Relief Checks updates: Summary news 15 December
Headlines: Thursday, 15 December 2022
- Supreme Court will hear second challenge to Biden's Student Loan Debt Forgiveness plan
- Wall Street sinks after Powell says Fed will not lower rates in 2023
- Interest rates up to 4.5% as Fed increases them again
- Bureau of Labor Statistics finds that inflation slowed to 7.1% in November
- Founder of failed cryptocurrency exchange Sam Bankman-Fried indicted on eight criminal charges
- White House celebrates gas prices falling, national average at $3.19 per gallon per AAA
- Policymakers to begin two-day meeting to decide future moves to control inflation
- Biden administration approves $24 billion in student loan relief
- Supplemental Security Income recipients will be the first to receive COLA boost
- California continues distributing Middle-Class Tax Refund payments
- Some groups will receive two Social Security checks this month
Related news
What's the problem with inflation?
In a good year, the government aims to ensure that the US economy grows a little to ensure that there is sustained growth. However throughout 2022 we have seen growth an a dangerously high level, pushing up prices for consumers and making everyday essentials prohibitively expensive.
This becomes a major problem when price increases exceed the rate of change, as is explained in this report from CNBC...
In a bid to bring down inflation, the Federal Reserve has announced that it will increase interest rates by a further 0.5 percentage points. This is the latest in a string of interest rate hikes seen during 2022, all of which designed to cool the economy and prevent continued price rises.
After announcing the rise, Federal Reserve chair Jerome Powell said: “The inflation data received so far in October and November show a welcome reduction in the pace of price increases, but it will take substantially more evidence to give confidence inflation is on a sustained downward path.”
New legislation would offer student loan debt relief
While the Biden administration continues to battle in the courts for Student Loan Forgiveness, members of Congress are trying to pass more targeted forms of relief for borrowers. Recipients of Medicare and Social Security programs could see their outstanding student loan debt entirely eliminated if the bill were to pass in its current form.
It appears unlikely that the required 60 votes could be found to see the bill approved in the Senate, but it is a testament to the desire to offer further debt relief for students.
Europe continues anti-inflation efforts
The European Central Bank has announced that it will raise interest rates by 0.5 percentage points, marking the latest in a series of hikes designed to tackle high inflation. Earlier today the UK's Bank of England did the same, raising rates by half a percentage point.
This signals the continued pain being felt in Europe as a result of inflationary pressures and the willingness of central banks to hamper economic growth in a bid to keep price rises down.
Interest rate change remains a blunt tool to tackle a nuanced economic issue and its use doesn’t come without some pain. However, “the worst pain would be if we failed to act,” according to the Fed chair. We take a look at some of the consequences of the interest rate hike and how it could affect you…
In order to receive Social Security benefits, generally workers in qualified employment must earn 40 credits, or ten years’ worth. However, younger workers that become disabled may qualify for Social Security Disability Insurance (SSDI) with fewer credits.
The White House announced a plan to wipe out up to $20,000 in student debt in August. However, that program has been put on ice after being challenged in the courts and it could be months until there is a definitive decision on the matter.
In the meantime, President Biden has extended the moratorium on repaying student loans until the end of August or the lawsuits are settled, whichever comes first. But even if White House lawyers should fail to convince the Supreme Court of the legality of Biden’s debt forgiveness, there exist other legitimate federal programs that can erase all of a borrower’s student loan debt. Here’s a look…
Sam Bankman-Fried, founder of now-defunct cryptocurrency exchange FTX, was arrested in the Bahamas on Monday evening after American officials shared a sealed indictment with local authorities.
While building his $32 billion fortune, SBF utilised lucrative celebrity endorsements to bring new users to the site. Cryptocurrencies enjoyed a huge surge in interest in 2020 and 2021 and FTX was one of the platforms to profit from the influx of new money.
Last month, after the situation became public, an FTX investor sued Bankman-Fried and several celebrity endorsers of his bankrupt crypto company.
As the year winds down the IRS prepares for a new tax season. Get a jump on preparing your tax return. These are the new rules and how they may affect you.
How to raise you credit score to get a better interest rate on a loan
With the Federal Reserve raising interest and no plan to bring them down next year getting your credit score higher will help you secure a lower rate on any loans that you need to take out. Vivian Tu, aka Your Rich BFF, has some financial advice on how to improve your credit score in a matter of minutes.
