Yellen Looks to Sustain US Economy

The U.S. Federal Reserve is poised to continue its gradual increase of interest rates which aims to sustain the economy’s full employment and near 2-percent inflation. The idea is to make sure the economy does not overheat.

Janet Yellen, Fed Chairman, said, “I think we have a healthy economy now. Whereas before we had our foot pressed down on the gas pedal trying to give the economy all the oomph we possibly could, now allowing the economy to kind of coast and remain on an even keel—to give it some gas but not so much that we are pressing down hard on the acceleration—that’s a better stance of monetary policy. We want to be ahead of the curve and not behind it.”

Last month, the Fed increased rates for the third time and was expected to raise the rates at least two more times this year. Yellen also noted that unemployment is at 4.5% which is a bit below a marker of full employment. Yellen said, “Our assessment of what a neutral stance of short-term interest rates is actually pretty low. Although interest rates right now are low, just a little bit under 1 percent, our estimate of neutral is really not that high.”

Yellen said, “We think a gradual path of increases in short-term interest rates can get us to where we need to be, but we don’t want to wait too long to have that happen. Looking forward, I think the economy is going to continue to grow at a moderate pace. Our job is going to be to try to set monetary policy to sustain what we have achieved.”

Yellen noted that consumer spending was growing at a decent pace and that the global economy was becoming “slightly more robust and healthier.” However, she said that economic growth was still relatively slow and this was outside the powers of monetary policy.

Yellen said, “The fact that you can create that many jobs in the context of growth that is so low points to a significant problem. Moreover, the problem is that productivity growth is very low.”

Some economists suggest that there is a leveling-off in educational attainment to explain the lackluster productivity growth. Research suggested that there is a decline in corporation competition which means less new businesses and more integration instead.

The next Fed meeting is going to be May 2-3, but most economists think the rate hike will not happen then. They predict it will be either at the June or September meeting. In last month’s Fed meeting, there were discussions already on reducing the Fed’s $4.5 trillion balance sheet by the end of 2017.

Yellen expressed her concerns regarding proposals to curtail the Fed’s independence. The proposals would give the Government Accountability Office to review the decisions of Fed on interest rate policies. There is also a proposal that will require the Fed to simply follow a specific formula in setting interest rates.

Yellen said, “Our independence is under some threat. The independence of a central bank to make decisions about monetary policy free of political pressures is very important.”

Qatar to Extract Resources from World’s Largest Natural Gas Field

Qatar is ending its 12-year self-imposed ban on new projects in its offshore North Field. The southern part of the field has a capacity of 2 billion cubic feet per day. This is equivalent to 400,000 barrels of oil.

According to Qatar Petroleum Chief Executive Officer Saad Sherida Al Kaabi, they will start production within five to seven years. It will use the previous studies and exploratory wells it started in 2005. The project is expected to commence later this year.

Al Kaabi said, “Global demand for gas is expected to rise. There are no analysts who can say when demand for gas will wane. For oil, there are people who see peak demand in 2030, others in 2042, but for gas, demand is constantly growing.”

Iran controls the connected South Pars, and when combined with the North Field, forms the world’s biggest reservoir of non-associated gas. Iran has extracted gas from its part to supply domestic requirements as well as re-injecting it into oil fields to increase crude production. Iranian Oil Minister Bijan Zanganeh announced last month that Iran would inaugurate $20 billion worth of oil-related projects in 2018.

Al Kaabi noted that state-owned Qatar Petroleum has not decided if they will export their gas extracts in the form of LNG or other products. Currently, Qatar exports to the world 77 million tons of LNG annually. If it decides to create LNG out of its extracts in the North Field, it can be converted into 15.3 million tons of LNG annually.

Al Kaabi said, “Our aspiration is to remain the leader in LNG export, whether it’s from Qatar or elsewhere. We will remain the dominant force for LNG in the world for a very long time, and this basically solidifies that position.”

Qatar is a rich member nation of OPEC and derives majority of its income from natural gas, or LNG. It intends to use the additional revenues from this development to fund its ambitious infrastructure projects.

