By: Dr K C Gupta, YBB Personal Finance

SENTIMENTS

AAII Bull-Bear Spread -14.0% (very low)
$NYA50R, NYSE %Above 50-dMA 77.74% (overbought)
$SPXA50R, SP500 %Above 50-dMA 72.20% (overbought)

ICI Fund Allocations (Cumulative), 6/30/25
OEFs & ETFs: Stocks 61.34%, Hybrids 4.14%, Bonds 17.47%, M-Mkt 17.05%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 4.25-4.50%
FOMC 9/17/25+ cut
FOMC 10/29/25+ hold

Treasury

T-Bills 3-mo yield 4.27%, 1-yr 3.87%; T-Notes 2-yr 3.68%, 5-yr 3.76%, 10-yr 4.26%; T-Bonds 30-yr 4.88%;
TIPS/Real yields 5-yr 1.28%, 10-yr 1.85%, 30-yr 2.59%
FRNs Index 4.174%
US Savings I-Bonds rate from 5/1/25 – 10/31/25 is 3.98% (previous 3.11%); the fixed rate is 1.10%, the semiannual inflation is 1.43%
For current banking rates, see www.depositaccounts.com/

Stable-Value (SV) Rates, 8/1/25
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.25%
TSP G Fund 4.375% (previous 4.25%).

Weekly ETFs INDA +1.65%, EPI +1.70%, INDH +1.54%, SPY +0.29%

The data above are as of Sunday preceding the publication date.

IT/TECH

India semi chips manufacturing will initially be for 28-65 nm mature node chips. Globally, these low-end chips are 88% by volume & 40% by value (2023) & are used in many electronics products. After early production gluts, post-pandemic shortages developed for these chips as many new semi fabs focused on much more profitable advanced chips & the old production facilities for mature node chips became less efficient or outdated & were shut. The first Indian chips may be in 2025-26.
India has to start somewhere but there is a long road ahead (20 year lag?) to catchup to 1-7 nm chips (most advanced 2 nm in 2025) produced now in Taiwan, US, etc.

Tata Electronics & German Bosch will collaborate in electronics & semiconductor projects for automotive & other industries.

US IT firm Coupang/CPNG (“Amazon of S Korea”; offers services under Coupang & Rocket Brands) is expanding operations in India.

Kyndryl/KD (IBM’s former infrastructure business) will open AI R&D center in India & make other investments.

SPECIAL TOPICS

US chemicals company Chemours/CC (2015 spinoff from DuPont/DD) & SRF have a partnership agreement.

UK-based food & catering company Compass Group (major markets Europe, US, India, etc) is significantly expanding its existing India operations.

STARTER IRAs (TRUMP ACCOUNTs)

2025 Budget (OBBBA) included Starter IRAs (Trump Accounts) for US newborn citizens between 2025-28; specific references to “newborn citizens” imply that some newborns may not be covered. Social Security number is required & that should be available within 3 months after the birth. There are no income restrictions.

These accounts (i) will be seeded (one-time) with $1,000 from the US Government, (ii) up to $5,000/yr (after 7/4/26; inflation-indexed after 2027) after-tax can be added by family & friends, but it may include parents’ employer benefit up to $2,500/yr (pre-tax), & (iii) up to $2,500/yr (inflation-indexed after 2007) additional from state & local governments, nonprofit 501c3 & charities. Item (iii) should apply to specific/ defined groups of children, not just to a particular child.

Funds must be invested in qualified low-cost (ER < 10 bps) broad US stock index funds (market-cap based) until the age 18, but then can be invested more broadly. Earnings will grow tax-deferred. Withdrawals are possible only after age 18 (only exceptions being transfers to 529-ABLE or premature death) & then the normal IRA withdrawal rules apply. So, some qualified withdrawals are possible before 59.5, but penalty-free taxable general withdrawals are allowed after age 59.5.

As these accounts will have both after-tax, pre-tax & tax-deferred money, taxation of withdrawals would be a bit complicated. Ordinary taxes will apply after excluding the after-tax proportion of withdrawals.

For education, 529, & for disability, 529-ABLE, are still preferred (both had further enhancements by the 2025 Budget). Roth IRAs, if applicable, are better. Traditional IRA may be comparable. Certainly tap free government money ($1,000) & tax-free parent’s employer contributions ($2,500/yr), if available, but then put more money into 529, Roth IRA, Traditional IRA or Trump Account based on their features & your personal goals. The new Trump Account adds complexity to saving for children.

Media has started using the term “Starter IRA” because these are possible from age 0-18 when there is no earned income that’s needed for IRAs.

Be careful with web searches by paying attention to article dates because the House & Senate versions differed from that in the final approved Budget (7/4/25).

For more information, see https://ybbpersonalfinance.proboards.com/