US financial news summary | 1 August 2023
Headlines: Tuesday 1 August 2023
- Biden administration launches new student debt repayment plan
- Federal Reserve has announced a 0.25% hike in interest rates
- Inflation in the US was at 3% in June, as Fed bids to cut rate to 2%
- Initial unemployment claims fell by 9,000 in week ending 15 July, to 228,000
- June jobs report showed that US added 209,000 jobs last month
Take a look at related AS USA news articles:
A reverse mortgage allows homeowners aged 62 and older allowing them to access a portion of their home equity while continuing to live in their home. Unlike a traditional mortgage where the borrower makes monthly payments to the lender, a reverse mortgage works in the opposite way—the lender makes payments to the borrower.
Dangers of a reverse mortgage
Reverse mortgages are not inherently dangerous, but they do come with certain risks that borrowers need to be aware of before deciding to take one.
Since borrowers are not making monthly payments, the interest on the loan accumulates over time which could lead to a substantial debt that needs to be repaid when the loan becomes due, usually at the sale of the property . As the reverse mortgage balance grows, the remaining home equity diminishes. There can also be upfront costs, including origination fees, closing costs, and mortgage insurance premiums.
Public housing units are owned and operated by federal, state, or local housing authorities, and they aim to provide safe and affordable housing options for those who cannot afford market-rate housing. They are a departure from property owned privately or rented from landlords.
The US government website has a link to find and contact your local public housing agency.
The application process only takes about 10 minutes. The government’s new plan for student loan repayment is income-driven, and the newly launched beta site will allow borrowers to start submitting applications for the program.
For those borrowers who are currently registered under the REPAYE program, the transition to the SAVE program will happen automatically.
The Save plan will go into effect on July 1, 2024.
The Saving on a Valuable Education (SAVE) plan
For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
Guarantee that no borrower earning under 225% of the federal poverty level, about the annual equivalent of a $15 minimum wage for a single borrower, will have to make a monthly payment.
Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less.
Not charge borrowers with unpaid monthly interest, even when that monthly payment is $0 because their income is low.
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The US has various forms of economic aid with which it provides relief to those who need it most. One noteworthy program is the Supplemental Nutrition Assistance Program, popularly known as SNAP coupons.
A new month has now rolled around and with it comes a fresh round of SNAP payments.
Here are the benefit payment dates for August 2023 in each state.
Wall Street finishes strong month on upbeat company earnings
Stocks closed little changed on Monday, ending a strong July on upbeat company earnings and hopes of a soft landing for a resilient US economy.
All three major stock indexes ended with gains for the month, ahead of a busy week of earnings reports from companies including Amazon.com and Apple, plus US economic data including the jobs report.
"Without any meaningful catalysts (today), you get a market that's kind of in a holding pattern," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky, "and (that's) probably because there's so much on the near-term horizon."
(REUTERS)
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Fast-fashion wars are warmup for Amazon battle
An intensifying fast-fashion rivalry in the United States offers a glimpse of the bigger battles to come. E-commerce app Temu is taking on the larger Shein by selling cheap Chinese-made goods to Western consumers. The company owned by $119 billion PDD is more like an online dollar store. That puts it on a collision course with $1.4 trillion Amazon.
At first glance the competing smartphone apps look similar. Both have used speedy product development and supply chains in China to win over young American shoppers with bargains like $5 shirts. The pair also benefit from a trade exemption which allows Chinese packages shipped directly to US consumers to avoid import duties and tariffs provided the goods are worth less than $800. Sales at the more established Shein jumped 46% to $23 billion last year, according to the Wall Street Journal, surpassing fashion retailer H&M’s $22 billion top line.
(REUTERS)
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Every month, the Social Security Administration issues millions of payments to its beneficiaries. Most of them are retired workers or people with some type of disability.
The SSA follows a regular schedule for sending out checks. If you find that you haven't received your Social Security payment on time, here are possible reasons for the delay, and how you can claim late checks.
Since its establishment in 1997, the Children’s Health Insurance Program has played a pivotal role in lowering the number of uninsured children in the United States. The program has successfully provided millions of children with access to affordable healthcare services, leading to notable enhancements in their overall well-being.
You can apply for CHIP through various methods that depend on your state. Commonly, you can apply online through your state’s Medicaid or CHIP website, or apply by phone through the state’s Medicaid/CHIP hotline on 1-800-318-2596.
The impact of remote work on the economy and the weekend
Remote and hybrid work are boosting tourism and therefore have an impact on the economy because of more freedom to travel. The new work hours are affording more workers to have Fridays and Mondays free.
People who are working from home may be spending less on restaurants and other goods, but they are putting their money into flights, hotels, and experiences such as concerts.
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A month ago, the Supreme Court struck down the student loan forgiveness program proposed by President Joe Biden. It would have forgiven up to $20,000 in loans for low-income students.
Following the high court’s decision, the president announced a series of measures and new plans to help students and their families.
The Biden administration has now launched a new income-driven student debt repayment plan via a website.
How can borrowers apply for the program and what does it look like?
Accessing the SAVE plan
Those with federal student loans can submit their Income-Driven Repayment (IDR) Plan Request at the beta website.
The application process only takes about 10 minutes. For those borrowers who are currently registered under the REPAYE program, the transition to the SAVE program will happen automatically.
The SAVE plan will go into effect on July 1, 2024.
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The White House has produced and published the SAVE plan. For all intents and purposes, this is the replacement for debt forgiveness amidst a hostile Congress and Supreme Court; is it any improvement?
Short answer: no.
Our coverage explains why this is so.
Good morning!
In the wake of the Federal Reserve's recent move to raise interest rates, we will focus on examining its implications and how it is aimed at tackling inflation in the US.
We will also be providing real-time coverage of crucial topics like student loan repayment,SNAP benefits, and Social Security payments.