While Qatar and Iran have differing opinions on regional conflicts, they observe diplomatic relations.

Al Kaabi, said, “Iran and Qatar have an excellent political relationship, for us as technicians we have an excellent technical relationship. We have a committee that meets regularly to discuss what both sides are doing. So there’s a mutual understanding of what is happening. They’re free to do what they want on their side of the field and we’re free to do what we want on our side of the field.”

The success of Qatar’s gas industry depends on its partnership with global energy companies like Total SA and Exxon Mobil Corp. Qatar has an excellent relationship with U.S. Secretary of State Rex Tillerson who was the former head of Exxon Mobil Corp.

Al Kaabi said, “He’s an excellent man who stands for ethics, integrity and is a great business leader. I think he will do a great job in his job because he has always been in cooperation with many leaders around the world to promote his business.”

10 Expenses that Can Play Havoc on Your Finances

child with money

If you want to lower the amount you pay on your household budget, think about cutting the following expenses. For example, cable is a major expense; however, some homeowners cannot envision life without the amenity in their home. However, there are other expenses you can reduce that can even out your budget overall.

1. Cable – The average cable bill costs about $80 per month. However, the Internet can be used to replace the expense. If you only watch certain shows anyway, then paying full price for a cable package might impact your pocketbook or wallet less. If you can go without cable, you can replace it with such services as YouTube, Netflix, Roku or Hulu.

2. Cellphone – Why sign up for some expensive two-year contract when cellphone carriers offer plans with no long-term contract commitments? For example, some carriers offer plans that begin at about $35 per month compared to unlimited plans that can cost as much $120 per month. You will save almost $100 per month by going with a less expensive carrier.

3. Energy Usage – Did you know that you can save as much as 3% on a heating bill for each degree you lower your thermostat? For example, if you regularly set the thermostat at 75 degrees but lower it 3 degrees, you can save almost 10% on your utility bill. That amounts to almost 10% on the dollar.

4. Transportation – If you live in an urban area, taking public transportation can save you on both gas and auto repairs. It also cuts the cost of insurance. You can substantially reduce your expenses by taking a train, bus or subway versus paying for an auto car insurance each month. That also includes the parking tickets you may receive every once in a while.

5. Dining Out – Dining out can also cost a good deal more than cooking at home. Therefore, if you do not like to cook, think about preparing fast microwave recipes. Avoiding the temptation to eat out or drop in at a fast food restaurant can make a significant difference in what you spend overall.

6. Gym Memberships – Gym memberships can also put a strain on the budget by about $50 per month, which, in turn, adds up to hundreds of dollars annually. You actually can work out for free by taking advantage of a company wellness program or following a fitness program on a DVD at home. It’s also free to walk or run outdoors.

7. Groceries – On average, it costs between $550 and $1,075 per month to feed four people in a household. If you want to cut your food costs, try shopping at a warehouse club where you can purchase bulk items for less. Just avoid those large bags of perishables. Don’t buy items that can expire in a short period.

8. Daily Coffee – While you might think that enjoying a morning coffee is a nice way to begin the day, the cost can also be prohibitive. Paying out $4 each time can also hurt the budget. Why not make your own favorite brew by paying for a coffee or latte machine?

9. Prescription Medications – Paying for prescription drugs can also hit you in the pocketbook or wallet. Generic drugs are the bio-equivalents of brand-name medications. However, they cost about 85% less. If you sign up for a pharmacy discount card, add about another 10% in savings.

10. Shopping – Reduce your shopping costs by taking advantage of online discounts or becoming a member of an association like the AARP. Students, veterans and seniors should all take advantage of the shopping discounts that are provided to them in retailers and online.

Obama’s Stranglehold on $38 Billion Bad Credit Loan Industry

Hanging Noose

Payday loans are a $38 billion industry. It’s used by tens of millions of consumers every single year in the United States. Over the years, particularly since the economic collapse, public officials and consumer advocacy organizations have complained about payday loans being predatory and prompting so many consumers to enter into a never ending spiral of debt.

