Fed Rate Hike
There was no surprise that the Fed raised the federal funds rate this week by a quarter point to a range of 3.75%-4%. The vote was unanimous. Now, all eyes are focused on the next meeting set for October 28-29. As of today, the bond futures markets are 50/50 that there will be another hike at that meeting. Looking to the December 8-9 meeting, current odds are roughly 88% that they will hike another quarter point. High fuel prices and stubbornly high inflation are the main reasons for the pressure to hike again.
Source: Wall Street Journal
Retail Sales Numbers Beat
Earlier this week, the U.S. Census Bureau reported that for August, retail sales came in at +1.2% compared to estimates of a rise of only 0.5%. Year -over-year, the number came in at +6.0%. National Retail Federation’s chief economist noted a “K-shaped” pattern in spending — higher-income households driving much of the strength while lower-income households face more pressure — so the headline number may be masking some unevenness underneath.
Source: U.S. Census Bureau, National Retail Federation
Cheapest State to Retire In
No, it’s not Florida, Texas, or Wyoming that have no state income tax. Think about moving to South Dakota. South Dakota has the lowest income-adjusted tax burden among no-income-tax states at $5,041 per capita, with a cost-of-living index of just 89 (100 = Average Cost of living; below 100 reflects cheaper-than-average living). Drawbacks include winters and distance from adult children who may prefer warmer climates or the smell of ocean air.
Source: Wall Street Journal
Ask for VantageScore 4.0
Back in April, federal regulators approved the VantageScore 4.0 scoring model for use by Fannie Mae, Freddie Mac, and the FHA to determine a borrower’s creditworthiness. It treats paid-off collection accounts more favorably, factors in 24 months of credit trends plus on-time rental payment history, and can count rent as a positive credit factor. Lenders pick and choose which scoring models to use, so a borrower should ask them to use VantageScore 4.0 if you are a “thin-file” borrower, a renter without much traditional credit, or someone with unresolved collections.
Source: Wall Street Journal
AI Air Traffic Control
Announced back in June, the FAA awarded a $875 million contract to deploy two AI air traffic management systems. Starting this coming Monday, the software known as “Smart” is expected to help the FAA and airlines reduce delays and cancellations and find routes for flights when disruptions scramble air traffic. It will first debut in the Washington, D.C., area ahead of a broader nationwide rollout, according to government and industry officials.
Source: Wall Street Journal
New Rules for Selling a Home with High Interest Rates
Word on the street now is that a price reduction on a home listed for sale is no longer a “red flag”. Now it’s just standard negotiation. Also, concessions have replaced bidding wars, such as helping the buyer buy down their mortgage rate. Staging a home can cost money, but it’s becoming a valuable way to present the home, which often leads to a better price than showing it with all your own furniture.
Source: National Association of Realtors
