Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
What Investors Should Know About Money-Market Funds and CDs (May 6, Wall Street Journal) In addition to having emergency cash on hand, individual investors are pouring billions of dollars into cash-equivalent investments such as money-market funds and certificates of deposit that are yielding 5% or more—far more than a traditional low-yielding bank savings account.
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If history is a guide, putting too much of one’s portfolio in cash is a strategy that can backfire and be a drag on portfolio performance.
Treasury Secretary Janet Yellen on Sunday said that failing to raise the debt ceiling will cause a “steep economic downturn” in the U.S., reiterating the country’s early June deadline.
Inflation rose 4.9% in April from a year ago, less than expectations (May 10, CNBC) The consumer price index, which measures the cost of a broad swath of goods and services, increased 0.4% for the month, in line with the Dow Jones estimate.
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However, that equated to an annual increase of 4.9%, slightly less than the 5% estimate.
Excluding volatile food and energy categories, core CPI rose 0.4% and 5.5% from a year ago both in line with expectations.
US Jobless Claims Rise to Highest Since October 2021 in Sign Labor Market Is Cooling (May 11, Bloomberg) Applications for US unemployment benefits rose to the highest level since October 2021, adding to evidence that the labor market is gradually cooling.
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Looking ahead, more job cuts could be on the horizon as a year’s worth of interest-rate increases by the Federal Reserve and tighter credit conditions continue to weigh on the economy.
U.S. April producer prices rise 2.3% over past year, smallest increase since January 2021 (May 11, MarketWatch) Economists polled by the Wall Street Journal had forecast the PPI would rise 0.3%.
In the 12 months through April, the PPI increased 2.3%. It follows a 2.7% gain in March. This is the lowest rate since January 2021.
Mortgage rates fall in latest week. Economists say this could mark the start of a decline in rates in 2023 (May 11, MarketWatch) The drop in mortgage rates is a “welcome departure from the record increases of last year,” Sam Khater, chief economist at Freddie Mac, said in a statement.
“While inflation remains elevated, its rate of growth has moderated and is expected to decelerate over the remainder of 2023,” he added. “This should bode well for the trajectory of mortgage rates over the long-term.”
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