Nowadays, they call them &#8220;side hustles,&#8221; but in the old days, they were known simply as &#8220;second jobs.&#8221;
In President Joe Biden&#8217;s America, with inflation, housing costs, and interest rates soaring, a lot of people need to make more money just to afford the cost of living. And despite all the dismissive smears on the younger generations wasting their money on cappuccino and avocado toast, they&#8217;re really just trying to stay afloat.
Nearly two in five (39%) of U.S. adults have a side hustle, <a href="https://www.bankrate.com/personal-finance/side-hustle-survey/" target="_blank" rel="noopener">according</a> to a Bankrate survey. The numbers get even higher for younger generations.
Nearly half (46%) of Generation Z workers and more than a third (37%) of Millennials said that they worked a second part-time job — or even a second full-time job, according to a study of 22,000 young workers conducted by consulting firm Deloitte, Fortune <a href="https://fortune.com/2023/05/19/quiet-quitting-side-hustle-second-job-millennials-gen-z-paycheck-deloitte/" target="_blank" rel="noopener">reports</a>.
Bankrate reports that less than one-quarter (24%) of Baby Boomers — who are now age 59 to 77 — say they have a side hustle, while 40% Gen Xers (age 43-58) have a second gig. And Bankrate puts the numbers even higher: 53% of Gen Zers (age 18-26) and 50% of Millennials (ages 27-42) said they have a second job.
The Deloitte poll found younger generations usually pick jobs they can do from home or that have flexibility, like selling online products, delivering food orders or working for a ride-share company like Uber of Lyft.
&#8220;The cost of living has been [the workers&#8217;] top concern for two consecutive years now, and finances are consistently their top stress driver,&#8221; Michele Parmelee, who heads global people and purpose at Deloitte, told Fortune. &#8220;Interestingly, these concerns are really consistent across both generations, so it’s not just a matter of Gen Zs being young and just getting started in their careers.&#8221;
Far more people with a second job say they just need the money. &#8220;Side hustles have become more common, but like so many things in this inflationary environment, people are working harder but not necessarily getting ahead. Side hustlers are much more likely to view this extra income as essential, rather than a passion project or a way to get ahead financially,&#8221; said Ted Rossman, Bankrate senior industry analyst.
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The side hustles bring in an average of $810 a month, Bankrate calculates, and a third of side hustlers say they need the extra cash just to meet day-to-day living expenses. Many of the two-jobbers make less than $50,000 a year, and many don&#8217;t see it getting better: More than a quarter (28%) think they&#8217;ll always need a side hustle to keep a roof over their heads and food in their bellies.
For the record, it wasn&#8217;t always this way. Back in my youth in the 1970s, my dad worked as a hospital administrator and my mom as a high school guidance counselor. We lived in a big house in the now chi-chi neighborhood of Chevy Chase, Maryland (my parents bought the house in 1969 for $67,000; it&#8217;s now <a href="https://www.redfin.com/MD/Chevy-Chase/8312-Kerry-Rd-20815/home/10671553" target="_blank" rel="noopener">valued</a> at more than $1.8 million) with a pool. We (parents and three kids) took a vacation to the beach every summer and a ski trip every winter.
But there were also plenty of families I knew where only the father worked, like my buddy Tony Salvatore&#8217;s. They had eight kids and lived in an even bigger house in Chevy Chase, all on a single income.
So the younger generations are absolutely right: Things are a mess these days. And sadly, Biden — who a lot of them voted for — isn&#8217;t doing a thing about it. In fact, the debt reduction bill just passed by Congress and on its way to the White House for his signature is going to make things worse for them.
Let&#8217;s hope by 2024 they truly take a look at the issues and pick the party that&#8217;ll most help them out &#8212; and make so they only have to work one job to make ends meet.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.
Joseph Curl has covered politics for 35 years, including 12 years as White House correspondent for a national newspaper. He was also the a.m. editor of the Drudge Report for four years. Send tips to josephcurl@dailywire.com and follow him on Twitter @josephcurl.

To do list – side hustle

Gen Zers Are Right: In Biden’s America, Millions Need A Second Job Just To Survive

Gen Zers Are Right: In Biden's America, Millions Need A Second Job Just To Survive

Economy

Gen Z

Inflation

Millennials

U.S.

The Baby Boomer generation stretched from 1946 to 1964. That means members are now 59 to 77 years old, and nearly 10,000 Boomers reach retirement age &#8212; 65 &#8212; each day.
But in the age of President Joe Biden &#8212; with inflation soaring double digits, interest rates skyrocketing, and investment portfolios sagging &#8212; a lot of those older Americans are being forced to &#8220;unretire.&#8221;
&#8220;Unfortunately, the inflation-driven affordability crisis and the Federal Reserve’s interest rate hikes meant to combat inflation have driven housing costs higher,&#8221; USA Today reported this week. &#8220;As a result, retirees are moving back into the labor force. According to a <a href="https://12ft.io/proxy?q=https%3A%2F%2Fwww.usatoday.com%2Fstory%2Fopinion%2Fvoices%2F2023%2F05%2F28%2Finflation-government-spending-are-pulling-boomers-out-of-retirement%2F70254240007%2F" target="_blank" rel="noopener">survey</a> by Paychex, 55% of retirees who went back to work said they did so because they needed more money, and 1 in 6 retirees is considering returning to work.&#8221;
&#8220;Most would want to work full-time (65%) instead of part-time (35%). This could be due to a need for more money — the reason cited by 53% of respondents,&#8221; Paychex <a href="https://12ft.io/proxy?q=https%3A%2F%2Fwww.usatoday.com%2Fstory%2Fopinion%2Fvoices%2F2023%2F05%2F28%2Finflation-government-spending-are-pulling-boomers-out-of-retirement%2F70254240007%2F" target="_blank" rel="noopener">reported</a>. Some 55% of retirees went back to work because they said they needed more money.
The endless crunch since Biden took office &#8212; inflation soared 9.1% in June 2022 year-over-year and housing costs were 8.1% higher in April compared to a year earlier &#8212; has pinched seniors. Of course, Biden and Democrats have done nothing to address skyrocketing health care costs, which means older Americans are being hit from every side.
Plus, Biden and congressional Democrats passed the so-called Inflation Reduction Act, which didn&#8217;t offer a bit of help for the rising cost of food, housing, or energy prices. The latest debt deal passed on Wednesday will also deliver no relief whatsoever.
It&#8217;s been a perfect storm hammering seniors. Along with the soaring cost of living, &#8220;many older adults find themselves in deteriorating financial positions due to massive stock market losses in 2022,&#8221; USA Today reported. Last year, more than $12 trillion in wealth disappeared as the Dow dropped 8%, the S&amp;P 500 19.4%, and Nasdaq 33%.
An AARP <a href="https://www.aarp.org/pri/topics/work-finances-retirement/financial-security-retirement/financial-security-trends-survey-wave2/" target="_blank" rel="noopener">survey</a> late last year found more than a third of people 65 and older said their current financial situation at midyear was worse than a year before. That represented a massive jump from the beginning of 2022, when just 13% of that age group said so.
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To keep pace, Social Security and Supplemental Security Income (SSI) benefits were increased 8.7% at the beginning of 2023, but even that hasn&#8217;t been enough.
This is the danger of having a senile, out-of-touch president who has no clue what living in America is all about. Biden became a multi-millionaire while serving in the Senate and now has chefs &#8212; paid for by you, of course &#8212; prepare his every meal. He doesn&#8217;t have a clue what a dozen eggs or a gallon of gas costs.
And just so you know, there&#8217;s no help on the way. In Biden&#8217;s America, you&#8217;re on your own, and he&#8217;s not even going to try to fix anything.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.
Joseph Curl has covered politics for 35 years, including 12 years as White House correspondent for a national newspaper. He was also the a.m. editor of the Drudge Report for four years. Send tips to josephcurl@dailywire.com and follow him on Twitter @josephcurl.

