Finance, Currency, Debt, National Budgets & Interest Rates Archives

22May

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Types of News: Brief, United States

House Passes Massive Budget Bill

Big, Beautiful Bill Would Add $3.8 Trillion to the $36.9 Trillion U.S. Debt The House passed a significant budget bill in the wee hours of the morning that would add $3.8 trillion to the U.S. debt of $36.89 trillion. The chamber voted 217-212 on final passage at 2:30 a.m. "The House has passed generational, truly nation-shaping legislation," House Speaker Mike Johnson said. Trump’s party, the Republicans, control both chambers of Congress. They have a 220-212 majority in the lower chamber. Next, the Senate will take up the measure. It is divided on a 53-47 margin. 'Big and Beautiful' Basics Called “The Big, Beautiful Bill,” H.R. 1 is 1,100 pages long. A summary of it is available through Congress.gov here. For details to changes to federal spending, see the CBO. On ...

United States: The Big, Beautiful Bond Drop

21May

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief, United States

United States: The Big, Beautiful Bond Drop

Trump Budget Plan Prompts Rating Drop And Loss of Confidence in Treasuries May 21, 2025—The bond markets for long-term U.S. Treasuries spoke clearly on Wednesday, and it wasn’t pretty. The 30-year Treasury yield rose to 5.096 percent as bond dealers sold off U.S. long-term debt holdings. The bond markets underpin a country's economic stability. Volatility in government bonds can impact politics, as it did in the United Kingdom under the short-term leadership stint of Liz Truss. Now, President Trump is testing the limits as he pushes forward a multitrillion-dollar budget plan for the next 10 years. Trump and House Republicans call it the tax cut and budget plan the “big, beautiful bill,” but today, the bond markets signaled their displeasure. Furthermore, the Financial Times warned...

U.S. Massive Deficits Pose ‘Significant Risk’ for the Global Economy

19Apr

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Global Economics, Types of News: Brief

U.S. Massive Deficits Pose ‘Significant Risk’ for the Global Economy

IMF Warns the United States and China about Massive Deficits April 19, 2024--Even though consumer prices are coming down, high interest rates due to U.S. and China's deficits pose significant costs to other countries and carry a risk to global financial stability, the International Monetary Fund warned this week. "Loose fiscal policy in the United States exerts upward pressure on global interest rates and the dollar. It pushes up funding costs in the rest of the world, thereby exacerbating existing fragilities and risks," said Vitor Gaspar, IMF director of fiscal affairs. Rising Debt Poses Costs By the end of the decade, global debt is likely to reach 99 percent of global GDP. The rising debt levels are increasing "volatility in the United States, raising risks elsewhere thr...

22Sep

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Finance, Currency, Debt, National Budgets & Interest Rates

Fed Keeps Rate At 5.25

Fed Chair Says Consumer Credit Market Is Normal September 22, 2023—The Federal Reserve kept its main rate, the Federal Funds Rate, unchanged on Wednesday at 5.25 percent. Fed Chair Jerome Powell said there was unanimous support among board members for keeping rates steady. He predicted one more rate hike before the end of the year then declining rates beginning next year. "Now we're fairly close, we think, to where we need to get. It's just a question of reaching theright stance," he said at a press conference on Wednesday. Specifically, Powell estimated the federal funds rate would reach 5.6 percent by the end of the year, come down to 5.1 percent in 2024, then further decline to 3.9 percent in 2025. The rate impacts mortgages, consumer credit as well as interest the governm...

13Sep

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Finance, Currency, Debt, National Budgets & Interest Rates

U.S. Inflation Inches Up To 3.7 Percent

September 13, 2023—Consumer prices in the United States increased to an annual rate of 3.7 percent in August, up from 3.2 percent in July. Driving the CPI index higher was a spike in energy costs. Gasoline prices spiked by 10.5 percent from July to August while the cost of other fuels rose by 9.1 percent. Even so, energy prices decreased over the last year by 3.6 percent over the previous year. Meanwhile, food prices rose by only 0.2 percent in August and 4.3 percent over the past 12 months. The cost of used cars and trucks dipped while new vehicles cost slightly more. Observers expect the U.S. Federal Reserve to leave interest rates as they are when board members meet September 19-20. For specifics, see the Bureau of Labor Statistics release.

