January’s Final Session

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What's Happening Today

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

The S&P 500 and Nasdaq are edging higher in the last trading session of January, but both are still lower for the month. Markets have been a roller coaster ride for investors who are dealing with earnings season and upcoming rate hikes from the Federal Reserve. The S&P has lost close to 7% so far this January. The last time the index performed this badly was at the start of the pandemic in March 2020, when the S&P 500 declined more than 12%.

Red hot inflation and a growing economy have the Fed ready to raise interest rates soon (the Fed's main inflation-fighting tool), as the Biden administration has been fielding questions over concerns that the costs of just about everything have gone up too much. While investors shouldn't necessarily sell off their assets in reaction to recent market volatility, future rate hikes may mean it's a good time to take a look at what stocks you're invested in, and consider reallocations in your portfolio.

Tomorrow is the first day of Black History Month, and The Balance is excited to celebrate the Black community. Throughout the month, we'll address the homeownership gap between Black households and their counterparts which has contributed to racial wealth inequality. We'll also feature articles and conversations on Instagram Live speaking to Black first-time homebuyers. So mark your calendar for Wednesday, Feb. 2, at 6 p.m. Eastern, when we chat with author and Brookings Metro senior fellow Andre Perry about redlining, segregation, and more. We hope you will join us!

- Kristin

Editors' Picks

How the Fed's Policy Shift Is Rippling Through the Housing Market (The Wall Street Journal)

For People With No Credit Score, a New App Can Help (The Balance)

Credit Bureaus To Add Buy Now, Pay Later to Reports (The Balance)

Congress in Jeopardy of Missing Shutdown Deadline (The Hill)

Work-From-Home Spurs Blue-Collar Americans To Seek Career Shifts (Bloomberg)

Off the Charts

The average rate offered to homebuyers using a conventional 30-year fixed mortgage climbed to 3.96% last week, reaching a new high since 2020.

Fixed mortgage rates tend to track the direction of 10-year Treasury yields, which usually rise with heightened inflation fears (and fall when those fears subside.) Yields rose on Wednesday after Federal Reserve Chair Jerome Powell reinforced the central bank's commitment to using interest rate increases to quash what he said could be "prolonged" inflation.

Number of the Day

28 Million - That's how many Americans are "credit invisible," a plight credit bureaus want to fix with new products empowering people to build or even create a profile.

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