Many states across the country have installed their own sets of rules and regulations, a few have even gone as far as prohibiting the industry from operating. But that isn’t enough for the federal government. They now want to implement federal guidelines for the entire industry.

The Obama administration proposed a series of new rules and regulations Thursday. This is a monumental victory for the Consumer Financial Protection Bureau (CFPB), which has been targeting personal loans for people with bad credit since it was established by President Obama soon after he took office.

Under the proposal, bad credit loan stores and website aggregators will be required to verify a customer’s income to make sure that they can pay back the necessary funds. If the customer doesn’t earn enough money or lacks a minimum sum in their bank account then the payday loan application would be denied.

In addition, the new rule would prevent payday lenders from debiting borrower’s accounts over and over again. This would stop consumers from facing hefty bank fees from overdrafts or insufficient funds.

There would also be a cap placed on the number of payday loans one can take out in a short period of time.

The new rule was unveiled at a public hearing in Kansas City, Missouri. The general public has 90 days to comment on the proposed guideline. The final rule is projected to be completed by next year since it does not need to be approved by the Congress.

“Today, we’re announcing a proposed rule that would require lenders to determine whether borrowers can afford to pay back their loans. The proposed rule would also cut off repeated debit attempts that rack up fees and make it harder for consumers to get out of debt,” wrote David Silberman, CFPB’s acting deputy director, in a blog post announcing the rule. “These strong proposed protections would cover payday loans, auto title loans, deposit advance products, and certain high-cost installment loans.”

Within just a few hours, there have already been mixed reviews. Opponents of the proposal say the new limits would hurt the most vulnerable of borrowers that they want to help. Meanwhile, advocates of new federal rules say complex rules would discourage banks from offering such a product.

It may make sense considering that the payday loan rule comes with 1,300 pages, which is about 500 pages more than the mortgage rules outlined in 2013.

Other consumer groups, however, welcomed the proposal.

“Since the CFPB was created, the Bureau has worked diligently to understand the payday and car title market, examine the consumer experience and develop focused and data-driven interventions to prevent harmful practices,” said Tom Feltner, Director of Financial Services at Consumer Federation of America, in a statement.

For months, the CFPB has been trying to overhaul the high-interest, short-term loan industry. Since the financial industry has abandoned this part of the marketplace, the president argued that it was up to the federal government to ensure a Wild West doesn’t form in this area of the economy.

Report Highlights Issue of Medical Bill Errors

Many people across the United States find themselves facing hefty medical bills each year, and the rising cost of healthcare means that these bills can often be for eye-watering sums that people really struggle to afford. However, a recent report has suggested that those who have medical bills to pay should first get the bill checked out properly and obtain professional advice because there is a strong chance that the final amount being asked for could be incorrect.

According to the report, a huge percentage of medical bills tend to contain errors and this means that consumers may end up paying more than they actually need to. It appears that the level of errors in medical bills has been on the rise over the past few years, which is why experts are now urging consumers who receive medical bills to ensure they check the amount they owe is correct before they settle the bill.

Instance of errors on the increase

According to the American Medical Association, there were errors in just over 7 percent of paid claims in 2013. The following year, another independent study suggested that there were errors in close to 50 percent of Medicare claims. However, there are also groups that look at claims on behalf of consumers such as CoPatient and American Billing Advocates of America, and they have said that the rate of errors is more like 75 to 80 percent.

These figures suggest that the error rate has been increasing over the past few years and this could leave many Americans seriously out of pocket. One expert said that consumers should hold off paying the medical bill until it has been checked and verified as correct. While spotting errors is something that can be difficult for the lay person who knows little to nothing about medical billing, there are groups that can help by checking the bill and industry experts have said that this will help to make things easier for those facing medical costs.

Employers are also recognizing the problem that their employees face when it comes to medical bills and as such many are now offering access to resources and assistance for their workers. A recent survey carried out by benefits administration group Aon Hewitt showed that out of 800 large and medium sized businesses, 45 percent were now offering access to advocacy services for their employees. One official said that this could help to not only reduce costs for workers but also boost productivity at work.