This year featured much economic news, some concerning and some encouraging. Here are four of the economic stories that stood out in 2024.

This past year was an election year, and the economy was voters’ biggest concern. Anger about years of too-high inflation helped tilt the election in President-elect Donald Trump’s favor. Additionally, bitcoin had a banner year; the government fell further into fiscal trouble, and investors poured billions of dollars into artificial intelligence, betting that it is the future.

Inflation and the Fed

Inflation has gradually trended down from a peak of about 9% in 2022, but this past year, consumers still felt the pain from four cumulative years of fast-rising prices. To close out 2024, goods and services are now generally about 20% more expensive than when President Joe Biden entered office.

While inflation rapidly decelerated in the latter half of 2022 and in 2023, it declined this year, although not as fast as might have been hoped.

The Federal Reserve is targeting 2% inflation, and while inflation still isn’t there, the Fed has made progress in its goals.

Mark Hamrick, senior economic analyst at Bankrate, said there is much uncertainty in the months ahead.

“I think the path of inflation has been bumpy all along,” he told the Washington Examiner. “And, you know, it appears that perhaps the current part of the journey is a little more challenging for the Fed to get to its 2% target.”

There are a few gauges of inflation, but the consumer price index is the most closely watched one, and the personal consumption expenditures index is the one the Fed tracks.

CPI inflation was tracking at 3.1% in January and has now fallen to 2.7% after briefly dipping to 2.4% in September. PCE inflation began the year at 2.6% and has fallen to 2.3% after falling to a low of just under 2.1% in September.

The Fed raised interest rates to historic levels in response to inflation, with the central bank bringing its rate target to a peak of 5.25% to 5.50%. But the Fed finally cut interest rates in September, the first time in over four years. The Fed cut again in November and analysts expect more downward revisions in the year ahead.

Inflation was a top political consideration. Many voters said the past few years of high inflation was the biggest issue on their minds heading into the voting booth. The higher interest rate environment also made consumers like the economy was in bad shape, even as unemployment remained low and economic growth was hearty.

Fiscal outlook darkened

Also tied, in part, to the higher interest rates, the federal government’s fiscal outlook became even more uncertain in 2024.

The Congressional Budget Office estimated in October that the federal budget deficit for fiscal 2024 rose to $1.8 trillion, the highest in three years. That is an increase from $1.7 trillion the year before.

Interest costs continued to surge in 2024. Spending on interest on the public debt rose by $240 billion last year to a total of $950 billion.

Spending on Social Security also rose by about 8% because of cost-of-living increases raising the average benefit payment and a larger number of people receiving benefits.

Medicare spending also rose about 9% because of rising enrollment and higher payment rates for services.

Yields on 10-year and 5-year Treasuries have also been elevated despite the Fed cutting short-term rates. That means that spending on the interest on the federal debt is only set to increase, which raises cost of running deficits. That means that policies that add to deficits, such as Trump’s planned tax cut extensions next year, are more costly.

The total national debt of the U.S. hit $35 trillion in July and then, just a few months later, hit another milestone of $36 trillion. The federal debt per citizen has now climbed to about $107,000.

“We are only two months into the fiscal year, and we have already borrowed a staggering $622 billion, with $365 billion in the month of November alone,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Less than a month ago, our national debt reached a new high of $36 trillion, and the threat of even more debt looms large.”

Rising debt and deficits threaten popular programs like Social Security and Medicare, which millions of Americans rely on. The Medicare trust fund will be exhausted in 2036, and the combined Social Security trust fund will become exhausted in 2035, the program’s trustees projected in May.

Bitcoin boom

Bitcoin had a banner year, with its price rising from about $44,000 per coin at the start of 2024 to around $60,000 by mid-year and all the way up to over $100,000 in December.

For context, if someone would have converted their total $250,000 in savings and traditional investments into bitcoin at the start of the year, their nest egg would have grown to a staggering $603,000 — a 141% return on investment.

