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USA finance and payments news summary | 15 June 2022

Update:
US Finance: Latest Updates

US Finance and Payments: Latest Updates

$2,000 Child Tax Credit 2022: who is eligible for payment?

US NEWS

$2,000 Child Tax Credit 2022: who is eligible for payment?

The Child Tax Credit in 2022 will return to the conditions offered by the IRS before the American Rescue Plan expanded it. The amount of the credit is smaller, and eligibility is more restricted than last year under the rules which were established through the 2017 Tax Cuts and Jobs Act (TCJA). These changes will be in effect through the 2025 fiscal year, if no action is taken by Congress to modify the credit before then.

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Elon Musk says that Tesla FSD system is “essential” or company is “worth basically zero”

US NEWS

Elon Musk says that Tesla FSD system is “essential” or company is “worth basically zero”

Elon Musk said in a recent interview that it’s “essential” that Tesla solve its full self-driving technology (FSD). Musk feels that it should be the “overwhelming focus” for the carmaker because “it’s really the difference between Tesla being worth a lot of money or worth basically zero.”

Meanwhile, the driver-assist system has come under increased scrutiny from the National Highway Traffic Safety Administration. The auto-safety agency expanded an investigation into Teslas and on Wednesday released a report that found Teslas using driver-assist systems were involved in 273 crashes over 9 months.

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Today, President Biden is announcing that his Administration is sourcing a flight, facilitated by the U.S. Department of Health and Human Services (HHS), for Operation Fly Formula to transport Nestlé infant formula from Switzerland to Louisville, Kentucky on June 16. This delivery will include over 44,000 pounds of Nestlé Health Science Alfamino® and Alfamino® Junior specialty formula, the equivalent of approximately 548,000 8-ounce bottles. The product will be available primarily through a distribution pipeline serving hospitals, home health companies, and WIC programs around the U.S., with additional deliveries of Nestlé formula being announced in the coming days.

Joseph Biden, US President
What is the maximum Social Security retirement benefit I can get?

SOCIAL SECURITY

What is the maximum Social Security retirement benefit I can get?

The Social Security Administration (SSA) oversees the financial support programmes available to millions of Americans. Some receive disability support but the majority receive the retirement benefits. In February 2022 around 65 million people received some form of support from the SSA, of which more than 50 million claimed retirement benefits, 77.1 percent of the total.

Each year, the cost of living adjustment (COLA) adjusts the amount of money recipients of any of the support programmes receive. Usually this is close to the inflation rate during the three months preceding October. There was a 5.9 percent increase in benefits from 2021 to 2022 to reflect the high inflation at the end of 2021.

Read more on the maximum benefit in our full coverage. 

Federal Reserve Chairmen Jerome Powell delivers remarks over historic interest rate increase

The Congressional mandate of the Federal Reserve is to create the conditions for maximum employment (ie. to have the maximum number of people who want a job to have one) and to price stability. 

"Labor market is extremely tight and inflation is far too high," said Powell. 

An increase of .75 percent has been announced and more increases, at a smaller scale are expected in the weeks and months ahead. 

Overall, the economy saw a decrease in economic activity in the first quarter of 2022 as firms suffered from major fluctuations in supply leading to much uncertainty and b businesses began to plan. 

The objectives of the central bank's efforts are to bring down demand so that it is more aligned with supply, which continues to face major structural challenges in ramping up to meet current demand. Global supply chains continue in a fragile state as the covid-19 pandemic and increasing costs of fuel place more strain on the transport and manufacturing sector.  

Fed plans to hike rates by the largest margin since 1994

In an effort to bring down inflation, the US Federal Reserve has announced plans to increase interest rates. Unlike previous plans, this increase will bump rates up by .75 percent, the largest single increase to interest rates since 1994. 

So far markets are responding well to the news which aims to reduce the circulation of money through the economy to cool down prices. 

In response to the news, Federal Reserve Chairmen Jerome Powell said “Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common." This may provide some reassurance to investors who are concerned about their ability to access credit as the central bank works to reduce inflation. 

How much has bitcoin fall in the last week?

Over the last week, the cryptoleader bitcoin has lost around a quarter of its value. One bitcoin is not wortharound $20,600, down from a record high of more than $58,000 in November of last year. 