Senior businessman typing on a laptop in a coworking space

Soaring Bidenflation Forcing Older Americans To ‘Unretire,’ New Poll Finds

Soaring Bidenflation Forcing Older Americans To 'Unretire,' New Poll Finds

elderly

Executive

Inflation Reduction Act

U.S. inflation continues to dog both the American and, more importantly, the American consumer. The year-over-year inflation rate in April 2023 was 4.9%, per the U.S. Bureau of Labor <a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank" rel="noopener">Statistics</a>. Many television economists and talking heads celebrated the slowing of inflation’s rate of growth. What these so-called experts fail to realize is that April’s inflation rate was 4.9% higher than the rate in <a href="https://www.bls.gov/news.release/archives/cpi_05112022.pdf" target="_blank" rel="noopener">April 2022</a>, which was 8.3%. This means that the inflation rate was 13.2% when compared to April 2021 – hardly a number worth celebrating.
Journalists have written extensively about the impact of inflation on America’s collective pocketbook. Higher gas prices, higher food prices, and higher prices for items such as used cars and trucks have dominated the headlines. But there are hidden costs to inflation, inflicting pain on the middle class and poorest Americans.
The U.S. real estate market is already in a recession. Through the first quarter of 2023, “U.S. <a href="https://finance.yahoo.com/news/fannie-mae-housing-market-recession-172217493.html" target="_blank" rel="noopener">housing</a> market activity as measured by private residential fixed investment has declined, on a nominal basis, for four straight quarters … Fannie Mae’s forecast model thinks declines in the U.S. housing market will spill over and help to push the U.S. economy into a recession.”  
The housing market is in a vicious cycle. <a href="https://www.marketwatch.com/story/buckle-in-30-year-mortgage-rates-are-back-above-7-heres-how-many-extra-dollars-home-buyers-will-have-to-pay-6fe3101f" target="_blank" rel="noopener">Interest rates</a> are above 7% for the third time this year. This is driving a lack of inventory as people with fixed rate mortgages below 5% are loath to sell their homes and purchase a new home at a higher interest rate. The lack of inventory is driving bidding wars in some areas, making first-time homeownership more difficult. It also makes it harder to recruit people to fill roles in companies that require relocation. Simply put, not many people want to venture into the housing market at this time.
It is not just housing. The U.S. auto market is quietly suffering, but not in a manner that many think. Prices are slowly <a href="https://finance.yahoo.com/news/best-month-buy-car-2023-231008486.html#:~:text=There%20is%20good%20news%20on,is%20poised%20to%20keep%20easing." target="_blank" rel="noopener">dropping</a>, as supply chain issues are abated, with new car prices expected to fall 2.5 &#8211; 5% and used vehicle prices expected to decrease 10 &#8211; 20%.
However, the typical interest rate on a new car loan rose to 8.95% in March, up from 5.66% in March of 2022. For used cars, the rate was 11.3% in March, up from 7.7% a year ago. A one percentage point increase on an auto <a href="https://www.cbsnews.com/news/auto-loan-interest-rate-march-2023/" target="_blank" rel="noopener">loan</a> “adds roughly $20 a month to a car note and thousands of dollars extra over the life of the loan.”
The higher interest rates for cars are not calculated in the inflation rate, just the drop in MSRP. The hidden cost is found in higher interest rates causing more drivers to fall behind on their car payments. In January 2023, the percentage of auto borrowers who were at least 60 days late on their bills climbed “2% from December and 20.4% from the previous year,&#8221; according to <a href="https://www.foxbusiness.com/money/car-debt-piles-up-more-americans-struggle-make-payments">Fox Business</a>. &#8220;The percentage of severe delinquencies surged to the highest level since 2006. Loan defaults increased 6.2% over the course of January 2023 and were up 33.5% from a year earlier. Car repossessions were up 11% in 2022.”
Another hidden cost of inflation is the grossly expanding credit card debt of American citizens. U.S. consumers now owe $986 billion on their credit cards, according to data from the <a href="https://www.newyorkfed.org/newsevents/news/research/2023/20230515">Federal Reserve Bank of New York.</a> That is a 17% increase from a year ago and a record high, as more households are forced to use their credit cards to pay monthly expenses such as food and utilities.
The final hidden cost of inflation is the increase in hardship withdrawals from retirement plans. In 2022, 401(k) <a href="https://money.usnews.com/money/retirement/401ks/articles/401k-hardship-withdrawals-hit-record-high#:~:text=Under%20the%20new%20rules%20related,usual%2010%25%20early%20withdrawal%20penalty." target="_blank" rel="noopener">hardship</a> withdrawals rose by 24%, not only demonstrating how people are struggling to make ends meet, but also signaling a pending retirement crisis, as people will have less money on which to depend during retirement.
Joe Biden’s inflation is destroying the American dream. At a time when 57% of <a href="https://www.wsbtv.com/news/local/many-americans-cant-afford-cover-emergency-expense-with-savings-survey-shows/IFNMZQ5WFNEQTCZIPQVTW7UMWA/" target="_blank" rel="noopener">Americans</a> cannot afford an emergency expense of $1,000 or more from their savings, Democrats want to not only increase the debt limit, but also raise taxes so they can spend more money, which will drive more inflation. Americans are hurting, and their pain is not covered in today’s financial headlines.
Jim Nelles is a Navy veteran and supply chain consultant based in Chicago. His articles have appeared in The Washington Examiner, Newsweek, Foxnews.com, and The Daily Wire. He has served as a chief procurement officer, chief supply chain officer, and chief operations officer for multiple companies.
The views expressed in this piece are those of the author and do not necessarily represent those of The Daily Wire.

