Interest Rates High for Longer
The economy is proving more resilient and inflation more stubborn than economists expected a few months ago, and as a result the Federal Reserve will keep interest rates high for longer, according to The Wall Street Journal’s latest survey of economists.
Small and midsize U.S. banks lost hundreds of billions of dollars in recent weeks to their bigger peers and to money-market funds offering higher yields. That is likely to force many of them to increase the interest rates they are paying to avoid losing more customers.
The Commerce Department reported that U.S. retail sales fell 1% month-over-month in March, the second straight month of decline. The data suggests higher interest rates are starting to affect consumers, who spent less on goods like cars, furniture, and appliances.
Goldman Sachs economists now estimate, based on tax receipts, that the U.S. will hit the debt ceiling by early June, rather than August as previously projected.
The National Association of Realtors reported the median existing-home sales price in the U.S. was $375,700 in March – down 0.9% year-over-year, the largest annual price drop since January 2012. Sales of previously owned homes decreased 2.4% from February and were down 22% year-over-year.
The Department of Labor reported that initial jobless claims – a proxy for layoffs – rose by 5,000 week-over-week to a seasonally-adjusted 245,000 claims the prior week, potentially a sign the economy is starting to cool as the Federal Reserve raises interest rates to tamp down demand and reduce inflation.
For many people, the idea of stopping work is a nonstarter – an inevitable path to boredom, ill health, and a life devoid of meaning. The Wall Street Journal talked with some of them and shared what they had to say.
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