What we’re reading (6/20)
“Tight Labor Market Returns The Upper Hand To American Workers” (Wall Street Journal). “Low-wage workers found something unexpected in the economy’s recovery from the pandemic: leverage. Ballooning job openings in fields requiring minimal education—including in restaurants, transportation, warehousing and manufacturing—combined with a shrinking labor force are giving low-wage workers perks previously reserved for white-collar employees. That often means bonuses, bigger raises and competing offers.”
“Markets To The Fed: Your Hawkish Turn Isn’t Fooling Anyone” (Barron’s). “The Federal Open Market Committee’s latest policy communications raised more questions than answers. Perhaps the biggest one: Can the Fed ever really raise interest rates? At face value, and with a big dose of relativity, this past week’s updated summary of economic projections and commentary from Chairman Jerome Powell marks a hawkish turn…[b]ut when you take a step back, the Fed remains about as dovish as ever. When the consumer-price index is running at 5%, it’s hardly hawkish to say there is a chance price acceleration is faster and lasts longer than anticipated. It already is, and it already has.”
“HSBC Offers Sub-1% Mortgage As Interest Rate War Intensifies” (The Guardian). “HSBC has become the latest lender to offer a mortgage deal with an interest rate of less than 1% in the latest sally of an intensifying mortgage rate war. Banks and building societies are fighting for customers in a frenzied property market, described by the Bank of England’s chief economist as ‘on fire’ as the government’s stamp duty holiday combines with big deposits saved during lockdown to ramp up demand.”
“The Housing Market Is On Fire. The Fed Keeps Adding Gasoline” (CNN Business). “Bidding wars. All-cash offers. Homes selling for $1 million over asking. The housing boom has officially reached the ridiculous stage. Despite surging home prices that are rising at the fastest pace on record, the Federal Reserve continues to prop up the housing market by purchasing $40 billion of mortgage bonds each month. And while the Fed is finally ‘talking about talking about’ removing some of its support, some fear the US central bank is creating another housing bubble as it deliberates.”
“Actually, The Pandemic Made Americans Richer” (Business Insider). “Today, a huge swath of Americans are better off financially than they were before the pandemic started. A Pew Research report in March found that 30% of adults said their personal finances had improved since January 2020. Another 50% said their financial situation remained just as good as before. And the sunny outlook extends to nearly everyone: men and women, old and young, and Americans of all races and education levels. Even two-thirds of those who earn less than $39,000 a year said their finances were just as good or better than before the pandemic hit.”
