USA finance and payments: summary news | 18 June
Headlines: 18 June 2022
- The price of an average gallon of gas in the US dips below $5 for first time in a week.
- 30-year fixed-rate mortgage interest rates hit 5.78%, the highest level since late 2008. When will home loan rates fall?
- Bitcoin price falls below $20,000 for the first time since 2020, registering a 32% fall in the last month - See the rise and fall of crypto
- Fed outlines reasons for 0.75 percentage point hike for interest rates - why have they increased rates?
- Pandemic-era relief measure providing free meals for school students comes to an end
- Fed Chair Powell: We are "focused on returning inflation to our 2 percent objective"
- Elon Musk faces $258bn lawsuits for alleged Dogecoin "pyramid scheme"
- Biden may remove certain trade tariffs on China in a bid to reduces prices for consumers
- Real wages fell 0.6 percent while inflation led to an average price increase of one percent across the market in May
- 'Shrinkflation' reduces product sizes for consumers
Helpful links & Information
- Gas prices in US: which countries have the most expensive gasoline?
- When will President Biden make a decision over student loan forgiveness
- Do I have to pay taxes on Social Security benefits? How much?
Related News from AS USA:
Elon Musk says Dogecoin might be able to be used to buy merch
Tesla CEO Elon Musk, who is being sued for running a “pyramid scheme” by manipulating the price of Dogecoin, took to Twitter on Saturday to express his views on the cryptocurrency again.
In response to a tweet by Dogecoin's co-creator Billy Markus on his desire people actually “use it for something,” Musk posted “Tesla and SpaceX merch, maybe more down the road.”
His musing about the digital coin in the past have sent its value surging including when he would consider accepting it for merchandise once before. It's lost nearly 85 percent of its value since its peak in August last year.
The world’s richest man, Elon Musk, was sued for $258 billion on Thursday after a Dogecoin investor accused him of manipulating the price of the cryptocurrency and running a “pyramid scheme” to boost its value.
Plaintiff Keith Johnson filed the complaint in a federal court in Manhattan, accusing the Tesla CEO of racketeering. Johnson described himself as “an American citizen who was defrauded out of money by defendants’ Dogecoin Crypto Pyramid Scheme.”
Inflation not seen in four decades is taking a bite out of American household finances. None feel this more acutely than those who receive Social Security benefits. The shortfall, however, is not new and has been growing over several decades.
At the same time though, if nothing is done in Congress, Social Security beneficiaries could see their monthly payments cut thirteen years from now. A proposal by Democrats would address the issue for the recipients of Social Security benefits with a $200 monthly boost, while shoring up the program for the next 75 years.
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.
For months the prospect of a gas rebate card has been mooted in Washington to provide financial relief for households struggling to afford the rising cost of motor fuel. Last week the average price of gasoline reached $5 per gallon for the first time in the United States and experts predict it could rise far higher.
So with the high price of gasoline is causing major issues for motorists,will the White House send out pre-paid fuel cards to help struggling Americans?
How can I check my Social Security payment amount?
The Social Security Adminstration (SSA) oversees a number of financial support programs, designed to support unemployed, disabled or vulnerable Americans and their families. The exact amount on offer for each recipient is based on a series of calculations related to their work history, personal situation and, in some cases, degree of disability.
To check how much you could be entitled to receive, as well as carrying out various other functions, log in to your My Social Security online account...
Biden responds to claims the American Rescue Plan sparked inflation
"Zero evidence of [the American Rescue Plan causing high inflation], number one. Number two, we’ve reduced the deficit by $350 billion last year. We reduced the deficit by a trillion, 700 billion this year. We grow the economy. Today, today, we have more people employed than, in a long, long time and we gained another 8.6 million jobs. And guess what? We still have hundreds of thousands of job openings."
Will there be a recession in the United States?
The Federal Reserve made a huge decision this week, opting to raise the benchmark interest rate by 0.75 percentage points in a bid to bring down inflation. However it does bring the risk of the US slipping into a recession, which could be catastrophic as the country continues its post-pandemic economic recovery.
“What we need to see,” Fed Chair Jerome Powell told a press conference on Wednesday, “is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don’t see that, then we’ll have to consider moving more aggressively. If we do see that, then we can consider moving to a slower pace.”
After two summers of covid-induced travel restrictions, Americans are able to travel abroad again this year and millions are expected to head overseas. However most private insurance policies in the United States do no not cover health issues that occur while traveling outside the country.
For that reason, many international travelers opt to purchase an international insurance plan which secures them coverage in the countries they are visiting for a fee. The price offered for the policy will often depend on the person purchasing and the locations that will be traveled.
Is a crypto crash a good thing in the long run?
The cryptocurrency markets are in the duldrums at the moment but they may not be a bad thing in the long run. Speaking to CNBC, venture capitalist Kevin O'Leary explains why he believes this price drop is actually a neccessary adjustment for cryptocurrency markets. The value of many of the most widely-held coins have risen dramatically in the past two years, and this may simply be a chance for them to level out slightly after constant growth.
