Stimulus checks news summary | 7 March 2023
US Finance News: Latest News
Headlines: Tuesday, 7 March 2023
- Fed Chair Jerome Powell expected to outline interest rate hikes in congressional appearance
- Fitch ratings agency warns that US rating could be downgraded
- Experts warn of an impending 20% drop in US housing
- Some states continue to send stimulus and relief checks in March
- What to do if your tax refund does not arrive
- IRS offers tax $7,500 tax credit for new EVs
2023 Tax Season
- Who can claim the additional standard deduction?
- The way to access IRS transcripts to ensure a faster tax refund
- Did you receive a state stimulus check? No need to report the payment as income to the IRS.
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The rising cost of groceries, a major part of most American’s budgets, continues to impact household finances across the nation. While overall inflation across the United States has been slowing over the past several months, the price of putting food on the table at home surged again in January, up 11.3 percent from the same time last year.
Faced with this situation, American consumers and families are looking for lower grocery prices, since these often vary from one store to another. That is why we will share with you the five cheapest supermarkets in the United States.
Reliable recession indicator sounds alarm after Fed chair hawkish statements
Nine of the last ten US recessions have been predicted by an inverted yield curve between 2-year and 10-year US Treasury bonds. While the curve first went negative in July 2022, after Federal Reserve Chair Jerome Powell made hawkish statements on interest rate policy going forward in Tuesday’s Senate hearings the curve hit levels not seen since 1981.
The key indicator shows that investors are more pessimistic about the future of the economy, worried that the Fed will overcorrect plunging the economy into recession. However, not all analysts are convinced that will be the outcome, as the US economy has show itself to be incredibly resilient in the face of aggressive rate hikes up to now with economic data exceeding forecasts.
Requirements to receive up to $7,000 for the Earned Income Tax Credit Refund
Every year, many Americans leave money on the table failing to claim tax credits that could reduce how much they owe to Uncle Sam, or even be fatten up their tax refund by thousands of dollars. Once such overlooked credit is the Earned Income Tax Credit (EITC), which is aimed at low-income workers and their families possibly worth almost $7,000.
The 2023 Child Tax Credit is available to parents with dependents under 17 as of 31 December 2022 and who meet certain eligibility requirements. In 2021, the American Rescue Plan made big changes to the credit for one year that helped many families by allowing them to receive half of the value of the credit over six months rather than as a bulk sum when they file their taxes.
We take a look at the Child Tax Credit for this year, and who is eligible to receive the support...
Many Americans rely on getting their tax refund to have additional money to make a large purchase. How you file your tax return can help avoid delays.
Where is the housing market headed as mortgage rates rise again?
Robert Reffkin, CEO of online real estate brokerage Compass, spoke with CNBC's Closing Bell: Overtime on where the housing market is headed. In December, pending listings that had accepted offers were down 40 percent, but in every week since then the number of listings with accepted offers has increased. Even in February when prices were higher than in January. Given what he sees now, he stands by his call that the fourth quarter of 2022 was the bottom of the housing downturn.
How much do you need to earn to afford a home purchase?
According to the US Department of Housing and Urban Development (HUD) definition of affordable housing, the occupant should not be paying more than 30 percent of gross income for housing costs, which includes utilities. For those looking to purchase, homeownership comes with additional costs beyond mortgage payments, like insurance, taxes and property maintenance.
That’s why as a rule of thumb, Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors recommends using “a 25 percent share of mortgage payment to income.” That leaves new home buyers with breathing room for those added expenses they will encounter.
BRENDAN MCDERMID / REUTERS
Stock values plummet as Fed Chair Powell testimony sparks fear of higher and longer interest rate hikes
Wall Street traders reacted negatively to testimony before the Senate Banking Committee by Federal Reserve Chair Jerome Powell. Tuesday saw a major selloff of stocks on fears that policymakers at the central bank will hike rates higher than expected when they meet in two weeks. As well investors worry that interest rate cuts will be put off for longer.
Federal Reserve Chairmen Jerome Powell testified before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. What did he say about the economy and interest rates?
Sen. Warren to Fed Chair Powell: "We need a Fed that will fight for families"
Powell: I would say that even 4½% unemployment is better than most of the time for the last, you know, 75 years.
Warren: In other words you don’t have a plan to stop a runaway train if it occurs. You know Chair Powell, you are gambling with people’s lives and there is a pile of data showing that price gouging and supply chain kinks and the war in Ukraine are driving up prices. You cling to the idea that there’s only one solution, lay off millions of workers.
We need a Fed that will fight for families and if you’re not gonna lead that charge, we need someone at the Fed who will.
Heated exchange between Senator Warren and Fed Chair Powell
Warren: "If you could speak to the 2 million hardworking people who you're planning to get fired, what would you say to them?"
Powell: "Will working people be better off if we just walk away from our jobs and inflation remains 5%-6%?"
Senator Elizabeth Warren begins her questioning for Chairmen Powell.
Federal Reserve Chairmen Jerome Powell says unemployment will increase as a result of the Fed's actions
To restore price stability, we will need to see lower inflation in this sector, and there will very likely be some softening in labor market conditions.
Federal Reserve Chairmen Jerome Powell addresses the Senate
My colleagues and I are acutely aware that high inflation is causing significant hardship, and we are strongly committed to returning inflation to our 2 percent goal. Over the past year, we have taken forceful actions to tighten the stance of monetary policy. We have covered a lot of ground, and the full effects of our tightening so far are yet to be felt. Even so, we have more work to do. Our policy actions are guided by our dual mandate to promote maximum employment and stable prices. Without price stability, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of labor market conditions that benefit all.
