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Personal finance weekly news roundup March 18, 2023

news roundup March 18

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Credit Sesame’s personal finance weekly news roundup March 18, 2023. Stories, news, politics and events impacting the personal finance sector during the last week.

  1. High-profile bank failures rattle investors and depositors
  2. Emergency measures taken to prop up troubled banks
  3. Investment fraud leads list of online crimes
  4. Inflation slows but is still too high
  5. Wholesale inflation takes a downward turn
  6. Fed announces plan to launch instant payment service
  7. Housing starts accelerated in February
  8. Mortgage rates reverse course

1. High-profile bank failures rattle investors and depositors

Banking regulators stepped in when two banks were unable to meet the demands of depositors withdrawing money. The two banks are Silicon Valley Bank and Signature Bank. These rank as the second and third largest bank failures in US history. Other bank stocks plummeted on the news. Meanwhile, federal regulators pledged to cover all deposits, even those amounts in excess of the $250,000 FDIC coverage limit. See full article at Yahoo.com

2. Emergency measures taken to prop up troubled banks

Following the failures of Silicon Valley Bank and signature bank, two other banks facing a liquidity crunch received emergency infusions of cash. US-based First Republic bank received $30 billion in deposits from a group of large banks. In Switzerland, Credit Suisse borrowed the equivalent of $54 billion from the Swiss central bank. Meanwhile, the US Federal Reserve took steps to provide extra liquidity to the banking system. See summary at Reuters.com

3. Investment fraud leads list of online crimes

New FBI figures show that in 2022 investment fraud passed business email hacks as the most costly form of internet crime. Investment fraud was responsible for $3.3 billion in losses last year, compared to $2.7 billion in losses due to business emails being breached. Investment crime was the most costly because of the large average amount lost in these cases, but phishing scams were by far the most commonly occurring online crimes. Losses to investment crimes more than doubled in 2022. People aged from 30 to 49 were the most frequently targeted group. See article at Cybernews.com

4. Inflation slows but is still too high

The Consumer Price Index rose by 0.4% in February, and by 6.0% for the twelve months through the end of February. The 0.4% monthly increase marked a slight decline from January’s 0.5%. The 12-month increase was the smallest since the end of 2011. Despite these slight improvements, the pace of inflation remains well above the Federal Reserve’s 2% annual target. The core inflation rate, which excludes food and energy, rose by 0.5% in February, indicating that price increases remain broadly distributed throughout the economy. See news release at BLS.gov. 

5. Wholesale inflation takes a downward turn

While consumer prices rose in February, wholesale prices as measured by the Producer Price Index (PPI) actually declined for the month. The PPI declined by 0.1% in February. Encouragingly, the decline was led by a 2.2% drop in producer prices for foods during the month. However, monthly changes in the PPI can be erratic and not necessarily indicative of a trend. February’s 0.1% decline comes on the heels of a 0.3% increase in January and a 0.2% decrease in December. See news release at BLS.gov.

6. Fed announces plan to launch instant payment service

The Federal Reserve has announced that it will launch a payment transfer service called FedNow in July. The program should allow consumers, merchants and banks to instantly transfer money. The idea is that this method of handling transactions could take the place of using more costly and risky providers such as payday lenders and peer-to-peer payment services. It could also potentially perform some of the functions of a national digital currency. See article at Yahoo.com

7. Housing starts accelerated in February

New construction for privately-owned houses revived a little in February after declining for several months. Census Bureau data showed that new housing starts increased by a seasonally-adjusted annual rate of 9.8% last month. However, this February’s housing starts were still 18.4% lower than last February’s. A rise in home construction is good news on two fronts. It represents optimism about the strength of the economy. It also signals future increases in the housing supply, which may take some pressure off of the high level of home prices. See report from ABA.com

8. Mortgage rates reverse course

Following five consecutive weeks of increases, 30-year mortgage rates dropped by 13 basis points last week to 6.60%. The decline came as long-term interest rates generally fell in response to economic and investment concerns over failing banks. Last week’s dip in mortgage rates is small by comparison to the 64 basis point rise over the prior five weeks. Overall, 30-year rates are now 18 basis points higher than where they started the year. See the latest 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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