5 Takeaways From Fed Chair Powell’s Jackson Hole Speech

25Aug

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Types of News: Brief

5 Takeaways From Fed Chair Powell’s Jackson Hole Speech

August 25, 2023—Federal Reserve Chair Jerome Powell delivered a carefully worded speech this morning to the annual economic symposium in Jackson Hole, Wyoming. The Kansas City Federal Reserve hosts the event. Moran, Wyoming, US, on Wednesday, Aug. 23, 2023. Photographer: David Paul Morris/Bloomberg Here are the key takeaways from the highly anticipated speech: 1. 3 Percent Is Not The New 2 Percent With the annual inflation rate in the United States down to 3.2 percent, some observers have wondered if that lower rate would suffice. Powell made clear it does not. The target is still 2 percent, and the central bank will not end a restrictive financial policy until the rate reaches that. "It is the Fed's job to bring inflation down to our 2 percent goal, and we will do so," Po...

US Fed Raises Funds Rate By Quarter Basis Point

26Jul

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Finance, Currency, Debt, National Budgets & Interest Rates

US Fed Raises Funds Rate By Quarter Basis Point

July 26, 2023—Citing ongoing concerns about elevated inflation, the U.S. Federal Reserve announced today it is raising its Federal Funds rate by a quarter of a basis point to 5.25 to 5.50 percent. Fed Chair Jerome Powell said the economy is weathering the monetary-policy tightening well, and the Federal Reserve is committed to achieving its target of 2 percent inflation. The current U.S. inflation rate is hovering right around 3 percent. The key to whether the Fed's Board of Governors would begin cutting rates, Powell said, would be when inflation comes down in a credible fashion, not when the rate hits 2 percent. He doesn't see the inflation rate dipping down to its 2 percent target until 2025 or thereafter, Powell said during the press conference.

Currency Wars: Dollar Dominance Here To Stay? Maybe. Maybe Not.

16May

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Geopolitics, Globalization, Disintegration, Nationalism, Populism, Types of News: Brief

Currency Wars: Dollar Dominance Here To Stay? Maybe. Maybe Not.

China, India, and Others Vie For Status The United States has a significant economic advantage in having the U.S. dollar serve as the dominant form of global exchange. But several global leaders want to change that. China and Russia have long plotted to bring the dollar down. China wants its yuan to take over as the global currency leader. It's convincing trading partners like Argentina and Brazil to dump the dollar as a means for making trade and instead use the yuan. As Washington Post reporters Meaghan Tobin, Lyric Li, and David Feliba explained in an article today, Argentina's economy is in crisis, and its holdings of U.S. dollars are running thin. As a result, the government agreed last month to pay for $1 billion worth of Chinese imports with yuan. A New BRICS Currency ...

U.S.: Another Debt Limit Debacle Looms Large

2May

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Types of News: Brief, United States

U.S.: Another Debt Limit Debacle Looms Large

May 2, 2023—U.S. Treasury Secretary Janet Yellen warned congressional leaders on Monday the federal government might have trouble paying its bills beginning in early June if Congress can't come together on terms for increasing the debt limit. The U.S. government breached the $31.381 trillion limit on amassing debt in January. Ever since the federal government has been resorting to extraordinary measures to get by. As of April 28, the U.S. federal debt stood at $31.45 trillion. State And Local Governments First To Feel The Pinch In a letter to Congress on May 1 Yellen said state and local governments are the first to feel the pinch. Today, Treasury stopped issuing securities known as State and Local Government Series (SLGS) that help states and local governments comply with tax reg...

United States: Inflation Moderates In March

12Apr

By Patti MohrNo Comments

Finance, Currency, Debt, National Budgets & Interest Rates, Global Economics

United States: Inflation Moderates In March

Housing Prices Rise While Energy Costs Fall April 12, 2023—Consumer prices still rose in March in the United States, yet they rose less than they have in previous months. The Consumer Price Index for all items increased by 0.1 percent for the month, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Over the past year, prices as a whole increased by 5 percent—the smallest spike since May 2021. The category for shelter, specifically rent and housing prices, increased the most. It rose by 0.6 percent in March and 8.2 percent in the past year. Meanwhile, the cost of energy commodities and services started coming down by 4.6 percent and 2.3 percent, respectively, in March.