Happy Wednesday! It’s Oct. 23, 2024. We have three great stories to wrap up the past few weeks in markets, business, and the economy for you and your family.

Here are the highlights:

• All downhill from here: What the Fed rate cuts mean for families
• Bottom of the barrel: Oil prices have been falling — could that continue?
• Congress watch: The lesser-talked about portion of the forthcoming election

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All Downhill from Here: the Fed Begins Cutting Rates

Goodbye generationally-high interest rates, we hardly knew ya — except for when you were a massive inconvenience. In September, after nearly three years of interest rate increases, the Fed cut interest rates by 50 basis points (0.50%). The move reflects greater optimism over receding inflation, as well as stability in the broader economy.

• Why does it matter? Higher interest rates set by the Fed were meant to slow the rate of inflation — but those higher rates designed to slow consumption also meant higher borrowing costs for households looking to buy a home, a vehicle, or make other big purchases. And for many Americans with credit card debt, it increased the cost of maintaining that balance.
• What does that mean? Now that inflation is mostly in the rear view, the Fed is cutting rates to balance out the economy — which means that financing costs will become more affordable. By the Fed’s estimates, rates could fall to 4.4% by year-end, a far cry from their decade-high 5.25-5.5% range. That means that the cost of borrowing money for a big purchase (like a home, car, student loans, etc) is expected to decline again, but the rate at which the Fed might conduct those cuts is still up to their interpretation of the economy.
• Then what? Rates are expected to continue declining, bar some sort of economic decline or radical slowdown in activity, through 2026. By the Fed’s own projections, the median interest rate expected by its members is 3.4% by the end of 2025 and 2.9% in 2026. That’s still higher than the roughly 0% rates we saw during the pandemic — and the near-zero rates we’d seen over the last 10 years — but it opens more possibilities for families.

Why does it matter for EarlyBird families?

By now, you probably gather that lower interest rates are good news for borrowers — but if you’re an avid saver or investor, declining rates mean that it might be time to evaluate alternatives. Now might be a good time to evaluate bonds or growth stocks, rather than the high-yield savings account or money market funds that have been paying promising yields. And with any big decision, these decisions should be made with respect to your future goals — are you saving too much and investing too little? Are you putting enough towards yourself, your family, or your child’s accounts? It’s never a bad time to evaluate.

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Bottom of the Barrel? Oil Could Continue to Fall

This time last year, oil was trading close to $90 per barrel. But just a few weeks ago, oil reached its lowest price of the year — $65. It’s a byproduct of falling demand, weak Chinese stimulus, and one of the oil world’s largest producers considering a big change.

• IEA forecasts lower demand: Have we seen peak oil? Maybe for now, yes. For the last three months, the International Energy Agency reduced its oil-demand forecast — and these revised forecasts indicate a sharp decline from all of the production which had to be shored up after COVID. The oil market has been going from 0 to 100 quite quickly; now, it’s slowing down to 50 even more quickly.
• So much for geopolitical tension: There’s always stuff going on — that’s especially the case in the chaotic Middle East region, which itself is one epicenter of global oil production. However, investors are increasingly of the mind that tensions which helped oil prices rise to last year’s highs are no longer a big worry. Instead, downside pressures are top of mind.
• Saudi Arabia’s big pivot: With oil prices staying relatively suppressed by strong US production, falling global demand, and other factors, one of the world’s largest oil producers is looking to abandon its $100 price target — and that supply could send prices plummeting even further.

Why does it matter for EarlyBird families?

The decline in oil prices is welcome news for households, especially given the impact of oil prices on the price of other goods. And just in time for the holidays, households angling to travel for Thanksgiving or other Holiday festivities could appreciate cheaper prices at the pump. Still, prices could change rapidly, so beware.

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Congress Watch: The Lesser-Considered Elections to Watch

For the last three months, it’s been all about Trump and Harris. No doubt, America’s forthcoming presidential election is an important one, but even bigger impacts could hit closer to home as the country gears up to reelect the House of Representatives and a substantial portion of the Senate.

• Why does Congress matter so much? The Presidency is an important job, but it’s not all that useful if you don’t have some friends in Congress to help get things done. Today, the Senate is tied — with a tie-breaking seat held by Democrats. By contrast, the House is narrowly held by Republicans, which have faced a number of resignations and retirements which have ate into their numbers. Both houses are important to passing legislation like the annual government budget, as well as policies that have an impact on your life — and the markets.
• What’s at stake? 34 Senate seats will be up for election, as well as the entirety of the House of Representatives. As a result, there’s a massive opportunity for either the Democrats or Republicans to take control (or lose control) of their respective houses — an outcome which could have massive impacts on the next president’s ability to pass legislation and execute their agenda.
• What does that mean for me? Many states are going to have a Representative and Senator up for election alongside the President. If you don’t know what your ballot looks like, check out Ballotpedia — which includes some resources you can use as you get ready to vote. This is your opportunity to have a say in the next few years of the national government (and your local officials, too!)

Why does it matter for EarlyBird families?

Voting is an important civic responsibility — not just for the national elections which are forthcoming, but for all of the even-more important local elections which stand to have a greater impact on your daily life.

What else is up?

• FTX creditors will receive $1.19 per dollar after bankruptcy: Victims of the crypto exchange can now expect to get a modest return on their money after the bankruptcy court scrounged together more money than creditors had in the first place. Read more in CNBC.
• Hurricane survivors face frustrations: Hundreds of roads remain closed in parts of North Carolina and Virginia after Hurricane Helene — which has been washed away in the national news in recent weeks. Read more in Axios.
• Trump proposes tax plan to exempt 93 million Americans from income taxes: Trump claims that the proposed tax cuts would be replaced by tariffs which could cost the average American up to $2,000 per year — but experts are perplexed (and unsure.) Read more in CNBC.