A big part of the bitcoin growth in 2024 came as a result of Trump besting Vice President Kamala Harris in the election. Cryptocurrency proponents see Biden, and by extension Harris, as hostile to the industry. But more than that, Trump embraced bitcoin on the campaign trail and groups associated with digital assets ended up supporting his election bid.

Since winning, Trump has tapped a crypto-friendly Securities and Exchange Commission chairman and treasury secretary. Trump also selected venture capitalist David Sacks as the first-ever “crypto czar.”

In good news for the industry that predated Trump’s win, the SEC finally allowed bitcoin spot ETFs in early 2024 after years of waiting from cryptocurrency advocates and hope from large institutions such as BlackRock and Fidelity that their applications would get approved.

Institutional acceptance increased for bitcoin this past year as well, further supporting the crypto space.

“I mean, now even Blackrock is recommending people have Bitcoin as part of their portfolios,” Brian Morgenstern, who is head of public policy at Riot Platforms, told the Washington Examiner. “So it’s a scarce asset with demand rapidly increasing.”

AI: the future?

Artificial intelligence came to the fore in 2024 and dominated headlines. There was an increasing adoption in a wide array of industries and stocks associated with the nascent technology, which proved to be cash cows.

Nvidia, a U.S. computer and software company, has seen its stock outperform even bitcoin, posting behemoth 170% gains since just the start of the year. Just one daily rally in February resulted in 16.4% gains.

The rapid growth of Nvidia, which specializes in the chips behind AI, in 2024 was fueled by a boom in interest in AI and the semiconductor chips that are needed to make it run.

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations,” Jensen Huang, founder and CEO of Nvidia, said after a positive earnings report earlier this year.

Tools like ChatGPT also came into common usage. ChatGPT and platforms like it are able to tap into AI to perform complicated tasks, such as designing spreadsheets and solving complex equations. They are also able to perform more menial tasks like providing tweaks to recipes and scouring the internet for movie reviews.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

It is yet to be seen just how big the AI boom is. Some investors think 2024 marked the beginning of an AI revolution, while others contend there is an AI bubble, akin to the dot-com bubble, about to burst.

“I think there’s reason to believe that this is a very significant point in our history with respect to the emergence of new technology,” Hamrick said. “But that does not mean that everybody comes out a winner with respect to what they’re investing.”

2024-12-27 11:00:00, http://s.wordpress.com/mshots/v1/https%3A%2F%2Fwww.washingtonexaminer.com%2Fpolicy%2Ffinance-and-economy%2F3263386%2Ffour-biggest-economic-stories-2024%2F?w=600&h=450, This year featured much economic news, some concerning and some encouraging. Here are four of the economic stories that stood out in 2024. This past year was an election year, and the economy was voters’ biggest concern. Anger about years of too-high inflation helped tilt the election in President-elect Donald Trump’s favor. Additionally, bitcoin had,

This year featured much economic news, some concerning and some encouraging. Here are four of the economic stories that stood out in 2024.

This past year was an election year, and the economy was voters’ biggest concern. Anger about years of too-high inflation helped tilt the election in President-elect Donald Trump’s favor. Additionally, bitcoin had a banner year; the government fell further into fiscal trouble, and investors poured billions of dollars into artificial intelligence, betting that it is the future.

Inflation and the Fed

Inflation has gradually trended down from a peak of about 9% in 2022, but this past year, consumers still felt the pain from four cumulative years of fast-rising prices. To close out 2024, goods and services are now generally about 20% more expensive than when President Joe Biden entered office.

While inflation rapidly decelerated in the latter half of 2022 and in 2023, it declined this year, although not as fast as might have been hoped.

The Federal Reserve is targeting 2% inflation, and while inflation still isn’t there, the Fed has made progress in its goals.

Mark Hamrick, senior economic analyst at Bankrate, said there is much uncertainty in the months ahead.