Global financial crisis

The Hidden Costs Of Biden’s Inflation Are Destroying The American Dream

The Hidden Costs Of Biden's Inflation Are Destroying The American Dream

Automobiles

Banking

Biden Administration

Federal Reserve

Gas Prices

Interest Rates

Readers Pass

Real estate

Americans in certain metropolitan areas are <a href="http://dailywire.com/topic/economy" target="_blank" rel="noopener">spending</a> an “uncomfortably high” share of their <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">incomes</a> on rent, a phenomenon that comes as the residential <a href="https://www.dailywire.com/topic/housing" target="_blank" rel="noopener">housing</a> market remains inaccessible for many families, according to an <a href="https://www.moodys.com/web/en/us/about/insights/data-stories/us-rental-housing-affordability.html" target="_blank" rel="noopener">analysis</a> from Moody’s Analytics.
There are currently seven cities where residents pay more than 30% of median income levels to rent an apartment: New York City, and nearby parts of northern New Jersey; Boston, Massachusetts; Los Angeles, California; and Palm Beach, Fort Lauderdale, and Miami, Florida.
“Cost-of-living and shelter affordability concerns are top of mind amongst Americans,” the analysis said. “Not only will rent burdens across median income households remain elevated nationally, but low-income families and those living in the costliest areas will continue to be forced into making difficult trade-offs, often with regard to other life necessities.”
The analysis noted that the only metropolitan area in which residents could expect to pay more than 30% of income on household rent in 1999 was New York City, which had rent-to-income ratios exceeding 53% at the time. More cities have witnessed expensive rental markets as median income grew 77% and rent increased 135% nationwide over the past two decades.
New York City still remains the most expensive rental market in the country with rent-to-income ratios approaching 68% as of last year. Miami follows suit with rent-to-income ratios nearing 42%; cities in Florida have experienced above-average rent growth as an early end to lockdowns and an overall lower tax burden boosted net migration over the past three years.
Increased rental costs occur as home affordability continues to plummet. Public health mandates caused low labor force participation and supply chain constraints, worsening the trend of decreased construction levels for residential real estate, while elevated interest rates in recent months induced high mortgage rates, keeping potential buyers in their apartments.
“Rental demand surged as a result and drove rates sky high,” the analysis continued.
The overall housing market had a shortage of 3.8 million properties as of 2019, according to <a href="https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage" target="_blank" rel="noopener">data</a> from the government-backed mortgage company Fannie Mae, while the National Association of Realtors <a href="https://www.nar.realtor/newsroom/once-in-a-generation-response-needed-to-address-housing-supply-crisis" target="_blank" rel="noopener">estimates</a> that homebuilders should have constructed between 5.5 million and 6.8 million more houses over the past two decades to match current demand.
Rental markets are also seeing <a href="https://www.dailywire.com/news/americas-typical-apartment-is-getting-smaller" target="_blank" rel="noopener">decreases</a> in unit sizes, indicating a reversal from the desire for larger properties that corresponded with lockdowns as families spent more time in their homes and breadwinners relied more on virtual work. The average size of new apartments was 887 square feet in 2022, constituting a 3% drop from the previous year and continuing a decline of 54 square feet over the past decade, according to a recent <a href="https://www.rentcafe.com/blog/rental-market/market-snapshots/national-average-apartment-size/" target="_blank" rel="noopener">report</a> from RentCafe.
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Median home prices recently <a href="https://www.dailywire.com/news/home-prices-fell-year-over-year-for-the-first-time-in-a-decade-but-theres-a-massive-catch" target="_blank" rel="noopener">fell</a> year-over-year for the first time in more than a decade even as elevated mortgage rates are still rendering properties less affordable for prospective buyers, according to an <a href="https://www.redfin.com/news/housing-market-update-home-sale-prices-fall-first-time/" target="_blank" rel="noopener">analysis</a> from Redfin. Homeowners who acquired mortgages at low rates in the months after the lockdowns have reason to avoid selling their properties, a phenomenon that could further limit the number of houses on the market and decrease affordability for buyers.
Median home sale prices increased from $322,600 in the second quarter of 2020 to $467,700 in the fourth quarter of 2022, a metric which has since declined to $436,800 in the first quarter of 2023, according to <a href="https://fred.stlouisfed.org/series/MSPUS" target="_blank" rel="noopener">data</a> from the Department of Housing and Urban Development.

New York City

Here Are The Seven Cities Where Rent Exceeds 30% Of Median Income

Here Are The Seven Cities Where Rent Reaches 'Uncomfortably High' Share Of Income

