It has certainly been a tumultuous week in terms of economic and financial news! The historic Fed interest rate hike, tumbling financial markets, crashing crypto prices, and the release of mixed and often unexpected economic data give us a Weekend Reading list rich in content this week.

Economics

• The biggest news in this category was the historic 75 basis point increase in the Fed’s interest rate target. VOX does a good job of explaining the reasoning behind it and the reaction to it.
• Ben Bernanke (Fed Chair from 2006-2014 during the Great Recession) offers his knowledgeable opinion on the likelihood of our current economic situation leading to a recession. The economic historian feels we have learned a lot from the past and should be able to avoid repeating it. (NYT-opinion
• Sam Ro, CFA and financial journalist and author of TKer, explains why the typical cure for inflation--high prices—is not working now as it has in the past because in general, people are willing to pay the higher prices following the pandemic. There are lots of great charts and data here.
• While it is not inevitable that we will end up in a recession, WAPO’s Michelle Singletary offers seven tips on how to prepare, just in case.
• The drop last month in retail sales was not expected, but indicates that rising prices of essential goods may now be hampering consumers’ ability to buy other things. (Yahoo Finance)
• As pandemic relief has been depleted, Americans are now apparently dipping into savings to get by. (Civic Science)

Investing

• It’s official, we are now in a bear market. Slate explains what that means and why we are here.
• These two articles outline bear markets and recessions since WWII, recognizing that they are not rare or surprising. You just need to learn how to live with them. (NYT-subscription may be required) (A Wealth of Common Sense)

Cryptocurrency

• In case you have been too busy to notice, the value of cryptocurrencies has been dropping fast, with bitcoin down 70% from its November peak. (NPR)
• While crypto fans think this current drop just sets them up for the next run, bill Gates calls crypto and NFTs scams. (CNN)

Housing/Real Estate

• Mortgage rates on a 30-year mortgage are now over 6%, rising almost a full percentage point in a week. This may slow down the hot market, but with demand still high and supply still low, a huge drop is not certain. (CNBC)
• However, anticipating a slowdown, several big real estate firms have started laying off staff. (CNBC)
• The drop in May housing starts is yet another sign the hot real estate market may be cooling off a bit. (CNN)

Behavioral Finance

• How does the frequency of your pay may be impacting your financial health. (Knowledge@Wharton)
• Parenting is tough for anyone, but there are added strains for those living in or near poverty. Financial strains take a huge toll on mental health, particularly of fathers, and lead to conflict and stress on spouses and children. (The Conversation)

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.

More posts by Beth