Senator Tim Scott attacks Democrats over inflation
Vice Chair of the Senate Committee on Banking, Housing, and Urban Affairs, Tim Scott (R-SC), lays the blame for inflation on Democratic spending.
Senator Tim Scott's opening statement says "runaway spending" to at fault for inflationary pressure in the market, completely ignoring the impact of corporations and price gouging, the Russian invasion of Ukraine, supply chain breakdowns, and many other factors that led to a historic increase in prices over the last year.
Vice Chair of the Senate Committee on Banking, Housing, and Urban Affairs, Tim Scott (R-SC) lays the blame of inflation on Democratic spending.
Senator Tim Scott's opening statement says "runaway spending," to at fault for inflationary pressure in the market, completely ignoring the impact of corporations and price gouging, the Russian invasion of Ukraine, supply chain breakdowns, and many other factors that led to a historic increase in prices over the last year.
Interest rates could continue to rise
As the Senate hearing featuring testimony from Federal Reserve Chairmen Jerome gets underway, the Wall Street Journal reports that rate increases are likely to continue. Not only are rates likely to rise, but the pace at which those hikes could be implemented could speed up.
Chairmen Powell is likely to speak to the Federal Reserve's plan during the hearing.
Tune in as Federal Reserve Chairmen testifies in front of the Senate
On Capitol Hill this morning, Chairmen of the Federal Reserve Jerome Powell will testify before the Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
Interest rates news expected in two hours
The markets had a quiet day on Monday, likely because investors were nervously awaiting Federal Reserve Chair Jerome Powell's appearance before Congress today. The head of the US central bank has embarked on a policy of repeated interest rate hikes to bring down inflation, and Powell is expected to give an update on those efforts later.
We'll have all the coverage right here, reacting to Jerome Powell's testimony in Congress today...
Food stamps, also known as SNAP benefits, are jointly overseen by federal and state authorities, meaning that the delivery of the support varies across the country. In California the program is known as CalFresh; a state-supervised and county-operated initiative.
California has no asset or resource limit for SNAP benefits, but does have eligibility requirements on both gross and net income. The gross income limit is 200% of the federal poverty level, while the gross figure is 100%.
We take a look at who is eligible for the program...
Will interest rates increase again?
Later today Jerome Powell, Chair of the Federal Reserve, will appear before Congress later today to inform lawmakers of the country's current economic situation. High inflation has been the major issue for Americans for much of the past year and the Fed has imposed a series of interest rate hikes in a bid to curb price rises. Powell is expected to outline whether these interest rates have been successful, and whether he believes more will be required in the near future.
During 2022 more than 20 states sent out some form of inflation relief payment to residents to help with the soaring cost of household essentials. The IRS has confirmed that none of those payments will be subject to taxation from the federal agency, meaning that they do not need to be included in your tax return this year.
Payments like California's Middle-Class Tax Refund are classified as a “payment [...] made for the promotion of the general welfare or as a disaster relief payment,” meaning that the checks will not be taxed at the federal level.
Markets brace for interest rates and employment data
Monday saw a quiet day on Wall St as the market held their breath in anticipation of Jerome Powell's appearance before Congress, starting later today. The Federal Reserve Chair has been tight-lipped on the prospect of further interest rate hikes, although many now expect that further increases will be required to bring the rate of inflation closer to the Fed's target of 2%.
This week, with Powell's appearance and the upcoming February jobs report set to land, could be a crucial bell-weather for the strength of the United States' economy.
What will Jerome Powell say about interest rates?
All eyes will be on Congress today as Jerome Powell, Chair of the Federal Reserve, makes his first appearance at the Capitol since June 2022. The Fed Chair is expected to outline the efficacy of the cental bank's inflation-busting efforts and may give some insight into the likelihood of more interest rate hikes in 2023.
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President Biden's attempts to pass widespread student debt relief for borrowers has been held up in the courts after a number of legal challenges were brought against his Student Loan Forgiveness program. The matter is now being considered by the Supreme Court, but many commentators predict that Biden's proposal may be rejected by the Justices.
If that were the case, what next for Biden and his student loan efforts?
Who is eligible for IRS free filing help?
The tax agency has made certain online resources available to senior citizens to help with the process of tax filing this year. Seniors and retirees are able to take advantage of the Free File online portal, designed to simplify the filing process.
For more information, and details of other groups who are eligible for the support, head over to the IRS website...
You may eligible to claim a tax credit worth up to $7,000 when you file taxes this year, a huge amount as households continue to struggle with the consequences of historically high inflation. Price soared in 2022 and the IRS acted to raise the eligibility requirements for financial relief intitiatives, such as the Earned Income Tax Credit (EITC).
We take a look at who is eligible for the support...
Is now a good time to buy property?
The housing market is undergoing a period of negative growth at the moment with house prices falling on average across the country. This comes as mortgage rates have hit historically high level, a consequence of the interest rate hikes introduced by the Federal Reserve to combat high inflation.
This combination of factors has led to some experts advising prospective home-owners that now is not the best time to buy.
In-person tax assistance from the IRS
The tax agency is aiming to work through the backlog of unfiled tax returns from previous years and is confident of administrating this tax season much more swiftly than in recent years. The IRS is benefitting from additional federal funding this year and will be offering in-person tax assistance this Saturday at selected locations.
Find out more...
Welcome to AS USA
Good morning and welcome to AS USA, home of all the latest financial news and information in the United States. We'll have updates from Federal Reserve Chair Jerome Powell's appearance in Congress today, as well as the latest on tax season 2023.