A new analysis shows that President Biden’s student loan forgiveness plan could be headed straight for your wallet. The Committee for a Responsible Federal Budget is warning that the executive order could worsen already surging inflation. However, not all economists agree. “The end of the moratorium will weigh on growth and inflation, while the debt forgiveness will support growth and inflation,” Moody’s Analytics chief economist Mark Zandi told CNN. “The net of these cross-currents is largely a wash.”
Fox Business/Megan Henney
Biden student loan handout could worsen inflation crisis, analysis shows
President Biden on Wednesday announced plans to cancel student loan debt for millions of borrowers nationwide, but the relief effort could ultimately exacerbate the ongoing inflation crisis, according to a new analysis.
The Committee for a Responsible Federal Budget (CRFB), a nonprofit based in Washington, argued that Biden’s executive order — which will wipe out $10,000 in debt for borrowers earning less than $125,000 and $20,000 for Pell grant recipients — could inflame inflation, which is already hovering near a four-decade high.
“This announcement is gallingly reckless, with the national debt approaching record levels and inflation surging, it will make both worse,” said Maya MacGuineas, CRFB president. “Policymakers have already spent $300 billion on student debt relief — none of it paid for — and this would add another $400 to $600 billion, again, none of it paid for.”
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CNN Business/Matt Egan
What Biden’s student debt plan will do to the US economy
President Joe Biden’s student loan plan is a potential game changer for Americans drowning in debt. And yet the impact on the economy at large is likely to be so tiny that it will be hard to measure.
Biden announced Wednesday that his administration will forgive $10,000 for borrowers who make less than $125,000 per year. Low-income borrowers who went to college on Pell Grants will receive up to $20,000 in student loan forgiveness.
This debt relief will give tens of millions of borrowers some breathing room at a time when the cost of living has skyrocketed.
Critically, the cancellation of student debt is being paired with a plan to lift the freeze on federal student debt payments, beginning in January 2023. That means many Americans who haven’t had to pay down student loans since March 2020 will have to begin doing so, eating into their cash flows.
Continue reading, here.
Kitco News/Cornelius Chrisitan
Jackson Hole 2022: This is what to expect – Gary Wagner
On Friday, Federal Reserve Chairman Jerome Powell will give his speech at the annual Jackson Hole Symposium in Wyoming.
The widely anticipated event will give hints about upcoming Fed policy.
To help market participants, Powell will need to be clear about when the Fed will stop raising rates, said Gary Wagner, editor at TheGoldForecast.com.
Wagner spoke with David Lin, Anchor and Producer at Kitco News.
“The main thing [market participants] want to understand is at what point will the Federal Reserve stop raising rates… and more importantly, at what point will they start to unwind or, in other words, reduce the Fed Funds rate,” said Wagner.
You can keep reading, here.