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One-time $1,776 housing supplements are exempt under current law

By Mark Huffman of ConsumerAffairs

• The Treasury and the IRS confirmed that special housing-related payments made to service members in December 2025 are not taxable and should not be included in income.

• The one-time payments stem from a $2.9 billion congressional appropriation approved last summer to supplement the militarys basic allowance for housing.

• About 1.45 million eligible active-duty and reserve service members received $1,776 payments announced by President Trump as a pre-Christmas Warrior Dividend.

The Department of the Treasury and the Internal Revenue Service have clarified that supplemental housing payments issued to members of the uniformed services in December 2025 are exempt from federal income tax.

The payments were authorized under the One, Big, Beautiful Bill, enacted by Congress in July, which set aside $2.9 billion to boost the basic allowance for housing (BAH) paid to military personnel. In December, President Trump announced that roughly 1.45 million service members would receive a one-time payment ahead of the holidays, calling it a Warrior Dividend.

Eligible recipients received $1,776 payments funded by the congressional appropriation. The payments were made primarily to active-duty members in pay grades O-6 and below, as well as qualifying Reserve Component members of the Army, Air Force, Navy, Marine Corps, and Space Force who were eligible as of Nov. 30, 2025.

Exempted from gross income

Treasury and IRS officials said the payments are excluded from gross income under existing federal tax law. The law specifically exempts qualified military benefits from taxation, a category that includes basic allowance for housing payments and related supplements.

As a result, service members who received the December payments do not need to report the funds as taxable income on their federal tax returns.

But the underlying drivers of the rally may be shifting

By Mark Huffman of ConsumerAffairs

• Gold prices hit new record levels this week, continuing an extraordinary rally thats seen the metal surge roughly 84% over the past year.

• Broader forces driving the rally now include political risk and ETF inflows, beyond traditional safe-haven motives from past cycles.

• Investor behavior and institutional demand are standing out as particularly durable, suggesting todays surge may reflect deeper structural shifts rather than short-term speculation.

Global gold markets extended their dramatic run on this week, as prices climbed to yet new record levels and held firm through the latest trading session. Benchmark gold futures rose again, with spot prices trading above $5,000 per ounce a level once considered almost unthinkable continuing a rally that has pushed gains to roughly 84% compared with a year ago.

Market observers say this isnt merely a short-term blip or a technical rebound. Instead, a powerful constellation of forces is propelling demand for the precious metal, and some of these drivers differ in character from traditional gold rallies of the past.

Thomas Winmill, portfolio manager of Midas Funds, says a growing combination of foreign and domestic turmoil is driving the most recent rally.

Theres worry over neo-con type U.S. military involvement in Venezuela, Iran, Greenland, in U.S. blue cities, along with a possible $1.5 trillion U.S. Defense Department budget all with the potential for exacerbating the U.S. fiscal deficit and national debt that could hammer the value of the U.S. dollar, Winmill told ConsumerAffairs.

Safe haven, but with a political twist

Gold has long been prized as a safe-haven asset in times of uncertainty. Classic drivers such as geopolitical tensions, global trade friction, and central bank diversification continue to underpin investor interest. Yet this surge appears to include a growing element of political risk pricing.

According to early reports from global markets, investors are increasingly positioning gold as a hedge against policy uncertainty emanating from Washington, with some analysts linking substantial inflows to skepticism about U.S. political and economic direction.

Additionally, exchange-traded funds (ETFs) focused on gold have attracted billions in net inflows this year, particularly from European investors, reinforcing the rally and supporting prices at historically high levels.

Change in investor behavior

Despite lofty price levels, market commentators point to unusually strong buy-the-dip behavior among holders. Rather than treating price spikes as opportunities to exit and take profits, many investors are viewing pullbacks as chances to add exposure a sign that confidence in golds role in portfolios may be more entrenched than in past cycles.

Deficits, debt, and lower U.S. interest rates, long or short term, are likely to make the U.S. dollar less attractive, and increase the relative price of gold, Winmill said.

Wall Street analysts are responding accordingly: major financial institutions have repeatedly raised their price forecasts for gold in 2026, with some outlooks projecting further upside as conditions evolve.

Silver joins the rally

The wider precious-metals complex is also posting notable gains, with silver reaching record highs in some markets this week. These movements suggest that demand is not isolated to gold alone, but reflects a broader appetite for hard assets amid a mix of risk perceptions and portfolio diversification strategies.

Historically, gold rallies have been driven primarily by broad economic uncertainty high inflation, rapid monetary easing, or crises such as recessions or system shocks. In contrast, analysts say the current advance appears to blend traditional safe-haven demand with political risk hedging, sustained institutional inflows, and investor confidence in gold as a structural portfolio asset.

While many long-standing factors remain in play, this combination particularly the heightened role of political uncertainty and ETF inflows may be what distinguishes the 2026 surge from earlier episodes.

