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Personal finance weekly news roundup March 25, 2023

news roundup march 25

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Credit Sesame’s personal finance weekly news roundup March 25, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.

  1. Fed makes a mild rate hike in the shadow of bank concerns
  2. Treasury Secretary clarifies stance on FDIC insurance
  3. Home sales break 12-month losing streak
  4. Dip in mortgage rates sparks increase in applications
  5. CFPB plans to provide consumers with more credit card info
  6. SEC preparing enforcement action against Coinbase
  7. Job openings starting to decline
  8. Mortgage loan performance remains stable
  9. Mortgage rates slide for second consecutive week

1. Fed makes a mild rate hike in the shadow of bank concerns

On March 22, the Federal Open Market Committee (FOMC) announced that it was raising short-term interest rates by 0.25%. This puts the FOMC’s target range for rates at 4.75% to 5.00%. For a while, it had been widely expected that the FOMC would raise rates by 0.50%, but recent banking troubles may have prompted the Fed to take a lighter touch. The Fed also updated its economic projections, which showed a consensus among FOMC members that rates would end this year at 5.10%. Those projections showed slightly weaker growth and stronger inflation expectations for the remainder of this year. See Fed statement at FederalReserve.gov

2. Treasury Secretary clarifies stance on FDIC insurance

Federal regulators took the banking community by surprise when they announced an expansion of FDIC deposit insurance to cover losses at Silicon Valley Bank and Signature Bank. In an effort to reassure depositors, regulators pledged to cover even those deposits that were above the $250,000 insurance limit. However, in testimony to the Senate Finance Committee, Treasury Secretary Janet Yellen said that this coverage expansion would not become a precedent. She stated that the extended coverage would only be provided in cases where a bank’s failure would pose a systemic risk to the banking sector and the economy. This adds an element of uncertainty concerning the scope of FDIC coverage. See story at CNBC.com

3. Home sales break 12-month losing streak

The pace of existing home sales increased by 14.5% in February. This marked the first increase after 12 straight months of decreasing home sales. February’s increase was the largest monthly increase since July of 2020. Despite the good news, the sustained weakness in the housing market previously means that home sales are still 22.6% below their pace of a year ago. Also, the median existing home price has decreased slightly over the past year. See news release from NAR.com

4. Dip in mortgage rates sparks increase in applications

Homebuyers took advantage of a slight easing in mortgage rates to step up the pace of mortgage applications. The seasonally-adjusted rate of mortgage applications increased by 0.2% last week, though it is still more than a third below where it was a year previously. See the latest on mortgage applications at MBA.org.

5. CFPB plans to provide consumers with more credit card info

The Consumer Financial Protection Bureau (CFPB) announced plans to expand the information it provides to consumers on credit card terms. The CFPB compiles information on credit card terms being offered by the 25 largest credit card issuers, as well as a sample of 125 other cards. The CFPB now plans to provide consumers with additional details that will help them shop for the best credit cards for their needs. For example, in addition to issuers automatically included in the survey, the CFPB will allow other issuers to voluntarily submit info, in the hopes this will attract participation by the most competitive credit cards. The expanded survey will also include information on how rates for each card vary by credit tier, as well as info on rates for balance transfers, cash advances and introductory promotions. See CFPB release at ConsumerFinance.gov

6. SEC preparing enforcement action against Coinbase

Cryptocurrency exchange operator Coinbase disclosed that it had received a Wells notice from the SEC. A Wells notice is a description of preliminary findings of illegal activity that gives the recipient 30 days to respond before enforcement action is taken. Coinbase announced that it plans to dispute the SEC’s finding. At the heart of the issue is whether the crypto products sold on the Coinbase exchange should be considered securities and registered with the SEC accordingly. The SEC is pursuing similar actions with other crypto exchanges. See article at Yahoo.com

7. Job openings starting to decline

Though the job market remains strong, the number of job openings as a percentage of the labor market shrank in January by 0.3%. Conditions vary from state to state, but more states saw job openings decrease than increase in January. Job openings decreased in 13 states plus the District of Columbia and increased in 3 states. They were essentially unchanged in the remaining 34 states. See latest release at BLS.gov

8. Mortgage loan performance remains stable

Despite continued inflation and other financial problems lately, the rate of mortgages in forbearance declined in February. The percentage of total mortgage balances in forbearance programs dropped by 4 basis points to 0.60% during the month. Forbearance programs are temporary relief that mortgage servicers give borrowers who are having trouble paying their loans. See release from MBA.org

9. Mortgage rates slide for second consecutive week

Mortgage rates reacted to the drop in bond yields following recent bank failures. Both 30-year and 15-year mortgage rates dropped for the second week in a row. 30-year rates fell by 18 basis points, to 6.42%. 30-year rates are now a total of 31 basis points lower than their year-to-date peak of 6.73%, which was reached on March 9. See more rate information at FreddieMac.com.

Weekly News Headlines from Credit Sesame

Richard Barrington
Financial analyst for Credit Sesame, Richard Barrington earned his Chartered Financial Analyst designation and worked for over thirty years in the financial industry. He graduated from St. John Fisher College and joined Manning & Napier Advisors. He worked his way up to become head of marketing and client service, an owner of the firm and a member of its governing executive committee. He left the investment business in 2006 to become a financial analyst and commentator with a focus on the impact of the economy on personal finances. In that role he has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications.

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