“Do you think raising the minimum wage to $15 an hour is socialistic? Do you think doing what every major country does – guaranteeing healthcare to all people – is socialistic? Do you think expanding Medicare to cover dental care is socialistic?

Bernie Sanders, US Senator, Vermont

White House may look to address gas prices with windfall tax

One of the major frustrations for President Biden in recent months has been the willingness of oil companies in the US to take advantage of the volatile economic conditions to fatten their profit margins. While inflationary pressures and the sanctions on Russia-produced oil pushed up the price of fuels, a large part of the recent increase is thought to have come from some blatant profiteering on the behalf of some companies. 

To address this, the White House is considering a windfall tax on companies' profits to disincentivise gasoline producers from pumping up the prices further. Senate Finance Chair Ron Wyden has called for a 21% surtax on oil company profits that are deemed excessive. 

“If that involves moving past broadly understood levels of neutral we won’t hesitate to do that... We will go until we feel we’re at a place where we can say financial conditions are in an appropriate place, we see inflation coming down."

Jerome Powell, Federal Reserve Chair

“You’d still have a strong labor market if unemployment were to move up a few ticks... I would say there are a number of plausible paths to have a soft as I said softish landing. Our job isn’t to handicap the odds, it’s to try to achieve that.”

Jerome Powell, Federal Reserve Chair

Fed Reserve expected to raise US' interest rate

The Federal Reserve is holding a meeting today after which it could announce a substantial interest rate hike, in a bid to slow the rampant inflation that is causing havoc for consumers. Fed Chair Jerome Powell has confirmed that the consensus view in the Federal Reserve committee is that another interest rate hike is needed, assuming that economic trends in the United States continue as they are. 

Last month Powell said that the agency would consider drastic steps if inflation remains a problem: “We will go until we feel we’re at a place where we can say financial conditions are in an appropriate place, we see inflation coming down."

Gas prices in US: Are gas prices more expensive in other countries?

US NEWS

Gas prices in US: Are gas prices more expensive in other countries?

Inflationary pressures are pushing up prices for Americans across the board; reducing their buying power and slashing household budgets in real terms. At the forefront of this inflation is the price of energy, which has surged nearly 35 percent since May 2021. The cost of many essential products has risen considerably in the past six months and the ban on Russian oil and gas has seen the price of gasoline rise even higher.

But it's not only in the United States that gasoline has soared to record prices and many countries around the world pay far higher amounts for a gallon of gas...

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Fed expected to announce interest rate hike today

Experts are predicting a significant raise to the interest rate later today when the Federal Reserve announces the next stage of the US' response to high inflation. The central bank has been given a fairly free rein by President Biden but if facing pressure to implement some significant changes to bring down prices for consumers. 

We're expecting the Fed to confirm their interest rate adjustment later today; we'll have all the news and reaction as soon as it's published. 

Food insecurity and hunger have doubled since 2019, according to experts

Latest News

Food insecurity and hunger have doubled since 2019, according to experts

Food security experts have warned of food shortages after the invasion of Ukraine by Russia sent energy-and-food-commodity markets soaring. Russia and Ukraine supply a good portion of global wheat and other food staples, but the cultivation and harvest are being disrupted. At a time when inflation is already high, food shortages could be disastrous for millions of American households. 

The Food and Agriculture Organization estimate that around twenty percent of the Ukraine’s typical winter wheat production will be cut due the war with Russian. The consequences of this supply shortfall “will further reduce the global food supply, with serious implications for Europe, Central Asia and beyond.”

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Fed Reserve expected to announce interest rate hike today

As the FederL reserve struggles to combat the sky-high rate of inflation in the United States, experts are predicting that the US' central bank will introduce significant interest rate hikes today to cool the overheating economy. The rapid post-pandemic recovery brought about under President Biden has seen an unprecendented rate of job market growth, but that has sent prices skywards and cut the purchasing power of consumers in the US. 

This report from AP states: "The central bank is considered likely to raise its benchmark short-term rate by three-quarters of a percentage point, far larger than the typical quarter-point increase, to a range of 1.5% to 1.75%."

