FED The Federal Reserve raised rates by 0.75% for the second meeting in a row, to quell inflation pressures. The benchmark overnight borrowing rate set by the Fed is now in the range of 2.25-2.50%.
INFLATION REDUCTION ACT President Joe Biden signed The Inflation Reduction Act of 2022 into law, which aims to lower prescription drug prices, boost the renewable energy sector, and impose new taxes on large corporations. The Inflation Reduction Act of 2022 includes both new spending initiatives as well as new sources of revenue for the federal government. It is touted as a means of reducing federal budget deficits significantly over the course of the next ten years; however, independent organizations have questioned whether it will have a meaningful impact on inflation or economic growth.
MANUFACTURING DATA Growth at US manufacturers is at its lowest level in 2 years as of a July survey. A growing inventory glut has led to a slowdown in purchase activity.
HOUSING Housing in the top 50 markets in the US has begun to cool off after rapid price appreciation in the last few years. Increased supply coupled with higher mortgage rates has led to slower activity.
US SEMICONDUCTORS President Joe Biden signed the $52 billion Chips and Science Act to subsidize domestic semiconductor production. Many industries had complained about a shortage of chips hampering production of vehicles and other goods, but now many chipmakers report that demand is fading fast. In fact, Mercury Research reported that total processor shipments experienced their largest year-over-year falloff since about 1984. However, Bloomberg reports that industry executives still expect the industry to hit $1 trillion in total revenue by the end of the decade. That means the massive factory build-out may well be worth it.
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