What’s Fed Speak and Why Do Investors Care?

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What's Happening Today

Today, "Fed speak" (or comments from Federal Reserve officials) as it's called, could capture your attention during a week where many people are focused on what sides they'll cook for their Thanksgiving dinners. We'll be hearing from Kansas City Fed President Esther George later this afternoon while Cleveland Fed President Loretta Mester and the typically hawkish St. Louis Fed President James Bullard are also expected to give remarks.

We're less than a month away from the next Fed policy meeting, and after several jumbo-sized rate hikes this year, investors are looking for any and all hints about the direction the Fed will go next.

But rate hikes impact everyone, not just investors, and we could get a clearer picture of how much higher rates have slammed the housing market with several reports due next week, including the S&P CoreLogic Case-Shiller Home Price Index and the National Association of Realtors' report on pending home sales.

Higher rates make borrowing money more expensive, so if the Fed hikes rates by another 75 basis points, expect much higher interest rates on mortgages, car loans, or credit card debt. Home affordability has continued to decline as the Fed tightens policy, with the national median payment up 3.7% to $2,012 last month, up from $1,941 in September, the Mortgage Bankers Association reported this morning.

Stocks are rising this morning on the heels of strong earnings reports from Best Buy and others. As a reminder, markets will be closed Thursday and will close earlier on Friday for the holidays.

- Kristin

Editors' Picks

Financial Experts Say These Assets Will Safeguard Your Money (Bloomberg)

Investor Home Purchases Drop 30% as Rising Rates, High Prices Cool Housing Market (The Wall Street Journal)

Tech Layoffs, Including at Amazon and Meta, Signal Slowing Economy But Not Yet a Recession (The Washington Post)

How Long Do You Have Health Insurance After Leaving a Job? (The Balance)

Can You Buy Life Insurance With No Medical Exam? (The Balance)

Year-End Tax-Planning and Deferred Income Tips for the Self-Employed (The Balance)

Why Make Year-End Charitable Donations? (The Balance)

Term of the Day

Self-Employment Tax

Self-employment tax is the combined amount of Social Security and Medicare taxes that a self-employed individual typically has to pay. Generally, if you have $400 or more in self-employment income, which can include contract work or other sorts of side hustles, you have to pay these taxes, which are usually more than what an employee would directly pay for Social Security and Medicare taxes.

Off the Charts

As difficulties with shipping products ease, shoppers could eventually start to see price increases on store shelves diminish.

The cost of shipping things by sea has fallen more than 70% since peaking in September 2021 and is down nearly to pre-pandemic levels, according to the Drewry World Container Index, which measures the cost to ship a standard 40-foot container along different global routes.