USA finance and payments: summary news | 8 June
US finance: live updates
Headlines: 8 June 2022
- Average US gas price reaches $4.955 per gallon, with experts predicting a $6 average later this year. Where are the highest and lowest prices?
- Secretary Yellen urges Congress to approve $80bn for IRS to chase tax cheats, reduce backlog
- Select Massachusetts residents to receive $500 direct payment
- Tesla boss Elon Musk backtracks on job cuts after saying that 10% of workers would be laid off
- Federal Reserve expected to address 40-year-highs in inflation with interest rate hikes
- North Carolina lawmakers propose a $200 tax refund for drivers
- Unemployment falls to lowest rate since 1969, May jobs report shows
- Treasury Secretary Yellen says she was "wrong" about the path of inflation
Helpful info & links
- A few helpful tips for saving money
- California State Disability Insurance scheme: the lowdown
- Why are mortgage rates beginning to decrease in the US?
- Pennsylvania governor wants to send residents $2,000 stimulus check
- North Carolina Democrats propose $200 gas tax rebate
More AS USA related articles:
The average price of a gallon of gas in the US has hit $4.95 for Regular, $5.30 for Mid-Grade, $5.59 Premium, and $5.71 for Diesel. Up almost $2.00 across the board compared to prices paid at the pump last year.
The state paying the highest for a gallon of regular gasoline is California where the gallon has reached $6.39. Governor Gavin Newsom has proposed a gas stimulus check or rebate for up two cars per household to offset costs for residents. Drivers will be able to receive $400 per vehicle.
Yellen says Child Tax Credit had nothing to do with inflation
Treasury Secretary Janet Yellen addressed concerns about inflation when she spoke to the Senate Finance Committee this week. She repeatedly rejected Republican assertions that the highest inflation in four decades has been driven by Biden's $1.9 trillion American Rescue Plan.
"We're seeing high inflation in almost all of the developed countries around the world. And they have very different fiscal policies. So it can't be the case that the bulk of the inflation that we're experiencing reflects the impact of the ARP," she told the committee.
When asked about the Child Tax Credit payments made last year, she said they were a relatively small expenditure and "utterly nothing" to do with boosting inflation. Yellen repeated that inflation was being fueled by persistent supply chain disruptions and new covid-19 variants, along with high energy and food prices caused by Russia's war in Ukraine.
An announcement from President Biden on his plans to cancel student loan debt was expected at the end of May, but the tragic school shooting in Uvalde, Texas forced a change of plans. According to The Wall Street Journal, White House officials say that the announcement on forgiveness is likely to come this summer, sometime in July or August.
The more than 43 million Americans with student loan debt have been anxiously awaiting what the president will decide with moratorium on payments set to expire 1 September. A report from the Consumer Financial Protection Bureau in April warned that millions could be at risk of delinquency or default when payments restart which have been frozen since March 2020.
Chance of a recession is a coinflip says Nobel laureate and economist
Robert Shiller, Nobel laureate and economist, said there is a "good chance" of the US entering a recession. He told Bloomberg Wednesday that the odds of a recession in the next few years are basically a cointoss. The 50 percent chance is "much higher than normal" and is at least in part the result of a "self-fulfilling prophecy" as worries about a downturn increase among investors, companies and consumers.
Select residents in Massachusetts are going to start receiving $500 direct payments from the state, part of the Commonwealth’s Essential Employee Premium Pay Program.
This round of payments will be sent out on Tuesday, 7 June with more than 300,000 residents expected to be eligible for the financial support. In the first year of the pandemic the federal government issued three rounds of stimulus checks but that well has dried up, with President Biden now turning his attention to the high rate of inflation.
Ford F-150 Lightning owners surprised by inclusion of adapter to charge stalled Teslas
Ford F-150 Lightnings customers, who managed to buy one, can now get behind the wheel of their new truck. One of the features that the car maker put a lot of effort into was giving users of the all electric vehicle the ability to use the truck's massive battery to power more than just the motor.
This includes a work site, campsite or even a house should the power go out. Also other electric cars that run out of juice. To the surprise of customers surprise they found an adapter to be able to charge Teslas that wasn't listed among the standard accessories. CEO Jim Farley gives his word that the company is not trolling, merely giving F-150 owners the ability to lend a hand to someone in need.