Boston

Housing

Los Angeles

Miami

An increasingly large majority of Americans say that <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">inflation</a> continues to strain their household budgets, a revelation that comes even as President Joe Biden and senior <a href="http://dailywire.com/topic/biden-administration" target="_blank" rel="noopener">White House</a> officials insist that the nation is “making progress” as inflation has decreased in recent months.
Some 61% of respondents to an April 2023 <a href="https://news.gallup.com/poll/505928/say-inflation-causing-financial-hardship.aspx?utm_source=alert&amp;utm_medium=email&amp;utm_content=morelink&amp;utm_campaign=syndication" target="_blank" rel="noopener">survey</a> released by Gallup this week concurred that “recent price increases” have caused “financial hardship” for themselves and their households. The share of respondents answering in the affirmative continued to rise from 56% in August 2022, 49% in January 2022, and 45% in November 2021.
Roughly 15% of respondents in April 2023 additionally said that the hardship from elevated inflation has been “severe” and affects their ability to maintain a consistent standard of living. “As has been the case for the past two years, lower-income Americans report greater hardship from inflation than those in higher income brackets,” Gallup noted.
Another survey from Gallup showed that the “high cost of living” is the “most important financial problem” facing the plurality of American families: 35% referenced inflation, 11% referenced costs for owning or renting a home, 9% referenced excess debt, and 7% referenced low wages.
The surveys were conducted as headline inflation <a href="https://www.dailywire.com/news/headline-inflation-ticks-downward-as-some-product-categories-continue-to-surge" target="_blank" rel="noopener">fell</a> below 5% last month, marking a continued decline from the inflation rates exceeding 9% last summer. Price increases for food, shelter, and other central components of household budgets, on the other hand, still remain well above the 5% overall level.
The latest inflation data comes as officials at the Federal Reserve increased the target federal funds rate in an effort to slow price level increases, a policy regime that raises the cost of borrowing funds for consumers and businesses, thereby lowering inflation but dampening overall economic activity. Federal Reserve policymakers <a href="https://www.dailywire.com/news/federal-reserve-unveils-quarter-point-target-interest-rate-hike-as-banking-system-reels" target="_blank" rel="noopener">introduced</a> a quarter-point rate hike earlier this month, continuing a slowdown from previous rate hikes and reflecting caution as the financial sector reels from the <a href="https://www.dailywire.com/news/confidence-in-american-banks-is-low-amid-continued-financial-sector-tumult" target="_blank" rel="noopener">collapse</a> of three medium-sized banks.
President Joe Biden has meanwhile faced criticism for repeated assertions that his policies, such as the Bipartisan Infrastructure Law and the Inflation Reduction Act, are responsible for the somewhat less severe headline inflation levels. Rates charted last month are still between three and four times higher than those seen before he assumed office in January 2021, as well as more than double the 2% benchmark that the Federal Reserve has maintained for decades.
“We are making progress in the fight against inflation,” he commented in one <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/31/statement-from-president-joe-biden-on-february-pce-report/" target="_blank" rel="noopener">statement</a> released last month. “The fight against inflation isn’t over, and every day my administration is working to give families more breathing room.”
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White House Press Secretary Karine Jean-Pierre issued similar <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/05/10/statement-from-press-secretary-karine-jean-pierre-on-april-cpi-report/" target="_blank" rel="noopener">remarks</a> last week and contended that House Republicans, who have refused to endorse an increase in the debt ceiling until meaningful federal budget <a href="https://www.dailywire.com/news/biden-and-mccarthy-make-progress-after-latest-debt-ceiling-talks" target="_blank" rel="noopener">reforms</a> are enacted, could induce the “single biggest threat to our economy” if the nation <a href="https://www.dailywire.com/news/major-bank-sets-up-war-room-as-nation-approaches-debt-default" target="_blank" rel="noopener">defaults</a> on obligations without an amendment to the debt limit.
Jean-Pierre has also <a href="https://www.dailywire.com/news/white-house-press-secretary-claims-americans-are-saving-on-gas-under-biden" target="_blank" rel="noopener">claimed</a> that Americans are saving money on gasoline under the administration’s energy policies, which broadly center on <a href="https://www.dailywire.com/news/biden-epa-unveils-new-crackdown-on-power-plants" target="_blank" rel="noopener">discouraging</a> fossil fuels such as coal and natural gas while <a href="https://www.dailywire.com/news/biden-energy-department-starts-crackdown-on-dishwashers" target="_blank" rel="noopener">mandating</a> a transition toward renewable power sources. Prices at the pump, as with overall inflation, have declined from last summer but remain considerably higher from the start of the commander-in-chief’s inauguration.

President Biden in Durham

Biden Says Nation Is ‘Making Progress’ On Inflation. Here’s What America Thinks.

Biden Says Nation Is ‘Making Progress' On Inflation Even As More Americans Suffer

Gallup

Joe Biden

Poll

Just a couple of months ago, the cost of a dozen eggs surpassed the price of a pound of beef, marking the first time that’s happened since the U.S. Bureau of Labor Statistics began keeping <a href="https://www.bls.gov/opub/ted/2023/eggflation-rate-lower-milk-prices-decrease-in-february-2023.htm">data</a> in 1980.
The average price of a dozen large Grade A eggs was $4.82 in January 2023, while a pound of ground beef was $4.64. In January 2022, eggs were $1.93, and beef was $4.77, but egg prices have soared by 70% in the last year alone.
Back then, the mainstream media blamed it on avian flu, inflation, and supply chain issues. And just on Monday, CNN weighed in with a new <a href="https://www.cnn.com/2023/05/15/business/egg-prices/index.html">story</a> headlined, &#8220;Egg prices are crashing. Here’s why.&#8221;
But the story was riddled with oddities.
&#8220;As of last week, Midwest large eggs — the benchmark for eggs sold in their shells — cost just $0.94 per dozen in the wholesale market, according to Urner Barry, an independent price reporting agency,&#8221; CNN reported. &#8220;That’s a sharp fall from $5.46 per carton just six months ago. (In retail, prices are well above $1 per carton, though they too have been declining.)&#8221;
CNN put that price drop down to &#8220;a reversal of supply-demand trends,&#8221; claiming that prices soared as chicken farmers paid higher prices for food and fuel.
But then the network said <a href="https://archive.is/sXaR3" target="_blank" rel="noopener">this</a>: &#8220;The disruptions gave producers like Cal-Maine Foods (CALM), the largest US egg distributor, cover to hike prices way up and rake in huge profits.&#8221;
Whoa, hang on. I thought the egg producers were hurting, what with all this avian flu and inflation. Now you say they had huge profits?
That part is accurate. Cal-Maine Foods more than doubled its revenue in the first quarter of 2023 to nearly a billion dollars — and profits surged 718%, The Daily Wire <a href="https://www.dailywire.com/news/a-dozen-eggs-now-cost-more-than-a-pound-of-beef-heres-why">reported</a>. And production wasn’t down. Cal-Maine, which controls about 20% of the domestic egg market, said the total number of eggs it sold rose by 1%, CNN <a href="https://www.cnn.com/2023/03/29/business/egg-profits-cal-maine/index.html">reported</a>.
Eventually CNN gets around to the real reason egg prices are falling &#8212; &#8220;demand hasn’t kept pace.&#8221;
That&#8217;s right. When retailers began charging $7, $8, even $10 a dozen and higher, buyers went, nuh uh.
“Shoppers are budget conscious at that time,” Brian Earnest, lead economist for animal protein in CoBank, told CNN. &#8220;So typically, they’re probably putting more eggs in their basket than they normally do. But if you’ve got a high price environment, they’re not over-buying.”
Farm Action, a farmer-led advocacy group, knew the real story all along. It said the “real culprit” behind sky-high prices is a “collusive scheme” among top U.S. egg producers to fix prices to gouge consumers.
In a January <a href="https://farmaction.us/2023/01/19/farm-action-calls-for-ftc-to-investigate-record-high-egg-prices/?utm_source=substack&amp;amp;amp;amp;utm_medium=email">letter</a> to the Federal Trade Commission (FTC), Farm Action said the alleged collusion has helped egg producers “extract egregious profits reaching as high as 40%.”
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The letter said avian flu was never to blame. “Examining publicly-available financial data from the egg industry, the letter determines that the supply disruption caused by the avian flu outbreak had an ‘apparently mild impact on the industry,&#8217;” the group said in a press release.
“In the end, what Cal-Maine Foods and the other large egg producers did last year — and seem to be intent on doing again this year — is extort billions of dollars from the pockets of ordinary Americans through what amounts to a tax on a staple we all need: eggs,” the letter states.
At the time of its letter, Farm Action didn&#8217;t know how right they&#8217;d be: Cal-Maine&#8217;s profits would soar 718% in the next three months.
In the end, egg producers just saw an opportunity to jack up prices with inflation soaring across the country. Now, having gouged consumers &#8212; who backed away in droves &#8212; they&#8217;re dropping their prices.
That&#8217;s the real reason.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.
Joseph Curl has covered politics for 35 years, including 12 years as White House correspondent for a national newspaper. He was also the a.m. editor of the Drudge Report for four years. Send tips to josephcurl@dailywire.com and follow him on Twitter @josephcurl.