“I think the path of inflation has been bumpy all along,” he told the Washington Examiner. “And, you know, it appears that perhaps the current part of the journey is a little more challenging for the Fed to get to its 2% target.”

There are a few gauges of inflation, but the consumer price index is the most closely watched one, and the personal consumption expenditures index is the one the Fed tracks.

CPI inflation was tracking at 3.1% in January and has now fallen to 2.7% after briefly dipping to 2.4% in September. PCE inflation began the year at 2.6% and has fallen to 2.3% after falling to a low of just under 2.1% in September.

The Fed raised interest rates to historic levels in response to inflation, with the central bank bringing its rate target to a peak of 5.25% to 5.50%. But the Fed finally cut interest rates in September, the first time in over four years. The Fed cut again in November and analysts expect more downward revisions in the year ahead.

Inflation was a top political consideration. Many voters said the past few years of high inflation was the biggest issue on their minds heading into the voting booth. The higher interest rate environment also made consumers like the economy was in bad shape, even as unemployment remained low and economic growth was hearty.

Fiscal outlook darkened

Also tied, in part, to the higher interest rates, the federal government’s fiscal outlook became even more uncertain in 2024.

The Congressional Budget Office estimated in October that the federal budget deficit for fiscal 2024 rose to $1.8 trillion, the highest in three years. That is an increase from $1.7 trillion the year before.

Interest costs continued to surge in 2024. Spending on interest on the public debt rose by $240 billion last year to a total of $950 billion.

Spending on Social Security also rose by about 8% because of cost-of-living increases raising the average benefit payment and a larger number of people receiving benefits.

Medicare spending also rose about 9% because of rising enrollment and higher payment rates for services.

Yields on 10-year and 5-year Treasuries have also been elevated despite the Fed cutting short-term rates. That means that spending on the interest on the federal debt is only set to increase, which raises cost of running deficits. That means that policies that add to deficits, such as Trump’s planned tax cut extensions next year, are more costly.

The total national debt of the U.S. hit $35 trillion in July and then, just a few months later, hit another milestone of $36 trillion. The federal debt per citizen has now climbed to about $107,000.

“We are only two months into the fiscal year, and we have already borrowed a staggering $622 billion, with $365 billion in the month of November alone,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Less than a month ago, our national debt reached a new high of $36 trillion, and the threat of even more debt looms large.”

Rising debt and deficits threaten popular programs like Social Security and Medicare, which millions of Americans rely on. The Medicare trust fund will be exhausted in 2036, and the combined Social Security trust fund will become exhausted in 2035, the program’s trustees projected in May.

Bitcoin boom

Bitcoin had a banner year, with its price rising from about $44,000 per coin at the start of 2024 to around $60,000 by mid-year and all the way up to over $100,000 in December.

For context, if someone would have converted their total $250,000 in savings and traditional investments into bitcoin at the start of the year, their nest egg would have grown to a staggering $603,000 — a 141% return on investment.

A big part of the bitcoin growth in 2024 came as a result of Trump besting Vice President Kamala Harris in the election. Cryptocurrency proponents see Biden, and by extension Harris, as hostile to the industry. But more than that, Trump embraced bitcoin on the campaign trail and groups associated with digital assets ended up supporting his election bid.

Since winning, Trump has tapped a crypto-friendly Securities and Exchange Commission chairman and treasury secretary. Trump also selected venture capitalist David Sacks as the first-ever “crypto czar.”

In good news for the industry that predated Trump’s win, the SEC finally allowed bitcoin spot ETFs in early 2024 after years of waiting from cryptocurrency advocates and hope from large institutions such as BlackRock and Fidelity that their applications would get approved.

Institutional acceptance increased for bitcoin this past year as well, further supporting the crypto space.

“I mean, now even Blackrock is recommending people have Bitcoin as part of their portfolios,” Brian Morgenstern, who is head of public policy at Riot Platforms, told the Washington Examiner. “So it’s a scarce asset with demand rapidly increasing.”

