Rising interest rates have damaged housing affordability, and mortgage demand has fallen to the lowest level since 1995. Many homeowners are reluctant to sell their homes in the current environment, further restricting available housing. “Homebuying activity continues to pull back given reduced purchasing power from...
Over the course of 2023, volatility in the stock market has been credited to high interest rates and overvalued stocks. Based on technical signals and evaluation, analysts are predicting that more turmoil could be on the way. “Equity risk premium is near its worst ever level going back to 1927. In the 6 instances...
The U.S. federal debt reached a record high of $33 trillion in September 2023 and is growing rapidly. In conjunction with rising debt, rising interest rates make U.S. debt payments more costly for the government. “High and rising national debt will mean that more of the budget will go towards servicing that debt with...
After a series of bank closures earlier this year, regulators have placed more scrutiny on banks. In response to concerns surrounding stability in the banking sector, the FDIC has proposed new rules related to larger banks’ “living wills” and holdings of long-term debt. “If we had any doubts about the challenges in...
Inflation, as measured by the Consumer Price Index, was 3.7% higher on an annual basis in August, reversing a trend of falling inflation figures. According to Bloomberg, persistently elevated inflation has caused household incomes to fall by the largest margin since 2010. “This was bad news for Americans who feel...
Facing pressures from high interest rates, mortgage applications have plummeted to their lowest level since 1996. Homeowners who bought homes with low mortgage rates are reluctant to sell in a world where mortgages are now high, resulting in a limited supply of available homes. “Mortgage applications declined to the...
At the end of its fifteenth annual conference, the BRICS coalition of nations (Brazil, Russia, India, China, and South Africa) announced that six more countries will join the economic bloc. Members of BRICS have recently taken steps toward moving away from the dollar, and the addition of oil-producing nations like...
Typically, the FDIC only protects up to $250,000 in banking deposits, leaving the rest potentially more vulnerable to loss. After a wave of bank failures earlier this year, the FDIC was forced to step in and protect millions more in deposits. These extraordinary actions have forced regulators examine potential...
One week after Moody’s downgraded the credit ranking of several banks, an analyst from another firm, Fitch Ratings, warned that Fitch may also be forced to downgrade the rankings of many U.S. banks, including JPMorgan Chase, one of the largest financial institutions in the world. Ongoing concerns in the banking...
On August 8, 2023, credit rating firm Moody’s Investors Service downgraded the credit ratings of multiple banks and placed many others “under review.” These downgrades followed a slew of bank closures earlier in 2023 and reflect a sense of caution surrounding the banking system. “The collapse of Silicon Valley Bank...
On August 1, 2023, Fitch Ratings downgraded the U.S. government’s credit rating from AAA to AA+, citing an “erosion of governance.” Pointing to growing federal debt as well as frequent political squabbles regarding our nation’s debt ceiling, Fitch’s downgrade is the first of its kind since Standard & Poor’s...
The fallout from this spring’s deposit crisis is still affecting banks, with many issues surrounding deposits remaining unresolved. Recently, two banks—California’s PacWest Bank and Kansas’s Heartland Tri-State Bank—both shut their doors. Banking insiders say more turmoil could unfold for regional banks. “Regional...
