This week’s financial news has been dominated by the defense bill and the $1.65 trillion spending bill. Both bills have passed the House and Senate and were sent to President Biden’s desk for signature. President Biden is expected to sign the bills to avert a government shutdown and fund the government for the rest of the fiscal year. The enormous spending bill has been widely debated due to some of its focus areas, especially the billions of dollars allocated toward the Ukraine conflict. Furthermore, Ukrainian President Zelensky conducted a speech to congress thanking the U.S. for its support and the need for more funding. His address appears to have worked, as U.S. support for Ukraine seemed to be little changed as the bill passed through both houses.
The 4,100-page $1.7 trillion spending bill focused on an array of areas, including nearly $45 billion to Ukraine, changed the retirement account minimum mandatory withdrawal age to 75 instead of 72, and gave the Environmental Protection Agency an additional $500 million in funding, to name a few. One large portion of the bill was a 4.6% pay raise for military troops. This is a significant raise for the troops and is coming at a critical time as everyday families face historical inflation. Additional components of the bill included:
- Government restrictions on using TikTok.
- Changes to COVID mandates (especially for the military).
- Increased childcare funding.
- Congressional security funding.
The bill is still waiting for the President’s signature but is expected to be signed in the coming days.
Gas prices across the country decreased sharply over the past few months but remained relatively elevated from a year ago. The decrease is still a welcoming reprieve as inflation remains high, and the country still faces increased costs for almost everything. There’s no doubt that the combination of high prices and inflation has caused many families to adjust their spending for the holiday season.
Additionally, news coming out this week regarding the housing market was generally undesirable. According to the National Association of Realtors, building permits fell roughly 11%, and existing home sales dropped nearly 8% for November. While inflation has continued to rage through the Federal Reserve’s interest rate hikes, the housing market has clearly been affected. As interest rates have risen sharply over the past few months, home buyers have given pause to taking out mortgages at such a high rate. On a more positive note, inventory has slowly increased, and homes are staying on the market longer. The days of massive offers over listing prices are gone as the economy has slowed and the cost to borrow money has increased.
Another big topic in the past couple of weeks is the collapse of crypto FTX, run by Sam Bankman. According to the Securities and Exchange Commission (SEC), FTX took nearly $2 billion from investors and developed a strategy to defraud investors/customers for multiple years. The ruin of FTX sent shockwaves across the crypto sector and sparked discussion on the safeguards and credibility of other companies that deal in cryptocurrency. Further complicating the FTX fallout is Sam Bankman partnered with multiple organizations and athletes, including NBA, MLB, Tom Brady, and Steph Curry. While it’s unlikely there’ll be any severe negative fallout for these individuals, the situation will give many organizations and celebrities pause before partnering. For some of the big crypto companies, there’s been a significant drop in their prices compared to a year ago. Has a crypto bubble burst this year, or is it simply a negative perception bringing down the price? Many investors still believe in crypto, but I highly recommend researching before investing to ensure it’s best for you and your financial goals.
For much of the Midwest and East coast, cold weather and snow are hindering families during their travels. Ensure to stay safe and check on families during these times. Have a Merry Christmas and a wonderful New Year! We’ll see what the New Year brings us, and hopefully, it’s financial prosperity.