Seniors could see a larger bump to their Social Security benefits next year. According to CNBC, based on estimates from the recent Consumer Price Index, there could be as much as a 6.1% cost-of-living adjustment in 2022. That would be the biggest increase since 1983. However, a bill that has been reintroduced in Congress proposes changing how those annual increases are calculated. In other news, gold and silver prices are trading near steady in early U.S. dealings, and Fed Chair Jerome Powell said that a report on a digital dollar could be coming this fall.
Inflation could prompt largest Social Security cost-of-living adjustment in decades. Why there’s a push to change the way it’s calculated
The Social Security cost-of-living adjustment for 2022 could be 6.1% due to inflation, according to a new estimate.
That would be the biggest increase since 1983, according to non-partisan advocacy group The Senior Citizens League, which calculated the figure. It’s also a bump up from last month’s estimate, when the increase for next year was expected to be 5.3%.
The new estimate comes as the Consumer Price Index in June increased 5.4% from a year earlier, the largest gain since August 2008. Higher food and energy prices were among the culprits that helped push the inflation measure higher.
That helped push estimate the Social Security COLA for 2022 higher. That annual change is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.
Gasoline is particularly heavily weighted in the CPI-W, which helped to push up the COLA estimate. Many seniors are also noticing higher prices at their grocery stores, according to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.
The COLA could be subject to change, as there are still three more months of data to report before the Social Security Administration determines the official number for next year.
One thing unlikely to happen during that time is any action from the Federal Reserve. Central bank Chairman Jerome Powell said on Wednesday that the Fed is still “a ways off” from changing its policy.
You can read the full article, here.
Kitco News/Jim Wyckoff
Gold, silver see steady price action ahead of Powell, round 2
Gold and silver prices are trading near steady in early U.S. dealings Thursday. The marketplace awaits Federal Reserve Chairman Jerome Powell’s testimony to a Senate committee after he leaned easy on monetary policy when speaking to a House of Representatives panel on Wednesday. August gold futures were last up $1.40 at $1,826.40 and September Comex silver was last up $0.044 at $26.315 an ounce.
Global stock markets were mixed to weaker overnight. The U.S. stock indexes are pointed toward mixed openings when the New York day session begins. The market place is digesting Powell’s testimony Wednesday. He leaned dovish on U.S. monetary policy by saying the Fed is still a ways off on tapering its bond-buying program (quantitative easing). He also said the U.S. central bank still believes rising inflation is only transitory. Focus today will be on his answers to lawmakers’ questions after he released a statement on Wednesday, before speaking to the House panel.
In overnight news, China’s economic growth pace slowed in the second quarter, at up 7.9%, year-on-year. That number is still strong by all standards but does hint that China’s strong economic rebound from the pandemic is leveling off. China’s GDP was up 18.3% in the first quarter. China also reported its industrial production rose a higher-than-expected 8.3% in June.
You can keep reading, here.
Fox Business/Brittany De Lea
Fed Chair Powell hints on digital dollar timing
Federal Reserve Chairman Jerome Powell said that the central bank was advancing research and public outreach regarding its own digital dollar – and a white paper could be released this fall.
“We expect to publish a report around – could be early September, plus or minus, in that timeframe,” Powell said in testimony before the U.S. House of Representatives Financial Services. “We’re working hard on it right now.”
The report will address digital payments broadly, including items like stablecoins and crypto assets, which Powell said are at a “critical point in terms of the appropriate regulation.”
Stablecoins refer to a digital currency that ties its market value to an outside asset, like the U.S. dollar, for price stabilization.
In the case of a central bank digital currency, Powell said officials are working on laying out questions for the public to respond to.
“We want to begin really a major public consultation across many different groups, including Congress of course,” Powell said.
The report will also address the benefits and drawbacks, including a lessened need for multiple alternative forms of cryptocurrencies that could create risk.
“Particularly, you wouldn’t need stablecoins, you wouldn’t need cryptocurrencies if you had a digital U.S. currency – I think that’s one of the stronger arguments in its favor,” Powell said.
The Fed chair indicated there was still a lot of work left to do on both the technical and policy sides.
Continue reading, here.