Some U.S. government bonds are paying the highest interest rates since 2007 when the Great Recession loomed. Rates have risen to try to hold investors, who have been fleeing the bonds in expectation that interest rates will rise further as the Iran War enters its fourth month.
The U.S. economy grew just 1.6 percent in this year’s first quarter, the commerce department said last week, revising its earlier estimate of a 2-percent expansion.
In April, the U.S. savings rate – the amount of money a household has left after expenses and paying taxes – fell to 2.6 percent of income, one of the smallest proportions since the 1960s.
American households are spending an average of $447.19 a month more in engine fuel since the Iran War began, Moody’s Analytics told CNBC. That totals an extra $60 billion out of pocket nationwide.
Credit card accounts 90 days or more behind on payments rose to 13.12 percent in this year’s first quarter, the most since 2011 during the throes of the Great Recession, according to the Federal Reserve Bank of New York.
With money from tax refunds ebbing and the Iran War’s energy shock permeating the economy, American consumers will enter a cash crunch in coming months, economists and business leaders are warning.
The three major U.S. stock indexes all closed last week at record highs after setting new intraday records as well.
Investors took hope from signs that the U.S. and Iran were moving closer to a peace agreement.
The number of purchase contracts for U.S. homes grew by 1.4 percent in April from March, beating analysts’ forecast of a 1-percent bump, the National Association of Realtors (NAR) reported.
A new Wall Street stock rally began in April when a nominal ceasefire in the Persian Gulf War lured traders back into the market.