Americans are moving across the border to afford life. Now the Fed may raise rates

Americans living in a U.S. border city are moving back across the border because groceries, bills and housing costs have become too expensive, while labor's share of national income has fallen to roughly 53%. Now oil is pushing inflation higher and markets are pricing a possible Fed hike. Americans commute from Mexico to avoid Trump's cost-of-living crisis… Laredo turned red for first time in 100 years in 2024. But skyrocketing costs and immigration crackdowns are causing voter's remorse Row upon row of sparkly dresses sit undisturbed on their hangers at the Hollywood Fashion store in Laredo, Texas. At the moment, people rarely have the money to go out in the southern border city, and they certainly don't have the money to splash out on a new outfit if they do. Yvette Rita, a 24-year-old shop assistant, was working the stock room in the back of the store on a sleepy Saturday afternoon in August. 'It's been bad for the past couple years,' she said. 'But it's been really difficult recently with the price of bills, groceries and everything. I've had to move back to Mexico.' Ms Rita was born and raised in Laredo, the largest inland port on the US-Mexico border, meaning she is an American citizen. The city is so close to Nuevo Laredo, its twin suburb just over the Rio Grande, that if you're in the wrong lane on the I-35, you suddenly find yourself driving into Mexico. Expensive groceries getting less safe to eat… Plenty of Americans feel like they're forking over a fortune for groceries—only to get hit with a recall notice that forces them to throw that expensive food out. Read Also: CNN signal goes dead for 30 minutes. Workers getting smallest slice of the pie on record… Since 2000, the value of the S&P 500 stock index has gained about 600%. Over the same period, inflation-adjusted worker earnings have climbed just 12.5%. Europe increasingly angry at USA over world economy… The Trump administration's tariff policies have gotten flak from economists and politicians for raising prices for Americans and punishing U.S. allies White House turns up pressure on Warsh's central bank… Surprisingly healthy employment data has tipped expectations for a rate hike at the Federal Open Market Committee's (FOMC) meeting higher this week, with interest rate traders now placing the likelihood at 58.4%. According to CME's FedWatch, nearly 60% of investors are betting on a 25bps hike to 3.75% to 4%, with the remainder of bettors suggesting the Kevin Warsh-led central bank will instead announce a hold. The renewed call for a hike comes courtesy of a Bureau of Labor Statistics (BLS) report Friday, which showed that the U.S. economy added 162,000 jobs in August with the unemployment rate unchanged at 4.1%. Meanwhile, inflation data, the other side of the Fed's two-pronged mandate, isn't behaving as helpfully. The BLS's latest report, released in mid-August, showed the all-items index for the past 12 months sat at 3.4%—well ahead of the FOMC's 2% target. The next Consumer Price Index report is due to be released on Friday, but with supply-side shocks like the Middle East conflict and tariffs still rumbling on, analysts expect the data to further prove the need for a hike at the next FOMC meeting, which will conclude Sept. 16.