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By Diccon Hyatt, News Reporter

What's Happening Today

There's a boring-sounding government report coming out this afternoon that you should pay attention to anyway. It's called the "Beige Book," and in the tradition of Fedspeak, its colorless name conceals the fact that what's inside could have a big impact on your wallet.

The Beige Book is a Federal Reserve report that comes out eight times a year. In it, business leaders and experts detail how things are going and how they see economic conditions from all corners of the U.S. economy—ranging from how much frozen fish costs in Boston-area grocery stores, for example, or whether computer software is in high demand in Cleveland.

The report could also have implications for how well your retirement plan does, how much you'll pay on your credit card debt, how much interest your savings account will earn, or even whether or not you'll be laid off from your job. That's because the Fed is looking at the Beige Book—and any other economic data it can get its hands on—as it considers how much to raise interest rates the next time it meets later this month.

If the Fed hears about prices falling or businesses struggling, it might convince policymakers to ease up on anti-inflation rate hikes. That could give stocks a boost, since businesses thrive on low interest rates, which make it easier to borrow money.

But if the report is full of talk of higher prices and booming business, the Fed might be more inclined to continue to raise interest rates at a fast and furious pace in hopes of slowing the economy down to contain today's raging inflation. That could send stocks down and borrowing costs up.

Case in point: how much you'll pay to take out a mortgage. The average rate for a 30-year mortgage jumped to 5.94% last week, nearing the recent peak it hit in mid-June, the Mortgage Bankers Association said today. The reason? Strong economic reports last week signaled that we might be in for another super-sized rate hike from the Fed.

- Diccon

Programming Note: You may have noticed a new contributor to The Balance Today. Kristin will be getting a little help from team members over the next few weeks, so stay tuned, and let us know what you think!

Editors' Picks

Jerome Powell's Inflation-Fighting Pledge Could Tee Up Another 0.75-Point Interest Rate Rise by Fed (The Wall Street Journal)

'No Sign of a Rebound': Mortgage Applications Hit 22-Year Lows, as Home Buyers Pull Back (MarketWatch)

The Supply Chain Broke. Robots Are Supposed to Help Fix It. (The New York Times)

Being Sad May Be Great for ESG (Bloomberg)

What Are Environmental, Social, and Governance (ESG) Criteria? (The Balance)

Best Mutual Funds for Young Investors (The Balance)

Investing for Teens: Everything You Need To Know (The Balance)

Term of the Day

Index ETFs

Index exchange-traded funds (ETFs) are designed to track the performance of an underlying market index—such as the Dow Jones Industrial Average, the S&P 500, and the Russell 2000—or a targeted subset of the overall market.

These funds allow individual investors to gain exposure to an entire index of stocks. Many of the largest ETFs are index ETFs. Generally, index ETFs have better fees and tax efficiency than mutual funds. You can use index ETFs for diversification and other strategies as an individual investor.

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