Headlines | Thursday, 29 June 2023
– Supreme Court ruling on student debt cancellation due on Friday
– The weekly average mortgage rate ticked up this week to 6.71% for 30-yr FRM
– Initial unemployment claims dropped last week to 239,000, a decrease of 26,000 from a week prior
– Thursday 29 June is the last day victims of Walmart gift card scamcan claim compensation
– Fed Chair Powell doesn’t discount two consecutive rate hikes in future
– US consumer confidence jumps to highest level since January 2022
– Biden announces $42 billion investment in broadband for all by 2030
– Dates for Social Security payments in July
How to alleviate your student loan debt if the Supreme Court overturns Biden’s forgiveness plan
Student-loan borrowers can take advantage of Public Service Loan Forgiveness (PSLF) programme. This programme forgives the remaining balance on your federal Direct Loans after you have made 120 qualifying payments while working full-time for a qualifying employer in public service or non-profit organisations. This provides the possibility for a borrower to have their debt cancelled in 10 to 20 years, respectively.
There are other options available though none on the scale of debt cancellation.
When will the federal student loan payments resume? Here’s how to get ready
President Joe Biden is still trying to get one of his flagship election policies put into law: student debt cancellation. Originally, student debt was to be cancelled, all $1.7 trillion of it. Then it was watered down to $20,000 per student, but now it could be reduced to nothing. The ruling from the Supreme Court will be released on Friday to determine its legality.
Something that will be intentionally ending around the same time is the student loan payment moratorium. Since the covid-19 pandemic students have not had interest accrue on their student debt but this is soon to change. It is due to end soon.
House prices contineu to drop
In recent months, mortgage rates have risen to their highest level in 20 years, causing a slowdown in buying activity. Where is the housing market headed in 2023? Bankrate questioned several real estate experts to come up with a five-year forecast for the real estate market.
According to Lawrence Yun, chief economist at the National Association of Realtors, mortgage interest rates could continue to rise. According to Yun’s forecasts, 7% could be the level of mortgage rates for the rest of this year and most of 2024. Within two years, he forecasts the rate should return to 5.5 or 6%.
Home prices in the US declined for the first time in 11 years (as higher mortgage rates made home purchases more expensive for buyers).
The decline in home prices is a sign that the housing market is cooling off after a period of rapid growth.
Although house-buying… pic.twitter.com/4k1SOq5RTy
— Andrew Lokenauth (@FluentInFinance) June 28, 2023
Can your credit score affect your monthly mortgage payment?
When you apply for a mortgage loan, lenders use your credit score as one of the factors to assess your creditworthiness and determine the interest rate they will offer you.
A higher credit score indicates that you have a good credit history and are more likely to repay your debts on time. As a result, lenders view borrowers with higher credit scores as less risky, and they may offer them lower interest rates on their loans.
Clearly, if you have a lower credit score, lenders will consider you to be a higher risk borrower and will offer you a higher interest rate on your mortgage loan.
How to alleviate your student loan debt if the Supreme Court overturns Biden’s forgiveness plan
Student loan debt has been ballooning over the past few decades with a collective total of almost $1.76 trillion currently. A survey in 2021, showed that 60 percent of millennials that don’t own a home, are being held back from doing so because of their student loan debt.
The long-awaited ruling by the Supreme Court to decide its legality is due to arrive on Friday morning. That has left many borrowers wondering what they can do to alleviate their student loan debt burden if the high court deems the program unconstitutional.
SNAP: Who will first receive payments of up to $4,223 in July 2023?
Thanks to the distribution of SNAP coupons, these people could receive up to $4,223 in July 2023.
SNAP: These states start distributing payments on July 1
The US has dozens of financial aid programs for low-income populations. Among them is the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps.
The distribution schedule of SNAP coupons depends on the administration of each state. These are the areas that start giving out payments on July 1.
Direct payments of $914 from Social Security on June 30: who will receive it?
The Social Security Administration continues to mail payments for the month of June. Here are the beneficiaries who can expect to receive $914 on June 30.