AI: the future?

Artificial intelligence came to the fore in 2024 and dominated headlines. There was an increasing adoption in a wide array of industries and stocks associated with the nascent technology, which proved to be cash cows.

Nvidia, a U.S. computer and software company, has seen its stock outperform even bitcoin, posting behemoth 170% gains since just the start of the year. Just one daily rally in February resulted in 16.4% gains.

The rapid growth of Nvidia, which specializes in the chips behind AI, in 2024 was fueled by a boom in interest in AI and the semiconductor chips that are needed to make it run.

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations,” Jensen Huang, founder and CEO of Nvidia, said after a positive earnings report earlier this year.

Tools like ChatGPT also came into common usage. ChatGPT and platforms like it are able to tap into AI to perform complicated tasks, such as designing spreadsheets and solving complex equations. They are also able to perform more menial tasks like providing tweaks to recipes and scouring the internet for movie reviews.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

It is yet to be seen just how big the AI boom is. Some investors think 2024 marked the beginning of an AI revolution, while others contend there is an AI bubble, akin to the dot-com bubble, about to burst.

“I think there’s reason to believe that this is a very significant point in our history with respect to the emergence of new technology,” Hamrick said. “But that does not mean that everybody comes out a winner with respect to what they’re investing.”

, This year featured much economic news, some concerning and some encouraging. Here are four of the economic stories that stood out in 2024. This past year was an election year, and the economy was voters’ biggest concern. Anger about years of too-high inflation helped tilt the election in President-elect Donald Trump’s favor. Additionally, bitcoin had a banner year; the government fell further into fiscal trouble, and investors poured billions of dollars into artificial intelligence, betting that it is the future. Inflation and the Fed Inflation has gradually trended down from a peak of about 9% in 2022, but this past year, consumers still felt the pain from four cumulative years of fast-rising prices. To close out 2024, goods and services are now generally about 20% more expensive than when President Joe Biden entered office. While inflation rapidly decelerated in the latter half of 2022 and in 2023, it declined this year, although not as fast as might have been hoped. The Federal Reserve is targeting 2% inflation, and while inflation still isn’t there, the Fed has made progress in its goals. Mark Hamrick, senior economic analyst at Bankrate, said there is much uncertainty in the months ahead. “I think the path of inflation has been bumpy all along,” he told the Washington Examiner. “And, you know, it appears that perhaps the current part of the journey is a little more challenging for the Fed to get to its 2% target.” There are a few gauges of inflation, but the consumer price index is the most closely watched one, and the personal consumption expenditures index is the one the Fed tracks. CPI inflation was tracking at 3.1% in January and has now fallen to 2.7% after briefly dipping to 2.4% in September. PCE inflation began the year at 2.6% and has fallen to 2.3% after falling to a low of just under 2.1% in September. The Fed raised interest rates to historic levels in response to inflation, with the central bank bringing its rate target to a peak of 5.25% to 5.50%. But the Fed finally cut interest rates in September, the first time in over four years. The Fed cut again in November and analysts expect more downward revisions in the year ahead. Inflation was a top political consideration. Many voters said the past few years of high inflation was the biggest issue on their minds heading into the voting booth. The higher interest rate environment also made consumers like the economy was in bad shape, even as unemployment remained low and economic growth was hearty. Fiscal outlook darkened Also tied, in part, to the higher interest rates, the federal government’s fiscal outlook became even more uncertain in 2024. The Congressional Budget Office estimated in October that the federal budget deficit for fiscal 2024 rose to $1.8 trillion, the highest in three years. That is an increase from $1.7 trillion the year before. Interest costs continued to surge in 2024. Spending on interest on the public debt rose by $240 billion last year to a total of $950 billion. Spending on Social Security also rose by about 8% because of cost-of-living increases raising the average benefit payment and a larger number of people receiving benefits. Medicare spending also rose