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Relief checks summary news: 19 March 2023

Finance updates: latest news

Headlines: Sunday, March 19, 2023

- UBS announces that it will buy Credit Suisse

- Wall Street raisesrecession threat levelafter SVB collapse 

- Average Social Securitycheck at sixty-six 

- Connecticut, Idaho, and Maineprovide direct relief to thousands of their residents

- Why the Social Security COLAmay be much lower next year

- Double Social Security payments on their way for some beneficiaries in March

- $10,000 for car damage in California

2023 Tax Season 

- The list of refundable and non-refundable tax creditsavailable to taxpayers

-How to claim up to $2,000 for the Mortgage Interest Tax Credit

Read more from AS USA:
Will the Federal Reserve raise rates again in March 2023?

This month, the Federal Reserve’s Federal Open Market Committee, tasked with setting rates, has a lot of data to consider. Chair Jerome Powell is expected to announce another round of rate hikes on Wednesday, 22 March, after meeting with the other members of the FOMC on Monday and Tuesday.

Earlier this month, when testifying before Congress, Chair Powell said that the US central bank was “prepared to increase the pace of rate hikes” and that “the ultimate level of interest rates is likely to be higher than previously anticipated.” However, since these comments were made, the US has witnessed two major bank failures, requiring direct intervention by the federal government to protect depositors at a historic scale.

Read our full coverage for more on what experts see as the Fed's next move.
Will there be a recession in the US in 2024? This is what the experts predict

When the covid-19 pandemic led to millions of workers losing their jobs, the US federal government responded by increasing unemployment insurance benefits and sending stimulus checks to millions of households. These measures kept aggregate demand up and allowed the US economy to avoid a devastating recession.

Now, three years later, significant uncertainty exists in the US economy after two major bank failures led to the most intensive government intervention in financial markets since 2009. On Sunday, Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell released a joint statement in light of the news that financial giant UBS would purchase Credit Suisse and applauded “the announcements by the Swiss authorities today to support financial stability.”

The statement struck an optimistic tone, noting that “the capital and liquidity positions of the US banking system are strong, and the US financial system is resilient.” These remarks come just days before the Federal Bank is expected to announce further interest rate increases.

Read our full coverage for details on which financial giants see a recession as more likely after the SVB collapse, and how interest rate increases have impacted unemployment and inflation.

UBS to buy Credit Suisse

Last week many in the financial sector watched the value of Credit Suisse continue to fall. As interest rate hikes and various bank failures rock the financial sector, it looks like Credit Suisse will be unable to make it on its own. 

Earlier today, UBS announced that it would purchase the bank and take it over. 

More details on the detail will become public in the coming days. 

The financial giant UBS has announced that they will

Problems at SVB were spotted well in advance of bank's collapse

Silicon Valley Bank lobbied hard to avoid government regulations on banks that would have allowed more oversight and controls to ensure its financial stability in the event of a stormy financial environment. Even so, the bank was on the San Francisco Fed’s radar after a 2021 review “found serious weaknesses in how it was handling key risks.”

Government supervisors overseeing the failed financial institution issued six citations, some requiring “immediate attention,” indicated that the bank was doing a bad job of ensuring that it would have enough easy-to-tap cash should trouble strike. However, the bank ignored the warnings and was placed under full supervisory review in July 2022 and deemed deficient for governance and controls.

The Fed has begun an investigation into how the oversight went wrong with results expected by 1 May. In the meantime, Congress is holding hearings 29 March on the recent bank collapses.

I’m calling for an independent investigation into the recent bank and regulatory failures. The Inspectors General for the Treasury, Fed, and FDIC should deliver a preliminary report to Congress in 30 days. Regulators and Congress must act quickly to prevent further economic harm.

Elizabeth Warren, US Senator from Massachusetts (D)

Inflation being driven by services, housing rent is the biggest driver.

Core goods was a predominant driver of inflation in 2021 and into 2022. However, while it has been cooling, inflation in services has been gaining offsetting the reduction in goods. The bulk of inflation, 3% in the fourth quarter of 2022, came from rent, housing services. Prior to this period of accelerated price increases, when inflation was around 2%, rent inflation was around 1.5%.

One of the driving factors behind rent inflation is labor market conditions. A tight labor market, with jobs gains and wage increases, helps fuel rent inflation through greater demand. This will be a challenge for the Federal Reserve in order to get inflation down to its 2% target. Although other factors have pushed up rent inflatio as well, the strong tie between the labor market means that rent inflation will most likely remain high.
What is the 10-year rule for student loan forgiveness?

