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News
How inflation and higher interest rates changed car buying
The Federal Reserve’s battle to taper inflation by ratcheting up interest rates is limiting who can afford to purchase a new or used vehicle. The rate hikes have many Americans lowering their buying expectations, opting for used vehicles over new, or fixing their current car or truck instead of purchasing a replacement. It’s hitting lower-income consumers, with credit scores below 620, the hardest, according to data insights firm Cox Automotive.
Americans owe $1 trillion in credit card debt
America’s credit card balance has passed $1 trillion, or it’s about to, depending on whom you ask. The average interest rate on a new card is 24 percent, the highest figure since the Reaganomics era. A typical American household now carries $10,000 in credit card debt, by one estimate, another record. If that doesn’t sound like a lot of debt, try paying it off. At $250 per month, with 24 percent interest, you’ll be making payments until 2030, and you’ll spend a total of $20,318, twice what you owed. And that assumes you never use the card again.
The Economic Nationalists Are Wrong: Free Trade Means Freedom and Prosperity
Recently, I had the pleasure of attending a debate about the morality of capitalism between James Otteson and Michael Anton, a defender of economic nationalism. Otteson made a good case for capitalism; however, Anton derailed the debate by choosing to focus on specific policies rather than ethical concerns. Ironically, Anton admits that he has hardly ever picked up an economics textbook. Throughout the debate, Anton made claims that were either misleading or false. I will address the most egregious here.
Sterling crisis ahead!
This article points to the factors driving sterling gilt yields higher. They are likely to lead to a sterling crisis as foreign selling gathers pace of gilts acquired since 2018. Before interest rates began to rise, foreign buyers had enjoyed higher gilt prices which more than offset losses on sterling. That is no longer the case. Instead, there is growing disaffection with the Bank of England’s performance and perhaps a realization that a general election in only 18 months’ time introduces political risk.