Hello, YieldAlley readers! In this issue:
Is Tax Loss Harvesting Worth the Hassle? Here's How to Think About It
Fed Holds Steady as Middle East Tensions and Hot Producer Prices Rattle Markets
Bank of America Visa Cardholders Can Win FIFA World Cup 2026 Hospitality Packages
The Income Needed to Be Middle Class in Each State
And more!
NEWS
Standout Stories
🚙 The Tesla Influencers Leaving the ‘Cult’ (Wired)
🤖 AI Isn’t an Economic Moat Killer, But It Will Disrupt Industries (Morningstar)
🤔 Will AI Replace Financial Advisors? (A Wealth of Common Sense)
🏦 Bonds Can Help When Your Portfolio Is Too Volatile (Dimensional)
💼 When the Best Retirement Is No Retirement at All (Bloomberg)
MARKET THOUGHTS
Fed Holds Steady as Middle East Tensions and Hot Producer Prices Rattle Markets
ECONOMY
The Federal Reserve held its target rate unchanged at 3.50% to 3.75% at its March meeting, the second consecutive pause, with policymakers voting 11-1 (one member preferred a cut). Updated projections still show a median estimate of one more rate cut this year, but forecasts for both inflation and economic growth were revised higher. Chair Powell flagged heightened uncertainty from geopolitical developments in the Middle East, warning that a potential energy shock "can cause trouble for inflation expectations." Producer prices reinforced those concerns, with the PPI rising 0.7% in February (up from 0.5% in January and the highest monthly reading since July 2025), while the annual rate accelerated to 3.4% from 2.9%, both ahead of consensus. On the housing front, the NAHB builder sentiment index ticked up one point to 38 in March and pending home sales rose 1.8%, but new home sales slumped to a seasonally adjusted annual rate of 587,000, the lowest level since 2022 and a sharp drop from December's revised 712,000. Affordability remains a top concern, with 37% of builders reporting price cuts during the month.
STOCKS
U.S. equities fell across the board in a volatile week driven by geopolitical tensions, oil price swings, and a hawkish read on the Fed's outlook. The Dow Jones Industrial Average dropped 2.11% to close at 45,577.47, while the Nasdaq Composite lost 2.07% to finish at 21,647.61. The S&P 500 declined 1.90% to 6,506.48, and the Russell 2000 slipped 1.69% to 2,438.20. The S&P MidCap 400 held up best, falling 1.34% to 3,296.31. Year-to-date, the Nasdaq is down 6.86%, the S&P 500 has shed 4.95%, and the Dow is off 5.17%, while midcaps and small caps have fared better at -0.27% and -1.76%, respectively. Energy was the standout sector, outperforming by a wide margin as oil prices climbed on ongoing Middle East supply risk concerns.
FIXED INCOME
Treasury yields moved higher amid the week's heightened uncertainty, with the benchmark 10-year U.S. Treasury note rising to around 4.38% by Friday afternoon. The Fed's decision to hold rates steady, combined with upwardly revised inflation forecasts, kept upward pressure on yields across the curve. Hotter-than-expected producer price data added to the bearish tone, as markets repriced the path of future rate cuts. The geopolitical backdrop, particularly concerns about potential energy supply disruptions in the Middle East, further supported the move in yields as investors weighed the risk of a renewed inflation impulse.
INCOME BUILDING TIP
Is Tax Loss Harvesting Worth the Hassle? Here's How to Think About It
With markets pulling back in recent weeks, you might be looking at unrealized losses in your brokerage account and wondering if it's time to tax loss harvest. The short answer: probably yes, even if the numbers seem small. But the real value depends on your tax bracket, your time horizon, and how you execute the swap.
Tax loss harvesting (TLH) works by selling an investment at a loss, immediately buying a similar (but not "substantially identical") fund to stay invested, and then using those realized losses to offset taxable income. The IRS lets you deduct up to $3,000 in net capital losses against ordinary income each year, with any excess carrying forward indefinitely. But the $3,000 cap only applies to losses that exceed your capital gains. If you have $10,000 in harvested losses and $8,000 in gains, you offset the gains first, then deduct $2,000 from ordinary income, and carry the remaining $0 forward. So there's real value in harvesting well beyond $3,000 if you expect future gains from rebalancing or selling.
