On The Money — Inflation fight hits Black Americans particularly hard

Experts say Black Americans are bearing the brunt of the federal government’s efforts to stanch inflation. We’ll also look at how Democrats are seizing the rising costs on the campaign trail, why officials say Virginia is bound by a new California rule phasing out gas-powered cars, and more.

But first, Megan Thee Stallion has been tapped for a new role — and it’s out of this world. 

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane and Aris Folley. Subscribe here.

Black Americans disproportionately hit by rate hikes

The federal government’s efforts to stanch inflation are disproportionately impacting Black Americans.

The Federal Reserve has hiked interest rates in the hopes of cooling off a red-hot economy, but its actions are hitting Black Americans — who have historically been squeezed out of home ownership and affordable loans — the hardest. 

• Fed interest rate hikes are meant to slow consumer and business spending by making debt more expensive, including mortgages.
  
• Mortgage rates rise as the Fed hikes its baseline interest rate higher, making monthly home payments more expensive for anyone seeking a new home or those who purchased one with an adjustable interest rate loan. 

“African Americans have the lowest homeownership rates among the four major racial groups in the country,” Romie Tribble, professor of economics at Spelman College and secretary of the National Economic Association, told The Hill.  

“It’s now going to be more difficult for them to acquire and to also keep a home,” Tribble said. 

We explain why here.

LEADING THE DAY

Democrats peg inflation to corporate greed on campaign trail 

Democrats are vowing to crack down on corporate greed and price gouging on the campaign trail as the party aims to quell voters’ concerns over decades-high inflation.

Economists widely view supply and demand as the driving force behind the cost of goods and services, not arbitrary price hikes. But Democrats point to the fact that big companies are profiting from surging inflation.   

• U.S. nonfinancial corporate profits soared to $2 trillion for the first time in the second quarter of 2022, while corporate profit margins as a share of the economy rose to the highest level in more than seven decades, according to newly released Bureau of Economic Analysis data.
  
• Following President Biden’s lead, Democrats are taking aim at energy giants and meatpacking companies that recently notched record-shattering earnings on the back of higher prices.
  
• Inflation remains the top issue on Americans’ minds in swing states like Arizona and Wisconsin, and the corporate greed argument appears to resonate with voters. Voters primarily blame “companies’ attempts to maximize profits” and supply chain issues for fueling red-hot inflation, according to a June Morning Consult poll. 

Karl has more details here.

CALIFORNIA LOVE

Virginia AG says state bound by California rule phasing out new gas-powered cars 

California’s newly-announced rule barring the sale of new gas-powered cars in 2035 will apply to Virginia as well under the terms of a 2021 state law, Attorney General Jason Miyares’s (R) office confirmed to The Hill on Monday.  

In 2021, the state General Assembly, where Democrats then held majorities in both chambers, passed a law requiring the state to adopt the same automobile standards as those adopted by the California Air Resources Board (CARB). Although Democrats lost their majority in the state House of Delegates in 2021, efforts to repeal the legislation in this year’s legislative session were unsuccessful.

• California’s new rule, passed last week, will also apply to Virginia, Miyares spokesperson Victoria LaCivita confirmed to The Hill. She added the state’s attorney general “is hopeful that the General Assembly repeals this law and discontinues any trend that makes Virginia more like California.” 
  
• Virginia is one of 15 states that have adopted an earlier CARB standard that imposes stricter tailpipe emissions standards than the federal rule. Under the terms of the 2021 law, the California rule would not take effect until 2024, giving Republicans in the legislature at least one more chance to attempt repeal, particularly if they take the state Senate in 2023.  

The Hill’s Zack Budryk has more info here. 

PRIVACY THREAT 

FTC alleges data broker exposes users to violent threats by selling location data

The Federal Trade Commission (FTC) alleges data broker Kochava exposes people to threats of stalking, discrimination and violence by selling geolocation data revealing visits to sensitive locations, including reproductive health clinics, according to a complaint filed Monday.

• The data sold by Idaho-based Kochava can be used to identify specific places an individual visited by plotting latitude and longitude coordinates, the FTC alleged in its lawsuit.
  
• The location data is also not anonymized, meaning it is possible to identify a mobile device’s user or owner.  

The FTC alleged that the sale of geolocation data puts consumers at risk by revealing information about visits to sensitive locations. In addition to reproductive health clinics, the agency said the data can be used to track visits to places of worship, homeless or domestic violence shelters and addiction recovery centers.  

The Hill’s Rebecca Klar has more here. 

Good to Know

Teachers in the U.S. have seen their salaries decline over the past decade, with some educators paid anywhere from 5 to 18 percent less than the national average wage.  

A new analysis dives into the average teacher salaries from the National Center for Educational Statistics and the Bureau of Labor Statistics, and it ranks the best and worst average teacher salaries in comparison to the average salary for all other occupations.  

These are some of the worst-paying states for teachers in the 2020-2021 academic year. 

Here’s what else we have our eye on: 

• AP: “Elon Musk’s legal team is demanding to hear from Twitter’s whistleblowing former security chief, who could help bolster Musk’s case for backing out of a $44 billion deal to buy the social media company.”
  
• Marijuana use reached a record high in new polling, as for the first time more Americans said they smoke marijuana than reported smoking cigarettes in the last week. 
  
  
  

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

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