Sunday, December 3, 2023
Journal: What's going on with Personal Finance?
This past week in U.S. personal finance, there were several notable developments:
1. Mortgage Rates Tumble: After briefly hitting 8% in October, mortgage rates have dropped. This decline is attributed to a dip in the 10-year Treasury bond yield and a slump in the housing market, with existing home sales at a 13-year low. This shift could make homeownership more affordable and offer refinancing opportunities [[❞]](https://www.experian.com/blogs/ask-experian/latest-personal-finance-news/#:~:text=Here%E2%80%99s%20the%20latest%20personal%20finance,).
2. Inflation Rate Lowers: The core consumer price index (CPI) rose by 0.2% month-over-month and 4% year-over-year, hitting a two-year low. Although still above the Federal Reserve's 2% target rate, this slowdown in inflation suggests that further interest rate hikes might be less likely unless economic conditions worsen [[❞]](https://www.experian.com/blogs/ask-experian/latest-personal-finance-news/).
3. Tax Adjustments for 2024: The IRS has announced a 5.4% increase in income tax brackets and the standard deduction for the 2024 tax year. This adjustment, the second-largest in 30 years, reflects current inflation levels [[❞]](https://www.experian.com/blogs/ask-experian/latest-personal-finance-news/).
Looking ahead to the upcoming week, there are a few key areas to watch:
1. Mortgage Rates: The recent trend in lowering mortgage rates might continue, influenced by inflation rates and housing market dynamics. Potential homebuyers and those looking to refinance should keep a close eye on these rates.
2. Tax Planning for 2024: With the significant increase in tax brackets and the standard deduction, individuals and families should start planning for the 2024 tax year, especially regarding withholdings and potential changes in tax liabilities.
3. Inflation and Federal Reserve Policies: The trajectory of inflation and the Federal Reserve's response will remain critical. Any new data or statements from the Fed could influence interest rates, affecting savings, borrowing costs, and investment decisions.