Volatility in the price of cryptocurrencies has taken investors on a rollercoaster ride over the past year. But with supposedly stablecoins becoming unpegged from the dollar in May, Terra Luna basically became worthless, the digital coin market went into freefall.
The oldest and biggest of the digital coins, Bitcoin, is now hovering around $30,000 less than a third of its value in March. It has lost over half its value since it reached its peak in November last year, but some investors are venturing back into the market, though cautiously.
FTC returns money to consumers recovered from mortgage relief scam
The Federal Trade Commission recovered $164,000 from a 2016 bogus mortgage relief scam that falsely told homeowners they could be saved from foreclosure and receive financial awards. The scheme was operated under the names Brookstone Law and Advantis Law which charged consumers $895 or more for a “legal analysis” and thousands of dollars in recurring legal fees.
The FTC is sending 2,155 checks to consumers who were harmed in the scam which need to be cashed within 90 days. "Recipients who have questions about their refund, or who didn’t receive a check and believe they may be eligible for a refund, should call the refund administrator, JND Legal Administration, at 855-606-0653. The Commission never requires people to pay money or provide account information to get a refund."
The consumer protection agency will have a harder time doing its job and recovering money for consumers in the future though. In April the Supreme Court decided that it "lacks authority under Section 13(b) to seek monetary relief in federal court going forward." The Commission is calling on Congress to restore its authority to seek monetary redress for consumers.
In 2020 it secured more than $483 million in refunds to consumers across the country. Without its powers under Section 13(b), the FTC ability to stop illegal conduct from reoccurring is also jeopardized.
Today the AAA has confirmed that the average price of a gallon of gasoline across the United States is $4.955, closing in on the $5-per-gallon figure that would have been unthinkable last year.
Just 12 months ago the average price was $3.060. Consumers are now being forced to pay nearly $2 more per gallon that they were a year ago, and that is having a severe effect on the household finances of millions of Americans.
$5 national gasoline average is just around the corner
On Wednesday, 8 July the AAA calculated that the average price of a gallon of gasoline in the United States had reached $4.955, once again breaking the all-time record. Just one year ago the average price was just over $3 per gallon, but a confluence of factor in the last 12 months have conspired to send the price skywards. Experts have been predicting a $5 national average for weeks, but it looks like we are finally on the cusp of that bleak milestone.
An adjustable-rate mortgage (AJM) has a variable interest rate, meaning that rate shifts over the life of the loan. Those who take out a traditional or thirty-year mortgage lock the interest rate that will be applied to their principal balance when they sign the agreement.
Refinancing is an option but the borrower would need to apply to their servicer to see a decrease in their interest rate. ARMs will offer one interest rate for the first few years of the loan, and then the bank will adjust the rate applied to the principal balance.
Social Security is often only thought of as a program supporting retired Americans, bu the SSA actually oversees a wide variety of programs. Social Security Disability Insurance (SSDI) provides financial assistance for people with disabilities, who are unable to work or to earn a sufficient amount. The program pays benefits to the claimant and in some cases family members, provided they are ‘insured’.
The ‘insured’ status is calculated based on the individual’s earnings history, requiring that people have contributed a certain amount to the Social Security Administration (SSA) during the course of their life.
Experts predict continued inflation
Speaking to CNBC's Closing Bell, Brian Belski, BMO Capital Markets chief investment strategist, explains how the Federal Reserve's rate hikes could affect the continued high rate of inflation. Price rises have hurt consumers in the US, and with wages unlikely to increase in line with inflation many workers will find themselves out of pocket.
Lawmakers call for greater protections for crypto investors
"Digital assets, blockchain technology and cryptocurrencies have experienced tremendous growth in the past few years and offer substantial potential benefits if harnessed correctly. It is critical that the United States play a leading role in developing policy to regulate new financial products, while also encouraging innovation and protecting consumers."
"As this industry continues to grow, it is critical that Congress carefully crafts legislation that promotes innovation while protecting the consumer against bad actors."