Initial unemployment claims drop by 26,000 to 239,000
The US Department of Labor released unemployment insurance data for the week ending 24 June. First-time out-of-work benefit claims dropped to 239,000 from the previous reports upwardly revised 264,000. The 4-week moving average was 257,500, an increase of 1,500.
Unemployment Insurance Weekly Claims
Initial claims were 239,000 for the week ending 6/24 (-26,000).
Insured unemployment was 1,742,000 for the week ending 6/17 (-19,000).https://t.co/ys7Eg5LKAW
— U.S. Department of Labor (@USDOL) June 29, 2023
Powell says Fed is “a long way” from loosening interest rate policy
Powell: “steadily, and this is core inflation. Headline inflation is coming down now with lower than core, but core inflation and I don’t see us getting to 2% this year or next year, I see us getting there the year after.”
Moderator: “2025? Core inflation 2%? So you’re going to be restrictive for a long time?”
Powell:“No, I mean, well, we’ll be as restrictive as we need to be. But, umm, you know if you’re, if rates, if inflation is coming down sharply, and we’re confident that it’s on a path to2%, you know that would be a different situation. You would begin to think about loosening policy but we’re a long way from that, that’s not something we’re thinking about now, or in the near future.”
Fed Chair Jerome Powell, Speaking at the ECB Forum on Central Banking in Sintra, Portugal
Powell: “I wouldn’t take moving at two consecutive meetings off the table”
Stock markets have been experiencing a rally, especially after the Fed’s meeting in June where policymakers choose not to raise interest rates yet again. Since March 2022, the US central bank has raised the federal funds rate from basically zero to five percent over ten consecutive hikes. Chair Jerome Powell speaking at the ECB Forum on Central Banking in Sintra, Portugal was taunted by the moderator about the language used to describe the “pause” that wasn’t a pause, nor a skip.
“You paused, but you’re not calling it a pause. And you’re not calling it a skip – So, what are we calling it?” the moderator asked.
“What we’re calling it is maintaining the level of the federal funds rate at its current level for this meeting,” Powell responded to laughter.
“If you think about it we’ve raised the federal funds rates by 500 basis points since a little more than a year ago. So, we’ve come a long way. We also think there is more tightening power coming through. Really, the policy hasn’t been in place or restrictive for very long,” the Fed Chair added. “We started it at negative real interest rates and we’ve now moved up to where we actually are in restrictive territory. But we haven’t been there very long. So, we believe there is more restriction coming.”
Powell explained that the labor market is the main driver behind the need to keep rates restrictive. “We’ve got a labor market that where jobs are being created, there’s strong wage gains, and that’s driving spending, real incomes and spending which is driving more demand and continuing to drive the labor market,” said the Fed Chair. “So, the labor market is really pulling the economy.”
— CNBC (@CNBC) June 28, 2023
Powell sees “better balance without a really severe downturn”
Federal Reserve Chair Jerome Powell spoke at the ECB Forum on Central Banking in Sintra, Portugal on Wednesday where he shared his views on the US economy and the Fed’s interest rate policy. The head of the Fed said that some softening of the labor market is starting to be seen although it has been coming slower than needed. He also expressed optimism that the US economy could pull off a relatively soft landing.
“In my view, the least unlikely case is that we do find our way to better balance without a really severe downturn. I think it’s a significant probability that there will be a downturn as well, though. But it’s not, to me, the most likely case,” Powell said.
.@federalreserve Chair Powell: There's a significant probability that there will be a downturn as well though, but isn't up to me the most likely case.@SaraEisen: That's the hard landing scenario?
Powell: I wasn't even thinking of hard landing. I was thinking of even recession. pic.twitter.com/3NaHX5kVdf
— Squawk on the Street (@SquawkStreet) June 28, 2023
Social Security checks in July 2023: Dates and amounts
Every month, the Social Security Administration (SSA) issues millions of payments to Social Security recipients, most of which are retired workers.
The data provided by the SSA from May will give insights into how much beneficiaries can expect to receive next month. In May, the SSA sent Social Security checks to 66 million people, of which 74 percent were retired workers. The average check was worth 1,836.06, with the maximum benefit amount for this year being $4,555.
Read our full coverage for details on the July payment schedule.
