Your Money

Central banks in Europe and Canada started cutting interest rates last week. Why hasn’t the Fed?

In a nutshell, the U.S. economy is stronger. That’s a good thing. But because inflation proved to be a little more stubborn earlier this year, it is leading Fed rate-setters to err on the side of caution when it comes to inflation, more so than their peers in other wealthy industrial democracies.

That isn’t the case in Europe or Canada, where growth has been weaker, and there are signs the economy might be slower. Europe was much closer to the fallout from the war in Ukraine, which drove up energy prices and left energy-intensive industries reeling.

Canada’s economy has more in common with the U.S. than Europe, but there’s a significant difference: most Americans have 30-year fixed-rate mortgages. Canadian loans adjust after five or seven years. That means households that locked in low rates when the pandemic hit four years ago are looking at significant increases in their housing costs quite soon and planning accordingly. That, in turn, could weigh on spending more. Americans are shielded from the effects of higher interest rates to a much larger degree because rates are fixed for the duration of the mortgage.

The inflationary phenomenon of the last few years was global, and central banks raised rates at roughly the same time and roughly the same (rapid) pace. If the recent declines in inflation are also global, there are good reasons to think that the Fed won’t lag far behind the pack. Indeed, officials are likely to project at their meeting next week that they still believe their next move will be a rate decrease and not an increase.

Why the Recession Still Isn’t Here
by Nick Timiraos

Your Life

I know my grandparents, and because of this, my kids know them, too, either personally or through shared memories about them. However, past that, like my grandparents’ parents, no one really knows anyone else. Pictures and stories and few and far between, if any. They are relatives that have faded into time. It’s not good or bad, but this is the case for most families. Unless your relatives made a mark on history, they are strangers to future generations. It’s a cycle as generations continue. Is the point to be remembered? Is it to make future generations proud once they find you? Your life is your own but not really. The way you’ve lived it will belong to future generations and can shape the course of your family tree. How do you want to be remembered? Did you build others up? What was your passion? Were you an honorable person? Aside from monetary assets, what did you leave behind?

Legacy: How Do You Want To Be Remembered?
by Tee Bengu

Complexity Simplified

Every year, new words are added to the dictionary to keep up with the times. Last February, Dictionary.com added or updated more than 1,700 words that reflect many emerging trends, like “bariecore.” The new entries also reflect many of the anxieties unique to our time, like climate breakdown and global boiling. Here are some of the new words and their meanings.

‘Bed Rotting,’ ‘Girl Dinner,’ and Dictionary.com’s New 2024 Words
by Simmone Shah

Trivia