As time passes, needs can change from where you live, how you get around to what you eat. The healthcare coverage you have is no different. Once a year, during the nine weeks of Open Enrollment for Medicare all those who are signed up can make changes to their plan for healthcare and prescription drugs for the next year.
Here's everything you need to know about applying for the financial support this year...
Bitcoin price slumps after weeks of losses
The price of Bitcoin has fallen below $20,000 for the first time since 2020. The price of BTC, along with a lot of other cryptocurrencies, enjoyed huge increased during the pandemic thanks in part to an influx of new investors and cash flooding in from the US-distributed stimulus checks. Confidence has drained from the crypto markets in recent weeks, exacerbated by a series of crypto failures.
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The Social Security Administration (SSA) oversees the financial support programmes available to millions of Americans, the vast majority of whom receive 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% of the total.
As the American population becomes gradually older, a greater proportion of the country is expected to begin receiving support from the SSA. If you've not yet claimed your first retirement benefits payments, here's how much you could stand to receive from the SSA...
Biden calls out oil companies for price gouging
“Why don’t you tell them what Exxon’s profits were this quarter? Exxon made more money than God this year.”
"The oil companies, they have 9,000 permits to drill. They’re not drilling... Why aren’t they drilling? Cause they make more money not producing more oil — the price goes up.”
“We have been in regular contact with the administration, informing them of our planned investments to increase production and expand refining capacity in the United States."
Fed Reserve points to global factors pushing up inflation in the US
How much control does the United States have to control inflation? The country's central bank, the Federal Reserve, has raised interest rates substantial in a bid to curb economic growth but there is an acceptance that the price increase is caused by factors out of their control.
“I think events of the last few months have raised the degree of difficulty, created great challenges,” Fed Chair Jerome Powell said earlier this week. “And there’s a much bigger chance now that it will depend on factors that we don’t control.”
Gasoline dips slightly, falling below $4.989
The national average price of gasoline is final experiencing a slight decline after months of relentless growth that was pricing out motorists and causing price rises across the board. AAA calculate that the average price on Saturday, 18 June in $4.989, but the actual figure you are paying varies greatly around the country. Californians are still facing prices well above $6 per gallon, due in part to the state's high fuel taxes.
Republican Study Committee pushes for Social Security cuts
The Republican Study Committee (RSC), the largest conservative caucus in the House, released its annual model federal budget proposal. They say it will take 7 years to balance the federal budget. Dubbed the "Blueprint to save America," would cut federal spending by $16.6 trillion.
However those cuts would not include military spending, which would actually be boosted by 5 percent. It also prevents funding to abortion rights groups and includes more than 30 anti-abortion measures. It lists eight bills aimed at barring principles based on “critical race theory”, though this conservative bogeyman has not been proven to exist and is wielded to attack re-evaluations of American history.
Fed Reserve targets inflation drop
The Congressional mandate of the Federal Reserve is to create the conditions for maximum employment, for example to have the maximum number of people who want a job to have one, and 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. What such high interest rates could mean is forced lower spending, potentially putting many jobs at risk. But the Fed will power on in the face of this,
What next for gas prices in the US?
The 4th July is normally a time to celebrate for Americans but it could be a bleak holiday for President Biden, according to pollster and political strategist Frank Luntz. He told CNBC's 'Squawk Box' that the high price of gasoline, groceries and other essentials could come to a head in two weeks time when Americans all across the country begin to celebrate Independence Day.
Millions will be filling up their tanks for long drives to see family and friends. Those who are hosting will be stocking up the cupboards with food for cook-outs and barbecues. There is also an uptick in spending habits at this time more generally. If that all happens as usual this year the demand will increase substantially and prices will likely do the same.
Fed Reserve wants stable inflation rate
“The Federal Reserve’s strong commitment to our price stability mandate contributes to the widespread confidence in the dollar as a store of value. To that end, my colleagues and I are acutely focused on returning inflation to our 2 percent objective."
“Meeting our dual mandate also depends on maintaining financial stability... The Fed’s commitment to both our dual mandate and financial stability encourages the international community to hold and use dollars."
On Wednesday the Federal Reserve announced that it was enacting an interest rate hike worth three-quarters of a percentage point. This was the largest single increase since 1994 and comes at a time when the rate of inflation in the United States is spiralling out of control at 8.3% year-on-year.
But how will this help? And what are the risks associated with using such a blunt tool on an American economy that is still in the process of returning to pre-pandemic conditions? We take a look...
How is the White House tackling inflation in the US?
Today AAA has calculated that the average cost of a gallon of gasoline in the United States sits at exactly $5. THat is a slight dip on the peak recorded earlier this week but remains extremely high and poses a major headache for Americans at a time when prices are rising across the board.
This threatens to become even more of a problem in two weeks' time when millions of Americans are expected to engage in long motor journeys to visit friends and family for Fourth of July celebrations. The White House is under pressure to provide real relief for motorists ahead of the holiday.
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