US consumer confidence outperforms expectations
Americans are feeling upbeat about the US economy as shown by the latest Conference Board’s Consumer Confidence data released on Tuesday. Estimates had predicted an uptick from the previous month’s reading of 102.5 but June blew past expectations by nearly six points coming in at 109.7.
The optimism is in part due to the resilience of the US economy despite rising prices, which hasn’t deterred consumers from spending. That has kept businesses hiring leading more Americans, 46.8%, to view jobs as plentiful up from 43.3% of those surveyed in May. While there are signs that a recession could be coming, fewer respondents expressed such sentiment dropping to 69.3% from 73.2% saying an economic downturn was “somewhat” or “very” likely.
JPMORGAN: “Today’s data highlights US resilience with .. further signs of a rebound in the housing market. The Conference Board’s consumer confidence survey outperformed .. expectations by climbing to .. a 17-month high.” 👀 pic.twitter.com/leQjfnd7M5
— Carl Quintanilla (@carlquintanilla) June 27, 2023
Walmart will pay 4 million dollars as compensation to customers: who will receive it and how to request it?
The US Department of Justice has rewarded nearly $4 million as compensation to victims of a Walmart gift card scam.
According to Top Class Actions, the Walmart gift card scams allegedly began in 2015 when scammers instructed victims to purchase Walmart gift cards ranging from $500 to $1,000.
Between 2016 and 2017, Walmart froze balances on gift cards suspected of being part of the fraudulent scheme. Subsequently, the Department of Justice sought this frozen money so it could reimburse customers.
The Department of Justice filed a lawsuit for the forfeiture of the $4 million in gift card balances frozen by Walmart. This money will be available as compensation payments to affected customers.
Thursday 29 June is the deadline to file a claim and receive compensation.
Why doesn’t Costco allow members to share cards? How much does membership cost?
Following the footsteps of Netflix, Costco is implementing measures to prevent users from sharing memberships.
Although company policy states that client memberships are unique and non-transferable, not all beneficiaries follow this rule to the letter. Many tend to share their memberships either with family, friends or acquaintances.
A company spokesperson told CBS News that this practice increased after the implementation and expansion of self-service checkouts, which is why the company has chosen to take action on the matter.
Here are the changes.
Food inflation has definitely started to slow down, and this is good news for consumers. However, it still won’t be cheaper to celebrate the Fourth of July this year. The reason stems from the current pricing for some of the key menu ingredients.
Dr. Michael Swanson, Wells Fargo Chief Agricultural Economist
Inflation: Will this year’s 4th of July cookout be cheaper or more expensive than last year?
Independence Day is one of the most important federal holidays on the calendar. Families and friends gather to celebrate the tossing off of English shadows as we approach the 250th anniversary of the nation
If the US economy is operating how the Federal Reserve wants then the price of Independence Day cookout will increase every year. What will soon be the first seven months of 2023 is no different; inflation will increase the prices of your barbecue. However, prices have increased more than the Fed wants.
What to know while we wait for the Supreme Court decision on student loan forgiveness
Millions of student debt holders are anxiously awaiting the decision of the US Supreme Court to uphold or declare unconstitutional President Biden’s executive order to cancel up to $20,000 in student loans.
A decision is thought to be very near and could be announced in the next week.
Hello and welcome to AS USA’s live blog covering financial news
The May Personal Consumption Expenditure Price Index (PCE) will be released tomorrow. This inflation measure is the preferred data for the Federal Reserve on how prices are rising. Speaking at the ECB Forum on Central Banking in Sintra, Portugal, Chair Jerome Powell said he doesn’t see inflation reaching target until 2025.
While the US central bank held off raising rates when they met this month, Powell has made it clear that rates are expected to rise further before the year is out. He told the ECB Forum that he doesn’t discount two back-to-back rate hikes. The Federal Open Market Committee is due to meet again in July.
Consumer confidence jumped in June to its highest level since January 2022. Despite an uptick in initial unemployment claims reported last week, rising to 264,000, more Americans feel that jobs are plentiful. New data for the week ending 17 June is due out today.
There are some warning signs of a recession, but the labor market has remained strong and incredibly tight, aided by consumers continuing to spend despite the rising cost of living.