Egg Prices Soar in California

CNN Explains Why Egg Prices Soared, Gets It All Wrong

Media

Prices

American households currently have nearly $17.1 trillion in consumer debt, with <a href="http://dailywire.com/topic/economy" target="_blank" rel="noopener">balances</a> standing $2.9 trillion higher than before the lockdown-induced <a href="http://dailywire.com/topic/recession" target="_blank" rel="noopener">recession</a>, according to <a href="https://www.newyorkfed.org/newsevents/news/research/2023/20230515" target="_blank" rel="noopener">data</a> released on Monday from the <a href="http://dailywire.com/topic/federal-reserve" target="_blank" rel="noopener">Federal Reserve</a> Bank of New York.
Household debt in the first quarter of 2023 increased $1.2 trillion from the first quarter of 2022. Mortgage debt, typically the largest category of consumer loans maintained by households, now surpasses $12.0 trillion, a phenomenon that comes as the elevated interest rate environment forces prospective homebuyers to assume considerably higher mortgage rates. Student and automotive debt are each $1.6 trillion, while credit card debt neared $1.0 trillion.
Shares of mortgage debt in serious delinquency doubled from 0.3% to 0.6% over the past year, while automobile debt in serious delinquency rose from 1.6% to 2.3%, and credit card debt in serious delinquency rose from 3.0% to 4.6%.
Mortgage debt, which rose $864 billion over the past year, composed 71.7% of the overall household debt increase. Automobile debt rose $93 billion, and credit card debt rose $145 billion, marking 7.7% and 12.0% shares of the broader debt increase, while student loan debt was comparatively flat.
High mortgage rates, caused by actions from the Federal Reserve meant to combat inflation, have significantly decreased affordability for potential homebuyers in recent months. The 30-year fixed mortgage rate was below 3% in the two years after the lockdowns, according to <a href="https://fred.stlouisfed.org/series/MORTGAGE30US" target="_blank" rel="noopener">data</a> from government-backed mortgage company Freddie Mac, but the rate has risen to 6.4% as of last week, with the increases coming after the Federal Reserve hiked interest rates.
“The pandemic boom in purchase originations was driven by many factors: low mortgage rates, strong household balance sheets, and an increased demand for housing,” analysts from the Federal Reserve said in an <a href="https://libertystreeteconomics.newyorkfed.org/2023/05/the-great-pandemic-mortgage-refinance-boom/" target="_blank" rel="noopener">analysis</a>. “Homeowners who refinanced in 2020 and 2021 benefitted from historically low interest rates and will be enjoying low financing costs for decades ­to come.”
Median home sale prices increased from $322,600 in the second quarter of 2020 to $467,700 in the fourth quarter of 2022, according to <a href="https://fred.stlouisfed.org/series/MSPUS" target="_blank" rel="noopener">data</a> from the Department of Housing and Urban Development, followed by a moderate decline to $436,800 in the fourth quarter of 2023. Lower home prices in recent months come as a result of the high mortgage rates, which apply downward pressure on demand as families delay new home purchases.
Wage increases have failed to keep pace with inflation over the past two years, pressing consumers to finance more of their household expenditures with debt. The average age of cars and light-duty trucks on American roads has reached record levels as buyers likewise delay new purchases over elevated price levels and interest rates, according to a <a href="https://www.dailywire.com/news/americans-delay-buying-new-cars-as-long-as-possible-to-avoid-high-prices" target="_blank" rel="noopener">report</a> from S&amp;P Global.
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Americans are more pessimistic about their finances than at any time since the Great Recession: half of the respondents in a February <a href="https://www.dailywire.com/news/more-americans-say-they-are-worse-off-financially-than-any-other-time-since-the-great-recession" target="_blank" rel="noopener">survey</a> from Gallup said they are “financially worse off” compared to one year ago, while low-income Americans were the most likely to say they have less robust finances since last year.
Economic growth declined to a 1.1% annualized rate in the first quarter, marking a significant decrease as economic headwinds slow recovery from the recession and the interest rate hikes decrease consumer demand, according to an <a href="https://www.dailywire.com/news/american-economic-growth-slows-to-1-1-in-first-quarter" target="_blank" rel="noopener">estimate</a> from the Bureau of Economic Analysis.

Household Debt

American Consumer Debt Hits Record Level, Rises Nearly $3 Trillion Since Lockdowns

American Consumer Debt Hits Record Level

Recession

The average age of <a href="https://www.dailywire.com/topic/cars" target="_blank" rel="noopener">cars</a> and light-duty trucks on American roads has reached 12.5 years, according to a <a href="https://www.prnewswire.com/news-releases/average-age-of-light-vehicles-in-the-us-hits-record-high-12-5-years-according-to-sp-global-mobility-301824463.html" target="_blank" rel="noopener">report</a> from S&amp;P Global, a phenomenon that comes as bottlenecked <a href="https://www.dailywire.com/topic/supply-chain" target="_blank" rel="noopener">supply chains</a> and elevated <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">inflation</a> continue their toll on households.
The financial analytics firm noted that 2023 marked the sixth consecutive year of increased average vehicle ages. The three-month rise between 2022 and 2023 constituted the largest year-over-year increase since the recession which struck the United States between 2008 and 2009, during which consumers likewise tightened their budgets in response to economic turmoil.
&#8220;We expected the confluence of factors impacting the fleet coming out of 2021 would provide further upward pressure on average vehicle age. But the pressure was amplified in the back half of 2022 as interest rates and inflation began to take their toll,&#8221; said Todd Campau, associate director of aftermarket solutions for S&amp;P Global Mobility. &#8220;While pressure will remain on average age in 2023, we expect the curve to begin to flatten this year as we look toward returning to historical norms for new vehicle sales in 2024.”
There are presently more than 284 million vehicles in operation on American roads; continual increases in popularity for light-duty trucks will cause the number of passenger vehicles to decline below 100 million for the first time in nearly five decades. Firms in the aftermarket repair sector are slated to experience windfalls as the number of cars between six and 14 years old is forecasted to increase by 10 million in the next five years.
S&amp;P Global linked the higher average vehicle ages in 2022 to “supply constraints that caused low levels of new vehicle inventory” in the first half of the year, followed by “slowing demand as interest rates and inflation reduced consumer demand” in the second half.
Lockdowns and public health mandates imposed over the past three years by governments across the world fostered unpredictable supply chain shocks, contributing to inflation in many countries. Sectors impacted most severely by foreign bottleneck exposure, such as automotive manufacturing, textiles, and basic metals, also witnessed the most extreme inflationary pressures, according to an <a href="https://research.stlouisfed.org/publications/economic-synopses/2022/05/12/supply-chain-disruptions-and-inflation-during-covid-19" target="_blank" rel="noopener">analysis</a> from the Federal Reserve Bank of St. Louis.
Persistent labor shortages that followed the lockdown-induced recession continue to produce difficulties for American companies seeking to hire more workers. There exist roughly 9.6 million job openings and 6.0 million unemployed individuals across the American economy, according to a <a href="https://www.bls.gov/news.release/jolts.nr0.htm" target="_blank" rel="noopener">report</a> from the Bureau of Labor Statistics, reflecting a labor market that has further worsened inflationary pressures as firms increase compensation to attract and retain workers.
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Officials at the Federal Reserve have meanwhile <a href="https://www.dailywire.com/news/federal-reserve-unveils-quarter-point-target-interest-rate-hike-as-banking-system-reels" target="_blank" rel="noopener">increased</a> the target federal funds rate to combat the inflationary pressures: target rates now sit between 5.0% and 5.25%, increasing borrowing costs for consumers, including those who finance their car purchases with debt.
American economic growth slowed to a 1.1% annualized rate in the first quarter, marking a significant decline from previous quarters as the economic headwinds slow recovery from the recession and the interest rate hikes decrease demand, according to an advance <a href="https://www.dailywire.com/news/american-economic-growth-slows-to-1-1-in-first-quarter" target="_blank" rel="noopener">estimate</a> from the Bureau of Economic Analysis.

