Reading between the lines: Despite the Federal Reserve’s unanimous vote to raise a key interest rate last month, some policymakers viewed their decision as a “close call” because of stubbornly low inflation, The Associated Press reports. Going forward, officials believed economic conditions would likely justify “only gradual increases” in its benchmark rate, minutes of the Fed’s December meeting released today showed. The Fed boosted the rate by a quarter point to a new range of 0.25% to 0.5% in December. It had been at a record low near zero for the past seven years. The minutes revealed the delicate balancing act that Fed Chair Janet Yellen faces: Some members are still concerned that the recovery from the Great Recession remains fragile with too-low inflation. Others have long pushed for higher rates out of concern that waiting longer would run the risk of inflating dangerous asset bubbles. Read the full story.
Throwing it all away: Americans are eating, smoking and drinking away their savings from cheap gasoline, Bloomberg reports. The lowest oil prices since 2009 translated into a $115 billion windfall for consumers last year, according to the American Automobile Association—about $550 per driver. Analysts say four-fifths of that cash got spent often within a stone’s throw of the fuel pumps, with motorists having spent much of the money at restaurants and bars, or on items purchased in gas stations such as cigarettes and salty snacks. “The biggest share of savings is going to the sin goods: the cigarettes, the booze, the junk food,” says Craig Johnson, president of retail researcher Customer Growth Partners. “You get a small portion going into savings, but truly not that much.” So far, restaurant companies have been the biggest winners, sucking in about 18% of the extra cash, according to a report by the JPMorgan Chase Institute, which analyzed 57 million credit and debit-card purchases. The next biggest share went to groceries, followed by entertainment. Read the full story.
Down the road: U.S. gasoline prices will tick upward as the summer driving season approaches but end the year back in the basement where they started, logging the fourth straight year of declines, according to a new forecast. In a fresh report released exclusively to USA Today, GasBuddy.com analysts project that the price of a gallon of gas will reach a national average high of $2.63 in May, up from $1.97 in January. But rock-bottom oil prices will prevent gas from going any higher, according to GasBuddy, which expects gas to average $2.01 by year’s end. The projected average $2.28 for 2016 would mark the fourth consecutive year of lower gas prices, spelling a prolonged period of relief for pocketbooks. Gas prices were lower than $2 at more than 7 in 10 pumps nationwide at the end of 2015, according to AAA. In Baton Rouge today, gas is selling for an average of $1.72, with some stations offering a gallon for as low as $1.59, according to GasBuddy. Read the full story.