about 9% because of rising enrollment and higher payment rates for services. Yields on 10-year and 5-year Treasuries have also been elevated despite the Fed cutting short-term rates. That means that spending on the interest on the federal debt is only set to increase, which raises cost of running deficits. That means that policies that add to deficits, such as Trump’s planned tax cut extensions next year, are more costly. The total national debt of the U.S. hit $35 trillion in July and then, just a few months later, hit another milestone of $36 trillion. The federal debt per citizen has now climbed to about $107,000. “We are only two months into the fiscal year, and we have already borrowed a staggering $622 billion, with $365 billion in the month of November alone,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Less than a month ago, our national debt reached a new high of $36 trillion, and the threat of even more debt looms large.” Rising debt and deficits threaten popular programs like Social Security and Medicare, which millions of Americans rely on. The Medicare trust fund will be exhausted in 2036, and the combined Social Security trust fund will become exhausted in 2035, the program’s trustees projected in May. Bitcoin boom Bitcoin had a banner year, with its price rising from about $44,000 per coin at the start of 2024 to around $60,000 by mid-year and all the way up to over $100,000 in December. For context, if someone would have converted their total $250,000 in savings and traditional investments into bitcoin at the start of the year, their nest egg would have grown to a staggering $603,000 — a 141% return on investment. A big part of the bitcoin growth in 2024 came as a result of Trump besting Vice President Kamala Harris in the election. Cryptocurrency proponents see Biden, and by extension Harris, as hostile to the industry. But more than that, Trump embraced bitcoin on the campaign trail and groups associated with digital assets ended up supporting his election bid. Since winning, Trump has tapped a crypto-friendly Securities and Exchange Commission chairman and treasury secretary. Trump also selected venture capitalist David Sacks as the first-ever “crypto czar.” In good news for the industry that predated Trump’s win, the SEC finally allowed bitcoin spot ETFs in early 2024 after years of waiting from cryptocurrency advocates and hope from large institutions such as BlackRock and Fidelity that their applications would get approved. Institutional acceptance increased for bitcoin this past year as well, further supporting the crypto space. “I mean, now even Blackrock is recommending people have Bitcoin as part of their portfolios,” Brian Morgenstern, who is head of public policy at Riot Platforms, told the Washington Examiner. “So it’s a scarce asset with demand rapidly increasing.” AI: the future? Artificial intelligence came to the fore in 2024 and dominated headlines. There was an increasing adoption in a wide array of industries and stocks associated with the nascent technology, which proved to be cash cows. Nvidia, a U.S. computer and software company, has seen its stock outperform even bitcoin, posting behemoth 170% gains since just the start of the year. Just one daily rally in February resulted in 16.4% gains. The rapid growth of Nvidia, which specializes in the chips behind AI, in 2024 was fueled by a boom in interest in AI and the semiconductor chips that are needed to make it run. “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations,” Jensen Huang, founder and CEO of Nvidia, said after a positive earnings report earlier this year. Tools like ChatGPT also came into common usage. ChatGPT and platforms like it are able to tap into AI to perform complicated tasks, such as designing spreadsheets and solving complex equations. They are also able to perform more menial tasks like providing tweaks to recipes and scouring the internet for movie reviews. CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER It is yet to be seen just how big the AI boom is. Some investors think 2024 marked the beginning of an AI revolution, while others contend there is an AI bubble, akin to the dot-com bubble, about to burst. “I think there’s reason to believe that this is a very significant point in our history with respect to the emergence of new technology,” Hamrick said. “But that does not mean that everybody comes out a winner with respect to what they’re investing.”, , , https://www.washingtonexaminer.com/wp-content/uploads/2024/12/economic-stories-2024.webp, Washington Examiner, Political News and Conservative Analysis About Congress, the President, and the Federal Government, https://www.washingtonexaminer.com/wp-content/uploads/2023/11/cropped-favicon-32×32.png, https://www.washingtonexaminer.com/feed/, Zach Halaschak,