Cars

Americans Delay Buying New Cars As Long As Possible To Avoid High Prices

Americans Hit By Inflation Delay Buying New Cars As Long As Possible

Supply Chain

The <a href="https://www.dailywire.com/topic/environmental-protection-agency-epa" target="_blank" rel="noopener">Environmental Protection Agency</a> released new <a href="http://dailywire.com/topic/climate-change?_gl=1*tkyqef*_ga*NzUzNDA5ODIxLjE2NzkzMjkzNzM.*_ga_CZKR9ZYKJP*MTY4MzgxMTg1OC4yMDcuMS4xNjgzODEzMDgzLjU5LjAuMA.." target="_blank" rel="noopener">carbon</a> emissions standards for power plants that burn coal and natural <a href="http://dailywire.com/topic/oil-and-gas" target="_blank" rel="noopener">gas</a>, a move which some <a href="http://dailywire.com/topic/energy" target="_blank" rel="noopener">energy</a> experts and lawmakers caution will decrease power reliability and artificially increase electricity <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">costs</a> for households.
The new <a href="https://www.epa.gov/system/files/documents/2023-05/FRL-8536-02-OAR%20111EGU%20NPRM%2020230504_Admin.pdf" target="_blank" rel="noopener">regulations</a> unveiled on Thursday morning would seek to avoid 617 million metric tons of total carbon dioxide emissions through 2042, equal to the emissions produced by half of the nation’s cars, as well as reduce the amount of particulate matter released into the atmosphere. The proposed limits would “require ambitious reductions in carbon pollution based on proven and cost-effective control technologies” at coal and natural gas plants, which account for 60% of power generation in the nation, according to <a href="https://www.eia.gov/tools/faqs/faq.php?id=427&amp;t=3" target="_blank" rel="noopener">data</a> from the Energy Information Administration.
“By proposing new standards for fossil fuel-fired power plants, EPA is delivering on its mission to reduce harmful pollution that threatens people’s health and wellbeing,” EPA Administrator Michael Regan said in a <a href="https://www.epa.gov/newsreleases/epa-proposes-new-carbon-pollution-standards-fossil-fuel-fired-power-plants-tackle" target="_blank" rel="noopener">press release</a>. “EPA’s proposal relies on proven, readily available technologies to limit carbon pollution and seizes the momentum already underway in the power sector to move toward a cleaner future. Alongside historic investment taking place across America in clean energy manufacturing and deployment, these proposals will help deliver tremendous benefits to the American people, cutting climate pollution and other harmful pollutants, protecting people’s health, and driving American innovation.”
The release claimed that the new regulations would produce “climate and public health benefits” worth $85 billion over the next two decades, as well as prevent premature deaths and hospital visits as a result of decreased particulate matter emissions. The new rules had been widely expected for weeks before their public release.
Jason Isaac, a director at the Texas Public Policy Foundation, told The Daily Wire that the new regulations are “far-reaching” and will inevitably raise power costs for households.
“Carbon capture technologies are so expensive that the result will be the sudden retirement of reliable generation, and there will be nothing to replace it,” Isaac said. “This is a prime example of an unelected executive agency run amok, with a single-minded agenda of eliminating fossil fuels and controlling how we produce and consume energy regardless of the costs or consequences, all while doing nothing to mitigate a changing climate.”
The new emissions standards come months after the Supreme Court <a href="https://www.dailywire.com/news/supreme-court-rules-against-bidens-epa-says-agency-does-not-have-authority-to-regulate-carbon-dioxide-emissions" target="_blank" rel="noopener">ruled</a> in West Virginia v. EPA that federal agencies cannot assert “highly consequential power beyond what Congress could reasonably be understood to have granted.” Steve Milloy, a senior legal fellow at the Energy and Environmental Legal Institute, told The Daily Wire that the regulations have “no chance of withstanding” scrutiny from the Supreme Court but noted that a ruling might not come for many years, thereby allowing “much damage” to the power grid.
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The Biden administration has <a href="https://www.whitehouse.gov/climate/" target="_blank" rel="noopener">established</a> a “whole-of-government effort” to reduce carbon emissions in the public and private sectors. Beyond the introduction of additional EPA rules that would aim to <a href="https://www.dailywire.com/news/biden-admin-unveils-proposal-for-landmark-nationwide-crackdown-on-gas-cars" target="_blank" rel="noopener">increase</a> nationwide adoption of electric cars, Energy Secretary Jennifer Granholm recently <a href="https://www.dailywire.com/news/energy-secretary-granholm-supports-making-the-military-all-electric-by-2030" target="_blank" rel="noopener">voiced</a> support for a policy that would transition the military to rely exclusively upon electric vehicles by 2030.
West Virginia Democratic Senator Joe Manchin, a frequent skeptic of Biden administration energy policies, announced on Wednesday that he would <a href="https://www.dailywire.com/news/manchin-shreds-biden-over-expected-crackdown-on-power-plants-reveals-how-he-will-respond" target="_blank" rel="noopener">oppose</a> every EPA nominee from the White House until the power plant rules are reversed.
“This administration is determined to advance its radical climate agenda and has made it clear they are hellbent on doing everything in their power to regulate coal and gas-fueled power plants out of existence, no matter the cost to energy security and reliability,” the lawmaker said.

