Roundup of top economy stories
WASHINGTON — The last time the Federal Reserve faced inflation as high as it is now, in the early 1980s, it jacked up interest rates to double-digit levels — and in the process caused a deep recession and sharply higher unemployment. On Thursday, Chair Jerome Powell suggested that this time, the Fed won’t have to go nearly as far. “We think we can avoid the very high social costs that Paul Volcker and the Fed had to bring into play to get inflation back down,” Powell said in an interview at the Cato Institute, referring to the Fed chair in the early 1980s who sent short-term borrowing rates to roughly 19% to throttle high inflation.
••• WASHINGTON — Treasury Secretary Janet Yellen has pressed the case for Democratic economic policies during a visit to Ford’s Rouge electric vehicle assembly plant in election-year battleground Michigan. After a production-line tour, Yellen promoted recent legislative successes for the Biden administration. Yellen says she’s more optimistic about the course of the economy than she’s been “for quite a while” and says she knows “we are headed in the right direction.” Yellen’s visit to Detroit was part of a monthlong tour as well as a larger White House campaign to highlight new laws intended to aid the economy, boost computer chip manufacturing, lower prescription drug prices, expand clean energy and revamp the country’s infrastructure.
••• WASHINGTON — Average long-term U.S. mortgage rates jumped again this week to their highest level in almost 14 years, certain to keep even more potential buyers out of a housing market that’s cooled considerably since the Federal Reserve began jacking up its benchmark borrowing rate. Mortgage buyer Freddie Mac reported Thursday that the 30-year rate jumped to 5.89%, the highest it’s been since November of 2008, just after the housing market collapse set off the Great Recession. The average rate on 15-year, fixedrate mortgages, popular among those looking to refinance their homes, climbed above 5% for the first time since 2009.
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LOS ANGELES — Homebuyers are regaining leverage at the negotiating table as the housing market slows, new data from Redfin shows. On average, U.S. homes purchased during a fourweek period in August sold for less than the asking price. That hasn’t happened since at least March 2021, according to the real estate brokerage. Years of soaring home prices and sharply higher mortgage rates remain hurdles for many wouldbe homebuyers, but with more homes selling for less than their asking price, the housing market is becoming less skewed in favor of sellers.
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WARREN, Mich. — Auto companies are rolling out more affordable electric vehicles that should widen their appeal to a larger group of buyers. That’s despite rising battery costs. The latest EV came Thursday from General Motors, a Chevrolet Equinox small SUV. It has a starting price around $30,000 and a range-per-charge of 250 miles, or 400 kilometers. You can get range of 300 miles, or 500 kilometers, if you pay more. GM won’t release the exact price of the Equinox EV until closer to the date it goes on sale, about this time next year. But the SUV is at the low end of Edmunds.com’s list of prices for electric vehicles sold in the U.S. The average cost of an EV is now around $65,000.