US govt blames Russian invasion for price rises
Since Russian forces first invaded Ukraine back in February, a coalition of Western powers have imposed increasingly tough restrictions on trade with Russia in a bid to punish the country economically. Most crucial amongst those measures has been the sanctions on Russian-produced natural gas and crue oil, central components for all developed nations. As a result of these measure the availability of the natural resources has plumetted and the prices for consumers have risen across the board.
National average gas prices near $5 per gallon
This time last year the average price of a gallon of gasoline in the United States was barely $3; twelve months on and the average price looks set to breach the $5 threshold for the first time in history. Today AAA report that the average price in the US is $4.955 for a gallon of gasoline, just a few cents away from the previously unthinkable figure of $5 per gallon.
This cost affects not only motorists, but also contributes to high prices across the board because of the additional costs for transportation that manufacturers and stores are forced to pay.
Taxpayers have the opportunity to put money away for their retirement, while also reducing how much they own to Uncle Sam. The Saver’s Credit, also known as the Retirement Savings Contributions Credit, can lower your tax burden by up to $2,000 when you contribute to a qualifying retirement account.
Contributing to a retirement account is an allowable tax deduction, potentially lowering your adjusted gross income and further reducing the amount of taxes owed.
Sen. Warnock proposes gas price legislation
In recent months the high gasoline prices afflicting consumers in the United States has been blamed primarily on the Russian invasion of Ukraine and the rampant inflation increases that have pushed up prices across the board. However another factor in the increase has been some pretty blatant profiteering on the part of gas companies in the US, pumping up the prices to fatten their margins.
Democratic Sen. Raphael Warnock has proposed legislation that would impose a windfall tax on gas companies' profits to disuade them from increase prices further.
World Bank warns of serious threat to the global economy
The World Bank has slashed its global growth forecast, warning that Russia’s invasion of Ukraine has compounded the damage from the covid-19 pandemic and could push many countries into recession.
In its Global Economic Prospects report, the World Bank cut its forecast for world GDP growth this year to 2.9%, from 4.1% previously, and warned there is a considerable danger of stagflation.
Bipartisan group proposes new cryptocurrency bill
Crossbench Senators Kirsten Gillibrand and Cynthia Lummis have brought forward legislation that will create a regulatory framework for digital assets, imposing significant controls on the cryptocurrency markets for the first time.
With terrible fortunes for the cryptocurrency market since the turn of the year, calls have grown for further regulation to protect investors. The proposed legislation will give regulatory authority over digital asset spot markets to the Commodity Futures Trading Commission (CFTC), which regulates commodities markets.
Yellen requests $80 billion for "under seige" IRS
Reuters - US Treasury Secretary Janet Yellen told a hearing of the Senate Finance Committee that the IRS is desparate need of $80 billion boost to budget. "The IRS is under siege. It is suffering from huge underinvestment," she said. The money would help the tax collecting agency recover $600 billion in unpaid tax bills and clean up a huge backlog of tax returns.
Yellen told the committee that the IRS lacked the personnel needed to carry out complicated audits of higher-earning taxpayers. "The resources of the IRS have been cut to the point where they've largely cut back on the complicated audits, the ones that are harder, of high income taxpayers."
When asked about lower-income taxpayers that claim the EITC being five times more likely to be audited, "The fact that such a large share goes to audit the EITC is very unfair," the Secretary said.
While some costs reduce for people when they retire, old age can also bring more ailments necessitating trips to the doctor. For most Americans, one of the largest expenses in retirement is expected to be healthcare.
Healthcare costs have been rising dramatically over several decades and are expected to keep rising. Based on the current trends, Fidelity has calculated that the average 65-year-old couple that retires in 2022 could now need around $315,000 to cover future healthcare expenses including Medicare premiums and out-of-pocket expenses.
Is a four-day week the future?
The largest pilot program of a 4-day work week is set to begin on Monday in the United Kingdom. Workers will reduce the timetable by 20 percent but still take home 100 percent of their pay pre-trial.
The pilot program will involve 70 businesses with a combined total of 3,300 workers and will run for six months. Another program is underway in the US and Canada, with another scheduled for later this year.
Until now, Iceland had conducted the biggest pilot of this kind between 2015 and 2019. The results were positive with a dramatic increase in employee well-being and no corresponding drop in productivity.
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We'll have all the latest news on the high rate of inflation and continued gasoline price rices, as well as updates on all financial news from the United States.