Fitch Ratings knocked down the U.S.’s credit rating from AAA to AA+ last week, citing the country’s ever-growing debt load and an “erosion of governance,” especially in fiscal management.
Tag: U.S. Economy
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U.S. ADDS FEWER JOBS IN JULY THAN PREDICTED. GOOD NEWS FOR INTEREST RATES?
The U.S. economy sprouted 187,000 additional jobs in July, slightly lower than the 200,000 that many economists had expected and well below 2022’s average of 400,000 a month.
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JUNK-RATED COMPANIES KEEP SELLING BONDS BUT ON TOUGHER TERMS
American Airlines, Six Flags, and other companies whose credit ratings have been down-rated to junk keep selling bonds. New issues this year through early August have totaled $91 billion, Bloomberg calculated, 35 percent more than the same period a year ago.
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ECONOMIC UPDATE – MARKET OVERVIEW
As we have been forecasting, with interest rates rising, not only would depositors take their money out of banks and invest it money market funds and high-yielding Treasuries, but more importantly, the socioeconomic and geopolitical damage inflicted upon humanity by politicians who launched the COVID War, would also devastate much of the banking system.
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THE MOST JUNK BONDS IN THREE YEARS HAVE BEEN DOWN-RATED
In March, April, and May, 120 junk-bond issues worth a total of $136 billion saw their credit ratings downgraded, more than at any time since 2020 during the heat of the COVID War, JPMorgan reported.
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TWO MORE U.S. BANKS BITE THE DUST
The troubled PacWest Bancorp, which wobbled in the wake of the mid-March failure of Signature and Silicon Valley banks, has been sold to Banc of California, a smaller competitor, in a stock swap.
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VALUE OF COMMERCIAL REAL ESTATE LOANS SHRINKS
For the first time in two years, the monthly value of outstanding commercial real estate loans shrank in June, dropping to $5.44 trillion, Capital Economics reported.
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INFLATION IS FALLING BUT MAJOR BRANDS KEEP RAISING PRICES
Coca-Cola, Pepsico, and Unilever are among many familiar brands that have raised prices sharply this year while posting comfortable profits, according to a Wall Street Journal report.
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IS HOUSING RECESSION OVER?
The U.S. housing market’s recession is over, Lawrence Yun, chief economist for the National Association of Realtors (NAR), said in a statement last week.
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FED RAISES INTEREST RATE TO 22-YEAR HIGH
On 26 July, the U.S. Federal Reserve’s Open Market Committee voted unanimously to add another quarter point to its interest rates, raising them to 5.25 percent on deposits and 5.5 percent on loans, their highest since 2001.