Confused about the state of student loan forgiveness? Get your questions answered
President Biden announced his plan to cancel up to $20,000 in federal student loan debt for millions of Americans in August. Days after the online portal to submit applications went live, the legal challenges to the program forced the Department of Education to put it on ice.
The Supreme Court has now agreed to hear two separate lawsuits against the White House's debt forgiveness plan. The education team of Senator Bob Menendez of New Jersey will be hosting a webinar on Friday to answer questions regarding where the plan stands.
What next for Student Loan Forgiveness program?
President Biden's hopes of implementing widespread student loan debt relief for borrowers has faced a number of legal challenges from Republican-led states and borrowers who would not be able to receive the full amount from the program. It has left the administration unable to action the relief, pending a Supreme Court ruling.
This explainer from NBC News highlights the importance of the upcoming court decision...
TC Energy restarts section of Keystone Pipeline that carries oil to Midwest
A leak was detected in the Keystone Pipeline a week ago forcing the flow of crude oil from Canadian tar sand fields to destinations in the US. TC Energy, which operates the the pipeline estimates that 14,000 barrels were spilled, the largest such event in the Keystone Pipeline's history.
On Wednesday the company parcially restarted the flow of oil in the pipeline, opening the section from Hardisty, Alberta to to Wood River/Patoka, Illinois. This section was unaffected by the leak at Milepost 14 near the border of Nebraska in Kansas.
However, the section that carries crude to the junction at Cushing, Oklahoma before it continues onto the Gulf Coast remains closed. "The affected segment of the Keystone Pipeline System remains safely isolated as investigation, recovery, repair and remediation continues to advance. This segment will not be restarted until it is safe to do so and when we have regulatory approval from PHMSA," TC Energy said in a statement.
18 states have average per gallon gas price below $3
The price of gasoline has been steadily dropping since peaking in June. The decrease has helped inflation slow and improve consumer confidence. According to AAA, the average price nationally is $3.19. Gas Buddy reports that 18 states are now below the $3 mark with more set to cross the level soon.
Still a recent leak in the Keystone Pipeline forced the pause in the flow of 600,000 barrels per day of crude from Canada. An extended delay in restarting the flow to the Gulf Coast could reverse the months' long downward trend.
Record-breaking inflation pushed the average price of a gallon of regular unleaded to $5.02 in June, marking the first time that the average figure exceeded the $5-mark. But this week the average price of a gallon of gasoline in the United States has fallen to $3.18, more than ten cents less than the price recorded at the same point last year.
This suggests that, in terms of gas prices, the US has managed to undo the rapid price rises seen during 2022, something that President Biden celebrated on Tuesday at the White House:
“Most Americans can see the progress driving down the street, finding relief at the pump as gas prices fall,” Biden said.
So what is causing this fall in prices, and will it continue?
Why is inflation so high?
The 0.5 percentage point increase is a smaller increase compared to the 0.75 point increases enacted by the Fed earlier this year. Increasing interest rates is a blunt tool for central banks to crush inflation by making borrowing less enticing and stopping people spending, adding a risk of a recession.
But that makes sense if inflation is being driven by people spending a lot of money, but with prices affected by the war in Ukraine as well as price gouging then hiking rates may not actually have the desired effect.
What did the Fed chief say about the latest interest rate rises?
It's not as important how fast we go... our focus right now is really on moving our policy stance to one that is restrictive enough to ensure a return of inflation to our 2% goal over time, it's not on rate cuts.
The inflation data received so far in October and November show a welcome reduction in the pace of price increases, but it will take substantially more evidence to give confidence inflation is on a sustained downward path.
Despite back-to-back months of reduction in the rate of inflation, the Federal Reserve has persevered with its mission to tame it further by once again increasing interest rates.
The key interest rate has been increased by 0.5 percentage points to a target range of 4.25% to 4.50%, the highest since late 2007 during the banking crisis.
A forecast from the central bank showed that the interest rate could still be at 5% in a year’s time,meaning more increases are likely before they begin to taper off. At the beginning of 2022 the interest rate was nearly 0%.
Hello and welcome to AS USA!
Good morning! We'll be bringing you all the latest news and information on Thursday, 15 December after the Federal Reserve raised interest rates by an expected half percentage point. However, comments by chairman Jerome Powell on the central bank's policy moving forward sent markets lower.