Relief checks summary news: 22 march
US Finance News: Latest Updates
Headlines: Wednesday, 22 March, 2023
- Eight celebrities charged by SEC for illegally promoting crypto assets, founder charged with fraud
- Unemployment could surpass 4.5 percent in the US this year
- Fed hike interest rate by 25 basis points, how will it affect loans?
- Bank stocks hold steady after rescue of Credit Suisse
- Central banks announce "coordinated action to enhance provision of liquidity"
- Fed set to raise interest rates again this week, despite turmoil
- First Republic Bank struggles to survive, is considering options including sale
- Wall Street warns of increased recession threat
- Social Security COLA may be much lower next year - why?
- Some US states sending $1,000 winter relief checks - find out more
Tax season 2023:
- What refundable and non-refundable tax credits are available to taxpayers?
- How you can claim up to $2,000 from the Mortgage Interest Tax Credit
The Federal Reserve’s Federal Open Market Committee has released its quarterly economic outlook and projections, which forecast the median unemployment rate for 2023 to hit 4.5 percent.
Additionally, the Fed’s projections do not provide insights into how these various groups will be impacted by increases in unemployment spurred by rate hikes. Nobel Prize-winning economist, for those value mainstream credentials Joseph Stiglitz, has warned that young men of color, a group whose unemployment rate is already higher than the national average, could see worklessness rise by anywhere between fifteen to twenty percent given where the Fed has set interest rates.
Read more on how high the Fed believes unemployment could rise and the response from political leaders on the central bank's continued rate increases.
The Earned Income Tax Credit (EITC) can put thousands of dollars in taxpayers’ pockets that qualify to claim it. The credit is aimed at low-income workers and their families possibly worth almost $7,000. However, the credit comes with strict rules on who is eligible and the amounts that they can claim.
The Internal Revenue Service warns taxpayers that they are responsible for making sure that everything on their tax return is correct, even if someone else prepares it for you. Mistakes could result in your refund being delayed, an audit or the tax agency denying some or all of a credit claimed.
In the event that the IRS finds that you sent an erroneous tax declaration, the agency will send you a letter to inform you. You will need to pay a penalty and any money, along with interest, that you may owe the IRS if reasonable cause does not apply.
Read more from Greg Heilman for guidance if your EITC is denied.
Eggflation is declining
For many grocery shoppers, the price of eggs reached shocking levels earlier this year. With companies exploiting scares over avian flu, supply fell, and prices rose rapidly.
The Bureau of Labor Statistics is now reporting that in February, the price of eggs began to fall, a positive sign for shoppers. The agency also noted that the price of milk and other basic food staples also fell. However, particularly with eggs, the fight to bring down prices is not over, considering that they are still 64% more expensive compared to February 2021.
Read more on the impacts of inflation on food.
Cooling housing market means lower downpayments for homebuyers
January marked the third month in a row that the average downpayment fell. At $42,375, that the lowest they’ve been in two years. However, they are still 30% above pre-pandemic levels. There are several reasons why downpayments are reducing not least of which comes down to a cooling housing market meaning less competition and lower home prices than the roaring pandemic years.
“One silver lining of high mortgage rates and economic turmoil is that they’ve slowed competition. That means buyers are often able to purchase a home without facing a bidding war and don’t need to fork over a huge portion of their savings for a down payment to grab sellers’ attention,” said Redfin Senior Economist Sheharyar Bokhari. “Today’s buyers are also able to save money in other ways: Nearly half of sellers are offering concessions, like helping pay for a mortgage-rate buydown or covering closing costs, to attract buyers.”
The US Securities and Exchange Commission (SEC) has announced charges against Chinese cryptocurrency entrepreneur Justin Sun and three of his companies for illegally selling crypto securities and fraudulently inflating the trading volume of them. As well eight celebrities have been charged with illegally promoting the crypto assets Sun founded, Tronix (TRX) and BitTorren (BTT), while not disclosing that they were paid to do so.
The Federal Reserve has announced yet another interest rate increase, moving the federal funds rate up to 4.75-5 percent.
