Money
Is Joe Biden hiding the recession?
The US President and his administration are being accused of hiding what many are calling a recession
According to government reports Inflation in the US is at a 40 year high standing at an incredible 9.1%
And on top of that, the US economy shrank at 0.9% in April.
For some, the government doesn’t want to admit a recession- coming up to the midterm elections.
According to recent polls, Inflation is one of the major concerns for many American voters.
And most economists argue that the high inflation is being driven by Covid 19.
In early 2020, nationwide lockdowns meant millions lost their jobs.
The former US President Donald Trump inserted 2 trillion dollars into the economy to keep businesses afloat.
It was the first of three stimulus packages, which have now totalled five trillion dollars being pumped directly into the economy.
The main sectors driving up high prices are Gas, Food and Housing.
And grocery prices have risen more than 12% over the last year.
That’s the highest its ever been since 1979.
It’s anyones guess when inflation will go down.
But the Federal Reserve, led by Jerome Powell has responded to the high inflation by raising interest rates twice this year.
The Fed’s control of interest rates is perhaps the best tool to help curb inflation.
As for whether we can call it a recession.
I’ll leave that call to you.
Money
Fed cuts rates, signals more potentially ahead
Fed lowers rates amid job market concerns, signalling potential further cuts in upcoming meetings
Fed lowers rates amid job market concerns, signalling potential further cuts in upcoming meetings
– The Federal Reserve cut interest rates by a quarter-point to address job market concerns.
– Officials expect at least two additional rate cuts by year-end amid ongoing economic uncertainties.
Fed Chair Jerome Powell noted a significant shift in the labour market, highlighting “downside risk” in his statements.
The recent rate cut, supported by 11 of 12 Fed voters, aims to recalibrate an economy facing uncertainties from policy changes and market pressures.
Policy Dynamics
The decision comes amid intense political scrutiny, with President Trump openly criticising Powell’s reluctance to lower rates.
Despite the controversy, Powell asserts that political pressures do not influence Fed operations.
The current benchmark federal-funds rate now sits between 4% and 4.25%, the lowest since 2021, providing some reprieve to consumers and small businesses. Economic forecasts indicate ongoing complexities, including inflation trends and the impact of tariffs on labour dynamics, complicating future policy decisions.
Money
Fed faces unusual dissent amid leadership uncertainty
Fed’s Powell navigates contentious meeting amid Trump-appointed dissenters as rate cut looms and succession contest heats up
Fed’s Powell navigates contentious meeting amid Trump-appointed dissenters as rate cut looms and succession contest heats up
– This week’s Federal Reserve meeting faces unusual dissent as Chair Powell approaches his term’s end.
– Analysts predict dissent over expected rate cuts due to political pressures from Trump-appointed officials.
The situation is further complicated by the recent swearing-in of Trump adviser Stephen Miran to the Fed’s board, following a Senate confirmation.
Analysts believe Powell may encounter dissent on an expected quarter-percentage-point rate cut from both Trump-appointed officials and regional Fed presidents concerned about inflation.
Potential Dissent
Trump has urged significant rate cuts and for the board to challenge Powell’s decisions.
Some analysts predict dissenting votes from Miran and other Trump appointees in favour of larger cuts. Federal Reserve veterans express concerns that political motivations may undermine the institution’s integrity, with indications that greater dissent could become commonplace.
Money
RBA plans to ban credit card surcharges in Australia
Reserve Bank of Australia plans to ban credit card surcharges despite banks warning of potential higher fees and weaker rewards
Reserve Bank of Australia plans to ban credit card surcharges despite banks warning of potential higher fees and weaker rewards.
– The RBA plans to ban surcharges on debit and credit card transactions, supported by consumer group Choice.
– Major banks oppose the ban, warning it could lead to higher card fees and reduced rewards for credit card users.
The Reserve Bank of Australia (RBA) intends to implement a ban on surcharges associated with debit and credit card transactions. Consumer advocacy group Choice endorses this initiative, arguing that it is unjust for users of low-cost debit cards to incur similar fees as credit card holders.
The major banks, however, are opposing this reform. They caution that the removal of surcharges could prompt customers to abandon credit cards due to diminished rewards.
A final decision by the RBA is anticipated by December 2025.
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