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The U.S. Federal Reserve cut interest rates yesterday but will it make an instant or dramatic impact? Find out more later in this email. |
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💵 Today’s Top Stories |
| | Co-branded hotel rewards credit cards are “just worthless,” Clark says. Here’s why he’s so against them in 2024. Read more. |
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| | As the TV and streaming markets splinter and sports rights get more expensive, you’ll pay more than ever to watch the NFL this season. More than $700 if you want to watch every game. Read more. |
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| | Figuring out how much a financial advisor costs can be challenging. How do you know if you’re paying too much? This guide walks you through everything you need to know to make sure you’re not getting ripped off. Read more. |
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| | Spam calls and texts have been a huge problem for years. This app can prevent some of those nuisances. But is it better than what your cell phone service provider offers? Read more. |
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📉 Don’t Expect Rate Cuts To Make Instant, Dramatic Impact |
The U.S. Federal Reserve cut interest rates by a half point yesterday, marking the first such rate cut since March 16, 2020. |
The Fed’s current range is now 4.75% to 5.00%, down 0.50%. |
The Fed has two mandates: price stability (inflation) and maximum sustainable employment (job market). |
CPI, the number the government officially uses for inflation, fell to 2.5% in August – the lowest in 43 months and close to the 2.0% benchmark. |
The official unemployment rate rose from 3.7% in January to 4.2% in August. And seemingly every months-later revision, which happens often with job data, has gone in a negative direction. |
So the Fed has decided that its focus on price stability has finally taken a backseat to its focus on protecting jobs. |
It needed to slam on the brakes on the economy after inflation reached a peak of 9.1% in June 2021. And now it needs to stimulate the economy before the current trends start posing a big threat to the job market and economic vitality. |
While the rate cuts are welcome in many respects, don’t expect some instant and deep impact based on a single quarter-point cut. |
“Consumers should feel good about [it], but it’s not going to deliver sizeable immediate relief,” Brett House, a Columbia Business School economics professor, told CNBC. |
For those looking forward to trading good interest rates from the best savings accounts for lower interest rates on home and auto loans and high-interest credit cards, and perhaps some stock market investment boost, be patient. |
The forward-looking market already had accounted for better interest rates. And assuming the Fed continues cutting rates over time, the number eventually will be enough to make a more significant difference. |
“That could bring the Fed’s benchmark federal funds rate from its current range to below 4% by the end of 2025,” CNBC reported. |
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📊 Stat of the Day |
🖥️ $17 billion: The combined fines that the European Court of Justice charged Apple ($14.4 billion) and Google ($2.6 billion) last week. This is just the latest ruling in a string of tech regulation in Europe over privacy laws, anti-trust and tax issues. |
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💰️ Deal Alert: Today’s Top Deals |
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🎙️ Podcast |
| Full Show: Why You Should Never Be Loyal to a Hotel Brand and Do Laundry Sheets Actually Work? |
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If you think the sign on a hotel matters, you may need to think again. Clark talks about the lack of consistency across brands, the decline of decent hotel reward programs and the devaluation of travel points to an almost worthless level. Plus, he has a warning about hotel brand credit cards. Also, Clark was really excited when he learned about laundry sheets. But a new review from Consumer Reports rates them embarrassingly low when it comes to getting clothes clean. If you bought laundry sheets because of Clark, he shares an apology to your wallet! |
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☎️ Need Money Help? |
The Team Clark Consumer Action Center is a free helpline that can help you navigate your money questions. Call 636-492-5275. Visit clark.com/cac for more information. |
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