- The Fed has so far saved the stock market from crashing, thanks to massive liquidity, Ed Yardeni said.
- He pointed to the Fed’s Bank Term Funding Program, which offers short-term loans to lenders.
- Quelled volatility suggests those loans have worked to stabilize US banks and buoy stock prices.
- Respondents to a New York Fed survey expect prices to rise by half a percentage point in the year ahead, equating to a 4.75% annual gain.
- Those reporting that credit is much or somewhat harder to get than a year ago rose to 58.2%, the highest ever in a data series that goes back to June 2013.
- Consumers expect gas prices to rise by 4.6% in the year ahead and see food prices up 5.9%.
People are struggling with inflation and it’s bad
6% inflation? A MCDONALD’S BIG MAC MEAL COSTS $18 IN CONNECTICUT
The Biden administration’s sweeping plan to cancel up to $20,000 in student debt for tens of millions of Americans may have an unintended, though hopefully temporary, consequence for some people, experts say.
“For many borrowers, it will cause their credit scores to drop,” said higher education expert Mark Kantrowitz.
Here’s why: Throughout the three-year pause on federal student loan payments, borrowers’ accounts have been reported to the credit bureaus as current, Kantrowitz said. (Payments are currently scheduled to restart by September.)
Federal Reserve Bank of Dallas surveyed 71 banks late last month, and found a significant drop in lending.
- Loan demand declined for the fifth period in a row as bankers in the March survey reported worsening business activity. Loan volumes fell, driven largely by a sharp contraction in consumer loans.
- Banking outlooks continued to deteriorate, with contacts expecting a contraction in loan demand and business activity and an increase in nonperforming loans over the next six months.
- It already costs more to borrow money, as a result of rising interest rates. And the recent failure of two big regional banks is likely to make other lenders even stingier.