Eligible student loan borrowers may be able to have their debt forgiven after ten years through the Public Service Loan Forgiveness (PSLF) program.

Read to find out if you qualify.
The list of refundable and non refundable tax credits: the maximum the IRS can return to you

US families are looking at the possible credits they can use to deduct them from the taxes they have to pay this season. For some of these cases, the US Treasury may even return money to households.

There are different types of credits, which are structured in what are known as refundable and non-refundable rates. In this case, it should be mentioned that there may be a series of hybrid models that can be paid partly by the taxpayer and partly by the state to the families.

Read more
Tax Season 2023: Do senior citizens on Social Security have to file taxes?

With tax season well underway many are asking whether seniors who receive Social Security payments need to file a tax return.

In short, senior citizens are largely subject to the same tax requirements as other adults. There is no age at which you no longer have to submit a tax return and most senior citizens do need to file taxes every year.
How is the failure of SVB affecting mortgage rates?

The failure of Silicon Valley Bank at the end of last week was the largest bank collapse since the 2008 financial crisis and the second largest in US history. The demise of the financial institution which caters to tech start-ups and venture capitalists sent shockwaves through the economy and prompted emergency measures from the White House to prevent contagion.

One of the knock-on effects of the turmoil in the banking sector was a drop in mortgage rates which have been rising steadily in recent weeks.

Lower mortgage rates lure some homebuyers back

The daily average mortgage rate topped 7% a week ago last Wednesday reaching a four-month high. However, the banking crisis that has been unfolding in the United States has helped drive down the interest on home loans. The daily average of 30-year fixed-rate mortgage ended this week at 6.55%, half a point below its peak on 8 March.

“Buyers pounced when rates fell because they’re so volatile right now, which shows that there are plenty of people waiting in the wings for the right time to enter the market," said Redfin Economics Research Lead Chen Zhao. "Where mortgage rates go from here largely depends on how the Fed reacts to chaos in the banking industry in the U.S. and abroad, alongside stubbornly high inflation."

While the lower rates are making it cheaper to buy a home and prices are coming down, the average mortgage payment is still almost a quarter more than it was last year. And despite homebuyers rushing to get a lower rate, overall demand in the market remains weak. Pending home sales are down 17% compared to 12 months ago, the biggest drop in six weeks.

White House provides an update on the Silicon Valley Bank collapse

This week, we took decisive action to stabilize the banking system without putting taxpayer dollars at risk. That action was necessary to protect jobs and small businesses, and no losses will be borne by the taxpayers. Our banking system is more resilient and stable today because of the actions we took.  On Monday morning, I told the American people and American businesses that they should feel confident that their deposits will be there if and when they need them.  That continues to be the case.

Joseph Biden, POTUS
Where does the money to ‘bail out’ banks come from? Is taxpayer money being used?

Last week the FDIC announced that “no losses associated with the resolution of Silicon Valley Bank will be borne by taxpayers.”

The failure of the bank reminded many onlookers of the 2008 financial crisis that required the public to save major financial institutions to avoid an even greater economic crisis. However, many families and individuals who lost their homes, jobs, and retirement were not so lucky. For many in this group, the events following the SVB collapse were a painful reminder of how far the US government will go to protect the wealthy and powerful while leaving those without such high incomes to fend for themselves when major financial institutions are mismanaged and take risky bets they cannot afford.

Read our full coverage for details on how the FDIC plans to pay for the bailout and the response from leaders on Captiol Hill.
What is the average Social Security check at age 66?

Retiring at 66 is the full retirement age for some Americans but for others they will need to wait longer to access their benefits without being penalized.

The retirement age when Americans can claim their full benefits has been steadily increasing. Currently, those who were born in 1960 and after will need to wait until they are 67 years old, and one month, to reach the full retirement age.

AS USA's Oliver Povey tells us more about what could happen to your benefits if you retire early
Which states are sending winter relief checks up to $1,000 and who qualifies?

Even as inflation falls, prices remain high, prompting some states to send relief checks to their residents.Where are they being sent?

Welcome to AS USA's live blog on inflation relief and financial news

Throughout the day we will bring you the latest updates on measures being taking to bring down inflation and provide relief to Americans coping with rising prices. As well, the emergency measures to shore up the US banking system to avert a crisis after two major bank failures and others left teetering.

We'll also keep you informed on the 2023 tax season and tax credits to keep in mind when filing this year as well as other financial news happening.

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