An important retirement planning skill is having the ability to “sniff out” the future direction of various factors, such as inflation and interest rates for their potential impact on future household spending and savings efforts. “Reading the tea leaves” is a folk lore expression related to the practice of attempting to divine the future from the display of loose tea leaves at the bottom of a cup.

In today’s world, professional investment managers pay close attention to the pronouncements of various authorities, such as the Bank of Canada, the US Federal Reserve (FED) and various politicians for clues into the expected direction of things like interest rates, inflation, or the direction of the economy over the coming months. For example, a recent favorite discussion point from various online sources is whether the US is “in a recession” or not.