President Biden

Biden EPA Unveils New Crackdown On Power Plants

Biden EPA Unveils New Crackdown On Coal And Natural Gas Power Plants

Climate Change

Energy

Environmental Protection Agency (EPA)

Politics

The consumer price index rose 4.9% between April 2022 and April 2023, marking a continued decline from elevated <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">inflation</a> even as higher price levels continue to constrain household budgets.
The month-to-month increase of 0.4% was in line with analyst expectations, while core inflation, which factors out the more volatile food and energy categories, also rose 0.4% and is in line with expectations. Food prices were flat and energy prices rose 0.6% while shelter prices, one of the largest contributors to the overall month-to-month increase, rose 0.4%, according to a <a href="https://www.bls.gov/news.release/pdf/cpi.pdf" target="_blank" rel="noopener">report</a> from the Bureau of Labor Statistics.
Despite the slight decrease from the 5.0% headline inflation <a href="https://www.dailywire.com/news/headline-inflation-edges-downward-even-as-costs-for-many-key-items-continue-to-soar" target="_blank" rel="noopener">recorded</a> in March 2023, food and electricity prices have increased 7.7% and 8.4%, respectively, between April 2022 and April 2023.
The latest inflation data comes as officials at the Federal Reserve increased the target federal funds rate in an effort to slow price level increases, a policy regime that raises the cost of borrowing funds for consumers and businesses, thereby lowering inflation, but dampening overall economic activity. Federal Reserve policymakers <a href="https://www.dailywire.com/news/federal-reserve-unveils-quarter-point-target-interest-rate-hike-as-banking-system-reels" target="_blank" rel="noopener">introduced</a> a quarter-point rate hike last week, marking a continued slowdown from previous rate hikes and reflecting caution as the financial sector reels from the <a href="https://www.dailywire.com/news/confidence-in-american-banks-is-low-amid-continued-financial-sector-tumult" target="_blank" rel="noopener">collapse</a> of three medium-sized banks.
Officials at the Federal Reserve have broadly targeted a 2.0% inflation rate and maximum employment over the past four decades. Even amid the elevated price level environment and macroeconomic constraints such as a bottlenecked supply chain, the labor market has been a relative bright spot in the economy: unemployment was charted at 3.4% last month, according to <a href="https://www.dailywire.com/news/unemployment-rate-ticks-down-number-of-jobs-increase-despite-economic-tumult" target="_blank" rel="noopener">data</a> from the Bureau of Labor Statistics released on Friday. Low labor force participation, on the other hand, has worsened inflationary pressures and supply chain constraints as businesses increase wages to fill their payrolls and seek to retain more workers.
Economic growth in the United States slowed to a 1.1% annualized rate in the first quarter, marking a significant decline from previous quarters, according to an advance <a href="https://www.dailywire.com/news/american-economic-growth-slows-to-1-1-in-first-quarter" target="_blank" rel="noopener">estimate</a> released last week by the Bureau of Economic Analysis. Federal Reserve officials have also <a href="https://www.dailywire.com/news/federal-reserve-officials-reveal-when-they-expect-a-recession-to-strike" target="_blank" rel="noopener">concluded</a> that the present instability in the financial system warrants a recession forecast for the latter portion of the year, followed by a predicted recovery over the subsequent two years.
President Joe Biden has repeatedly asserted that his policies are responsible for easing price levels in some product categories, even as inflation remains between three times and four times higher than levels seen at the start of his administration. “We are making progress in the fight against inflation,” he commented in one <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/31/statement-from-president-joe-biden-on-february-pce-report/" target="_blank" rel="noopener">statement</a> released in April. “The fight against inflation isn’t over, and every day my administration is working to give families more breathing room.”
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Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen each previously asserted that rising price levels were a temporary result of the demand increases that followed worldwide government lockdowns. Yellen <a href="https://www.dailywire.com/news/janet-yellen-admits-she-was-wrong-about-inflation-being-small-risk" target="_blank" rel="noopener">admitted</a> last year that she was incorrect due to “unanticipated and large shocks to the economy that have boosted energy and food prices.”

Consumer Prices

Headline Inflation Ticks Downward As Some Product Categories Continue To Surge

Headline Inflation Ticks Downward

<a href="http://dailywire.com/topic/unemployment" target="_blank" rel="noopener">Unemployment</a> reached an historically low 3.4% in April even as the number of new <a href="http://dailywire.com/topic/jobs" target="_blank" rel="noopener">jobs</a> exceeded analysts’ forecasts, according to <a href="https://www.bls.gov/news.release/empsit.nr0.htm" target="_blank" rel="noopener">data</a> from the Bureau of Labor Statistics released Friday, despite a number of <a href="http://dailywire.com/topic/economy" target="_blank" rel="noopener">economic</a> headwinds and indications of slowing growth.
Total nonfarm employment increased by 253,000, surpassing analysts’ expectations of 180,000 new positions but falling below the 290,000 average recorded over the past six months. The recorded 3.4% unemployment rate in April marked a slight decrease from the 3.5% rate in March and is tied for the lowest joblessness level since 1969.
&#8220;Hiring has been slowing, but perhaps not as much as expected given the headwinds of persistent inflation, the steep increase in interest rates, and financial strains associated with bank failures,” Bankrate Senior Economic Analyst Greg McBride said in comments provided to The Daily Wire.
The scientific and technical services sector added 45,000 new positions, while the business services sector added 43,000 new positions and the healthcare sector added 40,000 new positions. Job losses occurred in temporary help services, which lost 23,000 positions.
The labor market has widely been considered a bright spot in an otherwise dismal economic landscape marked by record inflation and persistent supply chain bottlenecks. Low labor force participation across the economy, on the other hand, has worsened both trends as businesses raise wages to fill their payrolls and attract or retain more workers.
Robust demand for workers occurs even as pay increases more slowly than price levels, causing a decrease in purchasing power for households. Wages increased 4.4% on an annual basis as of April, surpassing expectations of 4.2% but falling below the 5.0% inflation rate recorded for March, according to <a href="https://www.dailywire.com/news/headline-inflation-edges-downward-even-as-costs-for-many-key-items-continue-to-soar" target="_blank" rel="noopener">data</a> from the Bureau of Labor Statistics.
The most recent unemployment report was unveiled amid continued unease in the financial sector: Silicon Valley Bank and Signature Bank, where the majority of customers maintained account balances above the Federal Deposit Insurance Corporation threshold, collapsed in March as users rushed to withdraw funds. First Republic Bank was obtained and subsequently sold by regulators on Monday, while PacWest executives <a href="https://www.dailywire.com/news/federal-reserve-just-said-banks-are-sound-and-resilient-another-one-might-collapse" target="_blank" rel="noopener">announced</a> the possibility of a sale this week and other regional banks with reduced deposit levels faced <a href="https://www.dailywire.com/news/several-regional-banks-face-market-turmoil-after-first-republic-collapse" target="_blank" rel="noopener">turmoil</a> on the stock market.
Federal Reserve officials meanwhile <a href="https://www.dailywire.com/news/federal-reserve-unveils-quarter-point-target-interest-rate-hike-as-banking-system-reels" target="_blank" rel="noopener">announced</a> a quarter-point increase in the target federal funds rate, a move which increases the cost of borrowing money such that inflationary pressures decrease, even as businesses assume less debt and decrease hiring.
&#8220;The Federal Reserve indicated this week that it is non-committal on the question of further interest rate increases,” McBride continued. “Next week’s inflation readings, including the Consumer Price Index, will be important to watch.&#8221;
American economic growth slowed to a 1.1% annualized rate in the first quarter, marking a significant decline from previous quarters as interest rate hikes dampen economic activity, according to an advance <a href="https://www.dailywire.com/news/american-economic-growth-slows-to-1-1-in-first-quarter" target="_blank" rel="noopener">estimate</a> released last week by the Bureau of Economic Analysis. Federal Reserve officials <a href="https://www.dailywire.com/news/federal-reserve-officials-reveal-when-they-expect-a-recession-to-strike" target="_blank" rel="noopener">concluded</a> that the instability in the financial system warrants a recession forecast for the end of the year, followed by a predicted recovery over the subsequent two years.
Interest rate hikes contributed to the substantial loss incurred by Silicon Valley Bank as executives liquidated a long-term bond portfolio to cover withdrawals. Assets in the banking system are $2 trillion lower than their book value as a result of Federal Reserve efforts to implement the current rollback in monetary stimulus, according to a recent <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">study</a> from analysts at the National Bureau of Economic Research.

