the nation through financial planning, wealth management and business consulting. The team at Fi Plan Partners creates strategies in the best interest of their clients using fee based investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.
Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

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