Credit Sesame’s personal finance news roundup February 22, 2025. Stories, news, politics, and events impacting personal finance during the past week.
FDIC forced to fire new recruits
The Federal Deposit Insurance Corporation (FDIC) fired an undisclosed number of recent hires. The terminations were part of personnel cuts mandated by Elon Musk’s Department of Government Efficiency. The number of staff cuts was not made public, though it is thought it could affect as many as 500 FDIC employees. This will be a setback for the agency, which has already struggled with chronic staff shortages in recent years. The FDIC oversees bank finances to guard against failures and maintains the insurance fund that protects deposits. See article at Reuters.com.
Missed payments may be an early sign of dementia
According to the National Institute on Aging, people in the early stages of dementia often start missing credit card or mortgage payments years before they are diagnosed with the disease. In a study that looked at 17 years’ worth of data on 2.5 million older adults, trends such as higher payment delinquencies and falling credit scores appeared as much as five years before diagnosis. The problems seemed to become more acute as people got closer to having the illness diagnosed. In the year leading up to diagnosis, people who were eventually found to have Alzheimer’s disease or a related dementia showed a 34% increase in the likelihood of missing a credit card payment. They became 17% more likely to miss a mortgage payment. See news release at NIH.gov.
Fed minutes show next rate cut may be delayed
Going into 2025, the Federal Reserve had planned to cut interest rates by 0.50% over the year. However, minutes from their January meetings suggest those plans may be on hold for the foreseeable future. The reason is rising concern about inflation. Some measures of inflation have already started edging up. Worse, business leaders tell the Fed that they plan to try to pass increased costs from tariffs along to their customers in the form of price increases. See article at Reuters.com.
Republican lawmakers aim to repeal limits on overdraft fees
Representative French Hill and Senator Tim Scott have introduced legislation to overturn the Consumer Financial Protection Bureau’s (CFPB) cap on overdraft fees. The CFPB had recently created a rule capping those fees at $5 per occurrence. Previously, they had averaged close to $35. The proposed legislation would return to allowing banks to charge whatever they chose for overdrafts. See article at MSN.com.
Mortgage rates continue to inch downward
30-year mortgage rates fell slightly last week. They declined by 0.02% to reach 6.85%. This was their fifth consecutive weekly decline, but since the declines have been slight, they’ve fallen by just 0.19%. Previously, 30-year rates had risen for five weeks in a row, totaling a 0.44% increase. Despite the recent downward trend, 30-year rates remain 0.77% higher than at the end of last September. See rate details at FreddieMac.com.
New home mortgage applications down year-over-year
January 2025 data shows mortgage applications for new homes fell 6% from a year ago. The MBA estimates an annualized 616,000 new home sales for January, reflecting softer demand amid higher rates or affordability concerns. Applications for FHA mortgages represented 30% of total applications in the month. That’s the highest share of FHA mortgages in the history of the MBA’s survey. See news release at MBA.org.
Leading Economic Index declined in January 2025
The Conference Board’s Leading Economic Index (LEI) fell by 0.3% in January. That decline was enough to wipe out a 0.1% increase in December. Deteriorating consumer outlook for business conditions and a decline in manufacturing hours worked contributed to the decline. With January’s decline, the LEI has fallen by 0.9% over the past six months. The LEI is designed to signal significant turning points in the business cycle and the near-term direction of the economy. See news release at Conference-Board.org.
Housing starts slowed sharply last month
Construction of privately owned housing units slowed at a seasonally adjusted rate of 9.8% in January 2025 compared to December 2024. Year-over-year, housing starts have declined by 0.7%. Construction of housing units increased in the Midwest and South over the past 12 months but has declined in the Northeast and West. See housing start data at Census.gov.
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