The key insight most people miss is the tax rate arbitrage. When you harvest a loss, you're deducting at your current marginal income tax rate, which could be 22%, 24%, or higher. But when you eventually sell the replacement fund (now with a lower cost basis), those recaptured gains will likely be taxed at the long-term capital gains rate of 15% or 20%. If you're in the 24% bracket and your LTCG rate is 15%, that's a 9% spread on every dollar harvested. On $3,000 of losses, that's $270 in permanent tax savings, plus you get to invest the deferred tax dollars for years or decades. At a 7% annual return, $900 in tax savings compounding for 20 years grows to roughly $3,500.
The practical execution is straightforward. Common TLH pairs include VTI/ITOT, VXUS/IXUS, VTSAX/VLCAX, or FSKAX/FZROX. Swap into the partner fund, wait at least 31 days before swapping back (if you want to), and make sure to turn off automatic reinvestment of dividends into the original fund during that window to avoid triggering a wash sale. One important detail: the wash sale rule applies across all your accounts, including IRAs and 401(k)s. If you buy the same fund in your Roth within 30 days of selling at a loss in your taxable account, the loss is disallowed. ETFs tend to be easier to TLH with than mutual funds since you can trade intraday and the bid-ask spreads on major index ETFs are negligible.
Don't overthink the threshold for when to pull the trigger. Some investors harvest whenever they see a 2-3% loss on a lot, while others wait for larger drawdowns. The mechanical effort is minimal (one sell, one buy), and the losses carry forward forever if you don't use them right away. As long as you stay invested in a broadly diversified fund throughout, the portfolio complexity of holding an extra fund or two is a small price to pay for real, compounding tax savings.
INCOME BUILDING
Cash Rates
Government Money Market Funds (7-Day Yields)
SNVXX (Schwab Government Money Fund - Investor Shares): 3.37%
SPAXX (Fidelity Government Money Market Fund): 3.29%
TTTXX (BlackRock Liquidity Funds: Treasury Trust - Institutional Class): 3.54%
VMFXX (Federal Money Market Fund): 3.58%
Brokered CD Rates (6-Month Rate)
Charles Schwab: 3.89%
E*Trade: —
Fidelity: 3.88%
Merrill Edge and Merrill Lynch: —
Vanguard: 3.80%
ETFs (30-Day Yields)
SGOV (iShares 0-3 Month Treasury Bond ETF): 3.54%
BIL (SPDR Bloomberg 1-3 Month T-Bill ETF): 3.47%
USFR (WisdomTree Floating Rate Treasury Fund): 3.57%
TFLO (iShares Treasury Floating Rate Bond ETF): 3.58%
DEALS AND BONUSES
Bank of America Visa Cardholders Can Win FIFA World Cup 2026 Hospitality Packages
Bank of America and Visa are running a sweepstakes giving BofA Visa credit cardholders a shot at winning one of three all-expenses-paid trips to FIFA World Cup 2026 knockout round matches. Every qualifying purchase with an eligible card counts as an automatic entry, with no minimum spend required.
Offer Details
Main promotion: Chance to win one of three FIFA World Cup 2026 hospitality packages (final, semi-final, or quarterfinal match)
Promo code: None (automatic entry with qualifying purchases)
Valid dates: March 20, 2026 through April 20, 2026
Prize tiers:
Grand Prize: Final match on July 19 in East Rutherford, NJ
First Prize: Semi-final on July 15 in Atlanta
Second Prize: Quarterfinal on July 10 in Los Angeles
Each package includes: Round-trip airfare for two, four nights hotel, two match tickets, ground transportation, cultural experience, FIFA-themed gifts, $600 Visa Prepaid Card, and a cash award
Eligibility: Bank of America consumer and small business Visa credit cardholders
Entry method: Every qualifying retail purchase = one entry, unlimited entries allowed. No registration or opt-in needed. No-purchase-necessary mail-in option also available.
Winners: Selected by random drawing in May 2026
Our Thoughts
This is a no-effort sweepstakes for anyone already using a BofA Visa credit card. Since every purchase counts as an entry with no minimum amount, your normal spending automatically racks up entries over the 31-day window. The prize packages are genuinely generous, covering airfare, hotel, tickets, and even a $600 prepaid card on top. If you have a BofA Visa card sitting in a drawer, this might be a reason to pull it out for everyday purchases during the promo window.
Picture of the Week
