Home sales fall off a cliff as rising interest rates, stubborn inflation and low housing construction weigh on the market. We’ll also explore ways to prepare for a recession and hopes for a bipartisan cannabis breakthrough.
📄 But firstfind out why President Biden and the National Archives are being sued over records of JFK’s assassination.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill we are Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forwarded this newsletter to you? Subscribe here.
The US saw a record drop in home sales in September
Home sales fell the most in September, according to a new report, as mortgage rates soared, crowding out potential buyers from the once-hot housing market.
A report by real estate firm Redfin shows that home sales are down 25 percent in the past month and new listings are down 22 percent, the biggest declines in both categories on record — excluding figures at the start of the coronavirus outbreak. Pandemic in April and May 2020.
The Hills Adam Barnes has the details here.
The decline is due to higher mortgage rates and a slowing economy. Several new data released on Wednesday show how much the Federal Reserve’s rate hikes have transformed the housing market:
LEAD THE DAY
Here’s how to prepare for a possible recession in 2023
Many market watchers are predicting a recession in 2023 as the Fed continues to hike rates to fight 40 years of high inflation.
With a persistently hot job market, a recession is no certainty, but the economy has already contracted for two consecutive quarters and a period of deceleration after the rapid recovery from pandemic shutdowns is only logical, some analysts say.
Here are some ways to become financially fit for a recession:
- Take advantage of a red-hot job market while it lasts: At least one economic forecaster has put the probability of a recession within the next 12 months at 100 percent, but there is little consensus on when or if a recession will strike. A major driver of this uncertainty is the labor market, which has high demand for labour, implying continued economic growth.
- Keep an eye on the housing market: In the US, the housing market is another major driver of inflation as rents and mortgage rates soar amid a nationwide housing shortage that includes millions of homes, according to various studies and commercial estimates.
- Adjust personal finances: As the Fed raises interest rates, paying for goods and services with finance becomes more expensive. As a result, experts say putting off major purchases and paying down debt is a good way to save money now as interest rates rise to 4.6 percent by 2023, according to the Fed’s latest median estimate.
The Hill’s Tobias Burns has more tips here.
Biden order gives momentum to bipartisan marijuana law
President Biden’s move to reassess the legal status of marijuana and pardon state weed convictions has reignited momentum for congressional action to boost the ailing cannabis industry.
Lawmakers see the lame duck session as their best chance yet to pass the SAFE Banking Act, a bipartisan measure that would give cannabis companies easier access to banking services and credit.
- Rep. Ed Perlmutter (D-Colo.), who first introduced the law in 2019, told The Hill this week that there was “a lot of activity” surrounding the legislation, which he says some senators have dubbed “SAFE Banking Plus.” . amid ongoing negotiations.
- The bill – which would be a boon for cash-only pharmacies plagued by robberies and exorbitant bank fees – has already passed through the house six times in recent years. But it’s stalled in the Senate over concerns from leading Democrats who said it’s not doing enough to support communities disproportionately harmed by the country’s drug laws.
Karl and Aris go into more detail here.
The Supreme Court urged to stop Biden’s student loan forgiveness plan
A group of Wisconsin taxpayers on Wednesday asked the Supreme Court to block the Biden administration’s student loan forgiveness program pending an appeal in a lower court.
The emergency application, which was filed with Judge Amy Coney Barrett, who handles emergency affairs from Wisconsin, comes shortly after the administration began accepting applications for the program.
- The challenger, the Brown County Taxpayers Association, asked the court to rule that the president’s statewide debt relief plan illegally interfered with the exclusive purchasing power of Congress.
- In their filing, filed Wednesday, the challengers asked the Supreme Court to determine that despite clear approval from Congress, Biden’s debt-forgiveness policy would have major political and economic ramifications — a violation of what the court last term called the “doctrine.” of the big questions”.
The Hill’s John Kruzel breaks it down here.
Good to know
The IRS on Tuesday announced rule adjustments to account for inflation
Tax year 2023, including shifts for tax brackets and the standard deduction.
The IRS releases inflation adjustments annually, but this year’s announcement comes amid heightened economic concerns about high inflation and a possible recession.
We still have the following in mind:
- The Treasury Department on Wednesday sanctioned a Russian citizen and two of his companies for allegedly transferring sensitive US-based military technology to Russia.
- A political advocacy group formed Wednesday to support President Biden’s agenda published an ad promoting the government’s student loan assistance program.
- Spokeswoman Nancy Pelosi (D-Calif.) said in a new interview that Democrats need a better message on inflation, which voters care about ahead of next month’s midterm elections.
That’s it for today. Thank you for reading. Visit The Hill’s finance page for the latest news and reports. we will see you tomorrow