Treasury Sec. Janet Yellen suggests that Biden may lift China tariffs

The topic of tariffs has been a crucial one for President Biden so far this year, leaving him to decide between economic stability and a desire not to fund oppositional regimes. Durnig his term in office, former President Trump introduced a raft of tariffs on Chinese-made products in a bid to support the US' domestic manufacturing sector. Speaking last week, Treasury Secretary Janet Yellen confirmed that Biden was considering a review of the tariffs but it has not yet been confirmed if he will be willing to take such a controversial step, particularly ahead of the crucial November midterms. 

At what age can I start receiving Social Security retirement benefits?

SOCIAL SECURITY

At what age can I start receiving Social Security retirement benefits?

Figures from the Social Security Administration (SSA) from February 2022 showed that more than 70.1 million people in the United States are currently in receipt of Social Security support. Of that number, 50.4 million are in receipt of retirement benefits.

It’s the largest federal retirement programme on offer but the entitlement for it can be a little confusing. There is no fixed age when you have to start receiving the monthly payments, but the time when you first claim the support will have a bearing on how much you receive each month. Here's how to work out your potential Social Security entitlement...

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Biden considers removing China trade tariffs

During the Trump presidency a number of trade tariffs on China were introduced to prevent people from buying in China-made products. However with inflation still sky-high there is concern that shortage in the market are pushing up prices for Americans and hampering the nation's economic recovery. Biden is thought to be considering removing some of the tariffs, but it could receive criticism from some who believe Chinese imports could undercut the US economy. 

Look, folks, today I’d like to speak about my top economic priority: fighting inflation.  I understand Americans are anxious, and they’re anxious with good reason.  I was raised in a household when the price of gasoline rose precipitously, it was the discussion at the table.  It made a difference when food prices went up.

But we’ve never seen anything like Putin’s tax on both food and gas. 

Americans should also understand our economy has unique strengths that we can build on.  The job market is the strongest it’s been since World War Two, notwithstanding the inflation.  We added another 390,000 jobs last month; 8,700,000 new jobs since I took office.  An all-time record.  Never that many jobs in that period of time.  (Applause.)

Unemployment rate is near historic lows.  Millions of Americans are moving up to better jobs and better pay.

President Biden, White House remarks

Americans face record high gas prices

It's no secret that the price of gasoline has soared in 2022, fuelled by rampant high inflation and a serious supply chain issue that is preventing producers from keeping up with demand. In recent days the average price of a gallon of gasoline has exceeded $5 for the first time in US history, while some states like California are recording prices above $6. 

To understand how these price rises are affect normal families, and why it could be a key issue in the midterm elections, NBC News follows three families to see how their spending habits have changed. 

What is Celsius Network in the cryptocurrency market and why has it paused withdrawals?

FINANCIAL NEWS

What is Celsius Network in the cryptocurrency market and why has it paused withdrawals?

UK-based cryptocurrency bank Celsius Network halted all withdrawals, transfers and crypto swaps earlier this week. The company blamed “extreme market conditions" for the disruption, but it was just the latest example of a malfunction in the crypto eco-system. 

Celsius has 1.7 million customers and around $3.7 billion in assets but is suffering from a decline in confidence in cryptocurrency which has been seen right across the industry in recent weeks.

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While Americans pay more to fill up their gas tanks, Big Oil companies are raking in record profits, rewarding their CEOs and wealthy shareholders with massive stock buybacks, and using special loopholes in the tax code to pay next to nothing in taxes.

Sen. Ron Wyden, Senate Finance Chair

Inflation hurts Biden politically, polling data shows

Despite positive news in many aspects of the economy, one major problem still persists. It's inflation, and it could bring an ubrupt halt to any Democrat legislative plan for the next two years if it causes defeat in the November 2022 elections.

Consumer prices rose 1 percent in May alone and by 8.6 percent over the past 12 months, according to data released Friday by the Labor Department. While unemployment may be low, inflation is still killing Americans in shops, at fuel stations, and anywhere else they can spend money. 

Hello and welcome to AS USA

We'll bring you all the latest financial news from the United States as President Biden looks to address the high rate of inflation and nation-wide price rises. 

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