Decision Day

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What's Happening Today

Good morning! It's Kristin with your daily morning digest.

U.S. equity markets are on the rise as investors wait to hear results from this week's Federal Reserve Open Market Committee meeting at a press conference later this afternoon, at 2 p.m. Eastern. The central bank is not expected to raise rates just yet, but the Fed's announcement could provide more insight on policymakers' timetable for hikes later this year, including a signal that interest rate hikes are coming in March.

Unfortunately for taxpayers in high tax states like New York, Connecticut, and California, reports out of Washington, D.C. suggest that Senate Democrats might not raise or eliminate state and local income tax (SALT) caps as part of Build Back Better, the expensive social infrastructure bill (paid family leave, subsidized child care, etc.) that has stalled in Congress. SALT allows taxpayers to deduct property taxes, and state and local taxes or sales taxes (but not both). While the Tax Cuts and Jobs Act doubled the standard deduction in 2018, it capped the maximum amount of state and local taxes that could be deducted, hurting taxpayers in high tax states.

Rising mortgage interest rates are also impacting the number of applications for new mortgages and the demand for mortgage refinancing (replacing an existing home loan with a new one, usually to get a lower mortgage rate), according to the Mortgage Bankers Association (MBA). An index measuring mortgage application volume declined 7.1% last week, while refinancing demand dropped to 55.8% from 60.3% the week before. The rise in mortgage rates could cool housing demand, which might bring down prices in America's red hot real estate market.

- Kristin

Editors' Picks

After Wild Swings, Investors Look to the Federal Reserve To Calm the Market (CNBC)

Trade Deficit for Goods Widens, Sales of New Homes Jump (The Balance)

Average Credit Card Interest Rate Is 20.45% (The Balance)

SALT Change Likely To Be Cut From Bill, Say Senate Democrats (The Hill)

Schools Struggle With Omicron-Fueled Teacher Shortages (The Wall Street Journal)

Off the Charts

The pay gap between women and men narrowed for the third year in 2021, but the gain was relatively small once again, recent government data showed.

A woman earned 83.1% of what a man did in 2021, up from 82.4% in 2020 and the most since at least 1979, as far back as the Bureau of Labor Statistics data goes. But as the chart below shows, recent progress has been small and uneven.

Number of the Day

5 - That's how few days (actually fewer than 5) it would have taken for companies to exhaust their supply of key semiconductors last year, down from 40 days in 2019.

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