Inflation rose despite predictions of a decrease in August, and the stock market didn’t take it well. We’ll also look at Congress attempting to avert "economic catastrophe" and see how much child poverty fell thanks to the Child Tax Credit.
But first, learn more about the devastating effects of droughts in Utah.
An unexpected inflation jump in August set stocks plunging Tuesday as Wall Street braced for steeper Federal Reserve rate hikes and a potential economic slowdown.
“US stocks are crumbling after a very hot inflation [report] has Wall Street nervous that they were too optimistic in forecasting the end of the Fed’s tightening cycle,” wrote Edward Moya, senior market analyst at trading firm OANDA.
Sylvan has more on the market sell-off here.
📉 BREAKING DOWN THE DATA
Markets began selling off after the Labor Department reported a 0.1 percent increase in the CPI, a closely watched gauge of inflation, in August.
“Today’s higher-than-expected CPI reading shows that we still have a long way to go before inflation returns to more normal levels,” said Scott Brave, lead consumer spending economist at Morning Consult, in a Tuesday analysis.
Here’s more on the report from Sylvan.
⏳ AWKWARD TIMING
The stock market meltdown and inflation increase didn’t stop the White House from holding a celebration for the passage of President Biden’s Inflation Reduction Act.
Biden, in remarks to a crowd of more than 1,000 people, called the bill the “single most important legislation passed in the Congress to combat inflation, and one of the most significant laws in our nation’s history, in my view.”
“With this law, the American people won, and special interests lost,” Biden declared.
But the party-like atmosphere masked the reality that Biden must still manage a precarious economy that threatens his positive message heading into the midterms.
The Hill’s Alex Gangitano and Brett Samuels take us to the White House here.
You’re Invited: A New Housing Market: Affordability, Access & Equity, Tuesday, Sept. 20 at 8 a.m. ET
The housing market, spurred by two years of red-hot demand and dwindling home supply, is finally cooling down. And while staggering mortgage rate hikes for homebuyers have dominated recent headlines, the rental market is seeing its own share of dramatic price increases and competition. What is the current landscape of American housing, and how are ballooning interest rates and rent costs impacting American families? Reps. Emanuel Cleaver (D-Mo.) and French Hill (R-Ark), National Low Income Housing Coalition’s Diane Yentel, Realtor.com chief economist Danielle Hale and Urban Institute’s Janneke Ratcliffe. RSVP today to attend in-person or get livestream link.
OFF THE RAILS
Lawmakers are under pressure to avert a rail worker strike as soon as this week that would batter the nation’s economy just before November’s midterm elections.
Republican senators introduced a resolution to impose a new contract if negotiations between railroads and unions collapse, while Democrats say they would pass legislation to block a rail shutdown if necessary.
Business Roundtable CEO Joshua Bolten said Tuesday that the big business group is “deeply concerned about the potential for economic catastrophe” if talks are not resolved by Thursday night.
Karl has more here.
🧒🏻 CTC STUDY
Child poverty fell by 46 percent in 2021 amid tax credit expansion
Child poverty in the United States fell by 46 percent in 2021, a record low achieved largely by expanding the child tax credit, according to new data released by the U.S. Census Bureau.
The data shows 5.2 percent of children were in poverty in 2021, down significantly from the 9.2 percent of impoverished children the previous year.
The Hill’s Zach Schonfeld has more here.
Twitter shareholders on Tuesday approved a $44 billion merger agreement with Elon Musk, though the deal remains in limbo as a lawsuit between the social media company and the SpaceX CEO moves through a Delaware court.
During the special meeting, the shareholders also approved a measure relating to compensation for Twitter executives resulting from the merger agreement.
Here’s what else we have our eye on:
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.