Credit: Chris Guillebeau
Job growth is on the rise, interest rates remain stable, and your student loan options are currently paused. Welcome to this month’s economic rollercoaster.
The economy is conveying mixed signals this month. In February, we saw the addition of 151,000 new jobs, which is a slight improvement over January's 143,000. However, unemployment rose to 4.1 percent.
The health care sector is thriving, adding 52,000 new jobs, while restaurants and bars are struggling, losing 27,500 positions. The federal government cut 10,000 jobs, whereas state and local governments gained 21,000.
The Federal Reserve is not making any abrupt changes. They are expected to keep interest rates steady at 4.25 – 4.5 percent during their meeting on March 18-19. Fed Chair Powell emphasized, “We do not need to be in a hurry and are well-positioned to wait for greater clarity.”
On a different note, Treasury Secretary Scott Bessent is focusing on 10-year Treasury yields rather than pressuring the Fed regarding short-term rates. His approach involves fiscal and regulatory reforms to assure markets that inflation will be kept under control in the long term.
A crucial aspect of his plan is addressing energy prices. Bessent believes that reducing costs for gas and heating oil serves a dual purpose: it helps consumers save money and enhances economic confidence. This is important because consumer spending accounts for 70 percent of our economy.
Speaking of confidence, it is rapidly declining. February recorded the largest monthly drop in consumer sentiment since August 2021. Individuals across all age groups and income brackets are becoming increasingly pessimistic, anticipating inflation to rise to 6 percent in the next year, which is significantly above current rates.
Do you have federal student loans? Applications for income-driven repayment plans are currently paused. This affects all plans, including older ones not involved in legal challenges.
The suspension followed a federal appeals court’s expansion of a halt on the SAVE plan. Approximately 8 million borrowers had signed up for this program, with over 400,000 having their debts canceled. This is especially relevant for those pursuing Public Service Loan Forgiveness, as income-driven plans are a key requirement.
In cryptocurrency news, bipartisan legislation regarding stablecoins is progressing. The Senate is proposing the GENIUS Act while the House has introduced the STABLE Act (which cleverly forms the phrase “stable genius”).
These proposed laws aim to establish clear guidelines on who can create stablecoins and require them to be fully backed by high-quality assets such as U.S. dollars or Treasury bills. They would also officially categorize stablecoins as payment instruments rather than securities, marking an important regulatory distinction.
As for the housing market, it varies significantly by location. In Washington, D.C., some zip codes are experiencing rapid price increases while others are seeing steep declines. The takeaway is that real estate is hyper-local, and success comes from mastering a few specific zip codes rather than trying to grasp entire metropolitan areas.
As Fed Chair Powell aptly stated, the key is “separating the signal from the noise as the outlook evolves.” This advice is valuable for navigating the current economic landscape.
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Episode Mentioned:
Afford Anything Episode 564, The Real Story Behind Those Economic Tariffs
https://affordanything.com/564-the-real-story-behind-these-new-tariffs/
Sources:
Bloomberg, Circle’s Stablecoin Regains Market Cap Lost From Crypto Collapse
https://www.bloomberg.com/news/articles/2025-02-07/circle-s-stablecoin-regains-market-cap-lost-from-crypto-collapse?utm_source=substack&utm_medium=email
Covington, Seven Things to Know About the Federal Stablecoin Bill, the GENIUS Act
https://www.cov.com/en/news-and-insights/insights/2025/02/seven-things-to-know-about-the-federal-stablecoin-bill-the-genius-act
CNBC, Powell says Fed is awaiting ‘greater clarity’ on Trump policies before making next move on rates
https://www.cnbc.com/2025/03/07/powell-says-fed-is-awaiting-greater-clarity-on-trump-policies-before-making-next-move-on-rates.html
Wall Street Journal, Trump Picks Brian Quintenz to Be CFTC Chairman
https://www.wsj.com/articles/trump-picks-brian-quintenz-to-be-cftc-chairman-3e23352d
NY Times, S.E.C. Moves to Scale Back Its Crypto Enforcement Efforts
https://www.nytimes.com/2025/02/04/business/sec-crypto-task-force.html
NYTimes, Student Loan Borrowers Blocked From Affordable Repayment Plans
https://www.nytimes.com/2025/02/28/business/student-loan-repayment-plans
#588: First Friday: The Economic Labyrinth We Are Traversing Together