The federal funds rate is set by the Fed and is used as a benchmark with which banks borrow and lend to each other. It is not the exact rate that customers experience, but the two are closely linked.
The Fed is hoping that continuing to raise rates will cool the economy by discouraging borrowing. However, for those who already have some kind of credit mechanism or loan, this strategy has been costly. We take a look at the consequences for some of the most common types of borrowers...
Though tax season is coming to an end, it is no less important to file your taxes. Tax refunds can be an extra boost in your bank account in the run-up to summer and there are a couple available that you may be able to take advantage of.
A credit available is the Earned Income Tax Credit (EITC), which is aimed at low-income workers and their families possibly worth almost $7,000. EITC recipients can receive up to $6,318. However, the exact amount will depend on the situation of each family or individual applying, such as the number of children one has or annual income.
Read more to find out if you qualify and for how much?
While inflation has fallen for several months, prices today remain, on average, six percent higher than those paid by consumers a year ago. To help residents keep up with inflation, three states are providing direct relief.
Federal Reserve opts for a quarter-point interest rate increase
the Federal Reserve’s Federal Open Market Committee.finished its two-day meeting on Wednesday. Two weeks ago, based on stronger-than-expected economic data on the US economy, experts were forecasting a 50 basis point rate hike. However, despite continued robust economic data, a banking crisis gripped the nation and went global.
The Biden administration reacted quickly to shore up confidence in the system but doubtrs still linger. Given the uncertainty in markets, policymakers opted for a smaller increase of just 25 basis points.
Still down by more than half from peak, Bitcoin surges. Why?
Bitcoin has come surging back since the start of 2023 after plummeting the year before along with other digital coins. The original cryptocurrency, although some experts in money markets doubt it should be called a currency, has seen its value rise by over 70% since the start of the year. However, it is still well-below its peak in November 2021, when it hit $69,000, at less than $29,000. So why has Bitcoin been rising recently?
Interest rates. The Fed has been raising the cost of borrowing at a pace not seen in four decades, one of the reasons digital coins had a rough patch, to tackle inflation, but the prediction is that central bank policymakers are reaching the end of monetary tightening. That would bouy risky assets like Bitcoin, and it is very risky, with price spikes and drops that can give one vertigo.
"Bitcoin is not just a risk asset, it is arguably the most sensitive to monetary liquidity out of all of the risk assets," Noelle Acheson, an economist who has tracked the crypto sector for seven years told Reuters.
But who is investing?
Analysts say retail investors, both big and small, which are its core users have driven the rise. However, institutional investors have been taking the opportunity to get their money out, with bitcoin investment products, favored by them, seeing $113 million in outflows last week, a move ascribed to seeking liquidity as turmoil in the banking sector continues.
Hedge fund executive: More banks to fail within two years
The banking turmoil sparked by the collapse of Silicon Valley Bank is not yet over, and a significant number of banks will fail within two years, according to the CEO of hedge fund Man Group.
Asked whether the crisis in the sector was over, Man Group's Luke Ellis said he did not think so.
"I think we will have significantly more banks that don't exist in 12-24 months," Ellis said, adding that he thought smaller and regional banks in the United States could be at risk.
Ellis said the growth in social media had accelerated how quickly concerns about banks circulate.
"Things happen at a much faster speed. Whether that's a crisis or it's good news," he said.
Many hedge funds have made money from the banking sector volatility in recent days by betting against banks.
As the US job market continues to evolve, certain professions have become increasingly popular due to various factors, including changing demographics, evolving societal needs, and rapid technological advancements.
In this article, we explore some of the most in-demand professions in the US, their average annual gross salaries, job descriptions, estimated number of professionals in the country, average age of those professionals, gender breakdown, average retirement age, and reasons for their high demand in the current job market.
Demand for mortgages on the rise
Applications for mortgages have risen for the third straight week as rates fell for the second consecutive week.
The purchase index, which measures mortgage applications for the purchase of a home, rose by 2.2% from the previous week.
Demand for both purchases of homes and refinancing was up.
Steep housing prices and mortgage rates have put off many potential home buyers, so the drop, even a slight one, has bolstered home-buying activity.
