September looks to be the month that unemployment numbers will spur action that reduces interest rates. One state’s residents won’t see the big property tax cuts that they once may have thought were coming, but other taxes aren’t going up either. And a U.S. senator has a reminder (warning?) for a giant agricultural company on its duty to the country.
They are all developments that impact finances.
Watching this Number – September looks to officially change the conversation from “if” the Federal Reserve Board will lower the federal funds rate to “how much.” When Federal Reserve Chair Jerome Powell said during the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming, that “the time has come for policy to adjust,” it signaled that action is coming to reduce borrowing rates.
The nation’s economy has avoided recession, an impressive feat – if it lasts – despite the shock that the pandemic delivered and the subsequent response in federal spending. Powell’s speech in Jackson Hole highlighted the prominence of the nation’s unemployment rate (currently 4.3%) as a reason for lower rates. Inflation is much less a factor, despite what you may hear from some politicians these days, due to its shrinkage over the past year.
The next federal report that details the U.S. unemployment rate could provide the basis for how much the Fed will reduce rates during its upcoming meeting on September 18th. This Reuters article explains the Fed’s focus on unemployment in guiding its plans for interest rates adjustments.
Cornhusker Cuts – Nebraska’s legislature didn’t pass the sizeable tax cuts that Governor Jim Pillen, a Republican, had originally wanted. Legislators also didn’t remove all the tax exemptions that they once discussed to offset those larger property tax reductions.
Brokerage and management fees were among the potential tax changes in earlier discussions. The Nebraska Examiner laid out in this article Pillen’s original plan that would have added taxes to more than 120 goods and services.
Pillen wanted a 50% reduction in property taxes. He called lawmakers back into special session. They ultimately agreed on a cut of about 3%.
A Nebraska Examiner follow up article pointed out that the much smaller tax package did not include higher fees in other areas. Read that here.
Senator’s Call of Duty – John Deere has an obligation to its American workers, U.S. Senator Marco Rubio told the company’s Chairman and CEO John May. Rubio, a Florida Republican, pointed out how Deere has laid off 2,000 American workers as it shifts some production from the United States to Mexico.
Key agricultural states have been hit hard by layoffs from Deere and other large companies amid declining incomes from farmers. “I want to remind you of your company’s duty to your workers, their families, the communities in which they live, the nation which you call home, your hardworking customers, and your shareholders,” Rubio wrote in his letter.
The company spent $7.2 billion on stock buybacks, the senator also pointed out to Deere’s leader.
