President Biden's budget for 2025 proposes expanding free community college access, raising Pell Grants, and creating a "Reducing the Costs of College Fund." These initiatives aim to make higher education more affordable and accessible, following the Supreme Court's rejection of the student loan forgiveness plan. This move contrasts with the cuts proposed by Biden's potential Republican opponent, Trump, during his presidency and reflects Biden's commitment to education and reducing student debt.
The IRS has launched a free tax filing program called Direct File that covers about one-third of federal tax returns. The program is currently open in 12 pilot states and supports simple tax situations. The Treasury Department estimates that 100,000 filers will participate this year. Within five years, the program could save the average filer $160 per year.
Women earn significantly less than men over their careers, with the gap widening for Black and Latina women. While the pay gap has not seen much progress, measures such as pay transparency and addressing systemic bias can help close it. Employers should take responsibility for examining and addressing pay disparities within their organizations. Women should also be proactive in monitoring workplace practices and advocating for fair pay.
Consumers increasingly doubt the Federal Reserve can achieve its inflation goals anytime soon, according to a survey. This is because longer-term inflation expectations have risen, with the three-year outlook increasing to 2.7% and the five-year outlook jumping to 2.9%. This is well ahead of the Fed's 2% goal for 12-month inflation, indicating that the central bank may need to keep policy tighter for longer.
Housing affordability is a major issue for many Americans. High mortgage rates are only part of the problem, as stagnant wages and strict building regulations also contribute. Restrictive land-use and zoning regulations significantly reduce housing supply, driving up prices. To address the crisis, the administration is providing incentives to expand housing construction, and local governments may need to relax zoning restrictions to allow for more affordable housing options.
Headline inflation is forecast to show a 0.4% monthly increase and 3.1% year-over-year gain, with core inflation predicted at 0.3% monthly and 3.7% annually. This resilience may prevent Fed rate cuts at the next meeting. Rising gasoline prices have contributed to inflation, reinforcing the Fed's cautious approach to interest rate reductions.
Consumer spending rebounded noticeably in February, despite being corrected for the extra spending day, leap day. The Retail Monitor's core measure, excluding autos, gas, and restaurants, rose 0.95%. Sporting goods, hobby, and health and personal care stores performed exceptionally well, with online and nonstore sales continuing to surge.
Texas Central aims to introduce a high-speed bullet train from Dallas to Houston, reducing travel time to 90 minutes. Despite facing delays and a hefty cost of $33.6 billion, the project has gained support from Amtrak, Japan, and the Biden Administration's $66 billion passenger rail investment. The project faces challenges, including opposition from landowners concerned about eminent domain, as well as skepticism about its viability and potential impact on existing rail infrastructure.
Inflation remains persistent, with key indicators above expectations. Core CPI rose 0.4% monthly and 3.8% annually, driven by energy and shelter costs. Despite some price declines, such as medical care, inflation remains above the Fed's 2% target. The Fed may delay lowering interest rates until it achieves greater confidence in inflation's decline. Strong job growth and consumer spending, while positive for the economy, also raise concerns about inflation's resilience.
Oracle exceeded earnings estimates, its cloud services revenue growing 12%. Vail Resorts missed estimates and reduced guidance due to low snowfall. Asana reported better-than-expected results with revenue exceeding estimates. Third Point and Saddle Point acquired a stake in Advance Auto Parts, resulting in a settlement that secures them three board seats.
China experienced inflation in February (0.7% year-on-year) after months of deflation. Despite this, some analysts believe deflation still looms and consumers remain cautious. However, Shaun Rein of China Market Research Group suggests investors consider re-entering the Chinese market as valuations are low. China's economic challenges over the past year have led to declines in stock markets, but Rein believes long-term growth prospects are promising, especially in domestic neighborhood electric vehicle manufacturers.
Xiaomi, the Chinese smartphone giant, has finally announced the official launch date of its much-anticipated electric car: March 28th. The car, called the SU7, was originally unveiled in December, but details on pricing and delivery were kept under wraps. Now, Xiaomi has revealed that the SU7 "will be delivered as soon as it is launched." The company is also targeting the premium segment with the car, and deliveries could begin as soon as the second quarter of this year.