Around five million Texans, or around eighteen percent of the state’s population, lack access to healthcare. Rates among children are also the highest in the US, with around one in ten children being uninsured. The lack of healthcare coverage, especially in the case of children, can lead to long-term health consequences that, in many cases, could have been avoided through routine medical checkups.
In 2010 the year the Affordable Care Act was passed, 23.3 percent of the state’s population —over one in five residents— was uninsured. Six years later, this number had dropped to 16.6 percent. In 2018, the ACA’s individual mandate, which allowed the federal government to penalize people insured people, was deemed unconstitutional by the Supreme Court. Without an enforceable mandate, the number of insured residents began to rise once again. By 2019, 18.4 percent of residents were uninsured. Today, while rates have fallen, data from the Consumer Price Index for Dallas and Houston show that many in the state are paying more for medical services than ever before.
Read our full coverage for details on who qualifies for Medicaid in Texas.
Eligible borrowers can have their student debt forgiven after 10 years through the Public Service Loan Forgiveness (PSLF) program.
AS USA's Greg Heilman has the full lowdown on the scheme.
Oil prices rebound after hitting lowest since 2021
Oil prices rebounded and rose over 1% on Monday after sliding to their lowest levels in 15 months after worries that the banking crisis could spark a recession.
Oil prices rebounded as Wall Street posted gains. Last week, both benchmarks shed more than 10% as the banking crisis deepened.
Oil's early slide occurred despite a historic deal in which UBS, Switzerland's largest bank, agreed to buy Credit Suisse in an attempt to rescue the country's second-biggest bank.
After the deal was announced, the U.S. Federal Reserve, European Central Bank and other major central banks pledged to enhance market liquidity and support other banks.
The US economy has powered forward despite aggressive rate hikes leading to expectations the Fed would up the ante after slowing the pace of increases two months in a row when they gathered for their March policy meeting.
However, turmoil in the banking sector over the past two weeks has changed that.Here’s what experts think will be announced today after the conclusion of the two-day meeting of the Federal Reserve’s Federal Open Market Committee.
Less bidding wars by homebuyers as home sale prices decline for first time since 2012
The median sale price of a US home decline for the first time year-over-year in February since 2012 dropping 1.2% to $386,721. Homebuyer demand has slowed dramatically in the face of higher mortgage rates forcing sellers to come to terms with the idea that their home won’t sell for as much as their neighbor’s did last year.
“The drop in prices is bringing more house hunters off the sidelines, but they’re in no rush because rates are high and they have the upper hand,” said Andrew Vallejo, a Redfin real estate agent in Austin, Texas. One of the metro areas that has seen the largest decreases in home sale prices, down 12.4%.
Competition from homebuyers bidding on a purchase ticked up slightly since January last month to 45.2% but is still far below the rate from last year when 66.4% of home sales received at least one competing bid.
Real wages down 1.3 percent since February 2022.
Real wages are down 1.3 percent compared to February 2022.
This news from the Bureau of Labor Statistics also came with news that the number of hours hours worked by the average worker has also fallen by 0.6 percent.
When accounting for the decrease in hours worked, the decrease in real wages increases to 1.9 percent. In other words, the average worker in the US is making nearly two percent less in wages than they were this time last year.
Each month, the Social Security Administration (SSA) sends money to retired workers, people eligible for Social Security and Supplemental Security Income (SSI), and others, like recipients of disability or survivor payments, including divorcees.
According to the SSA, individuals who have reached age 62, are unmarried, and divorced from someone entitled to Social Security retirement or disability benefits, may be eligible for benefits based on their history.
Check out our full coverage for more details on legibility.
Daily finance news: welcome
Good morning! Welcome to our finance news live blog for Wedneday, March 22, 2023.
We’ll be providing you with updates on inflation relief measures in the US - and, after UBS agreed to buy its ailing rival Credit Suisse and as First Republic Bank struggles to stay afloat, we’ll also bring you the latest on the ongoing crisis in the banking sector.
With just under a month to go until the tax deadline in the States, we’ll also have the information you need on filing your return, and how you can take advantage of the tax credits on offer to US taxpayers.