Grocery Store

Unemployment Rate Ticks Down, Number Of Jobs Increase Despite Economic Tumult

Unemployment Rate Ticks Down Despite Economic Tumult

Jobs

Unemployment

Officials at the <a href="http://dailywire.com/topic/federal-reserve" target="_blank" rel="noopener">Federal Reserve</a> announced a 0.25% increase in the target <a href="http://dailywire.com/topic/interest-rates" target="_blank" rel="noopener">federal funds</a> rate on Wednesday, marking a slowdown from previous rate hikes meant to combat <a href="http://dailywire.com/topic/inflation" target="_blank" rel="noopener">inflation</a>, even as the financial sector contends with the collapse of three medium-sized regional <a href="http://dailywire.com/topic/banks" target="_blank" rel="noopener">banks</a>.
Rate hikes increase the cost of borrowing money, decreasing inflationary pressures as consumers and businesses assume less debt but simultaneously slowing the economy. Federal Reserve officials formerly set interest rate targets as low as 0.0% during the lockdown-induced recession to stimulate economic activity; rate targets now sit between 5.0% and 5.25%.
The Federal Open Market Committee said in a <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230503a.htm" target="_blank" rel="noopener">statement</a> that officials will &#8220;take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments&#8221; as they consider future actions to decrease price pressures.
Central bankers <a href="https://www.dailywire.com/news/breaking-federal-reserve-hikes-target-interest-rates-half-a-percentage-point" target="_blank" rel="noopener">raised</a> rates by 0.75% on four occasions before implementing a 0.5% hike at the end of last year. Officials also <a href="https://www.dailywire.com/news/federal-reserve-hikes-target-interest-rates-by-quarter-point-as-officials-balance-fighting-inflation-and-protecting-banks" target="_blank" rel="noopener">hiked</a> rates 0.25% two months ago.
The most recent target rate increase occurs after inflation reached 5.0% two months ago, according to <a href="https://www.dailywire.com/news/headline-inflation-edges-downward-even-as-costs-for-many-key-items-continue-to-soar" target="_blank" rel="noopener">data</a> from the Bureau of Labor Statistics, marking relief from the 9.1% rate seen last summer even as costs for many items remain elevated and wage increases fail to keep pace with price levels. Record inflation coincides with supply chain bottlenecks and labor shortages, which have forced firms to increase prices on consumers over the past two years.
American economic growth meanwhile slowed to a 1.1% annualized rate in the first quarter, marking a significant decline from previous quarters as the headwinds slow recovery from the recession, according to an advance <a href="https://www.dailywire.com/news/american-economic-growth-slows-to-1-1-in-first-quarter" target="_blank" rel="noopener">estimate</a> from the Bureau of Economic Analysis.
The rate hike announcement also comes days after First Republic Bank collapsed, passed into Federal Deposit Insurance Corporation receivership, and was <a href="https://www.dailywire.com/news/jpmorgan-chase-the-nations-largest-bank-acquires-first-republic-bank-after-government-takeover" target="_blank" rel="noopener">sold</a> by regulators to JPMorgan Chase. Several other regional banks, including PacWest, Zions, Comerica, and Western Alliance, faced <a href="https://www.dailywire.com/news/several-regional-banks-face-market-turmoil-after-first-republic-collapse" target="_blank" rel="noopener">turmoil</a> on the stock market this week as the sector continues to reel from the sudden collapses of Silicon Valley Bank and Signature Bank two months ago.
Interest rate hikes contributed to the substantial loss incurred by Silicon Valley Bank as executives liquidated a long-term bond portfolio to cover withdrawals. Assets in the banking system are $2 trillion lower than their book value as a result of Federal Reserve efforts to implement the current rollback in monetary stimulus, according to a recent <a href="https://www.dailywire.com/news/banking-system-is-sound-and-government-will-back-deposits-at-smaller-banks-yellen-promises" target="_blank" rel="noopener">study</a> from analysts at the National Bureau of Economic Research.
Officials at the Federal Reserve <a href="https://www.dailywire.com/news/federal-reserve-officials-reveal-when-they-expect-a-recession-to-strike" target="_blank" rel="noopener">concluded</a> that the volatility in the financial system warrants a recession forecast for the end of the year, followed by a predicted recovery over the course of the subsequent two years. Policymakers also estimated that the historically low unemployment rate would rise toward the beginning of next year.
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“If the effects of the recent developments in the banking sector on macroeconomic conditions were to abate quickly, then the risks around the baseline would be tilted to the upside for both economic activity and inflation,” minutes from a recent meeting said. “If banking and financial conditions and their effects on macroeconomic conditions were to deteriorate more than assumed in the baseline, then the risks around the baseline would be skewed to the downside for both economic activity and inflation, particularly because historical recessions related to financial market problems tend to be more severe and persistent than average recessions.”

Federal Reserve Unveils Quarter-Point Target Interest Rate Hike As Banking System Reels

Federal Reserve Unveils Quarter-Point Rate Hike As Financial Sector Reels

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