Consumer confidence is at its lowest point in more than a decade

By Mark Huffman of ConsumerAffairs

• Consumer confidence tumbled sharply in January, with The Conference Board Consumer Confidence Index falling 9.7 points to 84.5, its lowest level in more than a decade.

• Both current conditions and future expectations weakened, as concerns about jobs, business conditions, and income prospects deepened across all demographics.

• Pessimism outweighed optimism, with inflation, prices, politics, and trade increasingly cited as top economic worries by consumers.

Consumer confidence plunged in January, erasing Decembers brief rebound and signaling renewed anxiety about the U.S. economic outlook.

The Conference Board said its Consumer Confidence Index dropped to 84.5 (1985=100), down from an upwardly revised 94.2 in December. The January reading marks the lowest level since May 2014 and falls below even the depths reached during the COVID-19 pandemic.

Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened, said Dana M. Peterson, chief economist at The Conference Board. All five components of the Index deteriorated.

Broad-based decline

The decline was broad-based. The Present Situation Index, which reflects consumers views of current business and labor market conditions, fell 9.9 points to 113.7. Assessments of business conditions slipped to barely positive territory, while perceptions of job availability weakened further. The labor market differentialthe share of consumers saying jobs are plentiful minus those saying jobs are hard to getcontinued to deteriorate.

The Expectations Index dropped 9.5 points to 65.1, far below the threshold of 80 that typically signals a recession ahead. Expectations for business conditions, job availability, and household income six months from now all declined, with views on business and labor market conditions sinking deeper into negative territory.

Confidence weakened across every demographic group. On a six-month moving average basis, sentiment fell for all age and income brackets, though consumers under 35and Gen Z in particularremained more optimistic than older generations.

By income, confidence slipped across the board, with households earning less than $15,000 remaining the least optimistic. Confidence also declined among all political affiliations, with Independents recording the sharpest drop.

Gloomy mood

Consumers written comments underscored the gloomy mood. References to inflation and pricesespecially food, groceries, and oil and gasremained elevated. Mentions of tariffs and trade, politics, and labor market concerns increased, while references to health insurance and war also edged higher.

Despite a Federal Reserve rate cut in December, consumers remained uneasy. Fewer respondents expected interest rates to be higher a year from now, but inflation expectations were mixed, with the average ticking up even as the median declined. Expectations for stock prices retreated after a brief rise in December.

Household finances offered a mixed picture. Views of families current financial situations improved slightly after Decembers downward revision, but expectations for future finances turned less positive again. Meanwhile, recession fears persisted: while fewer consumers said a downturn was somewhat likely or not likely, the share saying a recession is very likely or already underway edged higher.

Cautious spending

Caution also showed up in spending plans. Fewer consumers said they planned to buy big-ticket items over the next six months, while maybe and no responses increased.

Auto buying plans were mixedexpectations for new car purchases weakened, but interest in used cars rose. Homebuying intentions continued to fall, and plans to purchase appliances, furniture, and TVs declined. Smartphones remained the lone bright spot in electronics.

Planned spending on services also softened, though not uniformly. Restaurants, bars, and takeout remained the top spending category and continued to rise.

Consumers also reported stronger intentions to spend on travel-related services such as hotels, airfare, and motor vehicle servicesan unexpected development given the sharp decline in reported vacation plans, particularly for domestic travel.

Passengers should not assume the airline will automatically refund their fare

By Mark Huffman of ConsumerAffairs

• Millions of airline passengers were stranded over the weekend as a powerful winter storm snarled air travel across large swaths of the country.

• Flight cancellations and long delays raised fresh questions about what airlines owe travelers when weather disrupts schedules.

• Consumer advocates say many passengers dont realize they still have important rights, even when storms are to blame.

A major winter storm that swept across the U.S. this weekend forced airlines to cancel thousands of flights and delay many more, leaving travelers stuck in airports, sleeping in terminals, or scrambling to rebook plans. While airlines often point to severe weather as an unavoidable act of God, passenger advocates say travelers still have clear rights and options when flights are canceled or significantly delayed.

Under U.S. Department of Transportation rules, passengers are entitled to a full refund if their flight is canceled and they choose not to travel, even if the cancellation is caused by weather. That refund must be issued to the original form of payment and cannot be limited to airline vouchers or credits, unless the passenger agrees to accept one.

Its not just weather or lost luggage consumers are worried about; their trust in the travel system is eroding, said Matt Layton, LegalShields senior vice president of consumer analytics. New confusion regarding passenger compensation exposed how fragile the travel ecosystem can be. This shift in confidence is driving real behavior changes.

What usually happens

For travelers who still want to fly, airlines generally rebook passengers on the next available flight at no additional cost. However, rebooking policies vary widely, especially during widespread disruptions when seats are scarce. Some airlines may place passengers on partner carriers, while others restrict rebooking to their own flights.

What airlines typically do not have to provide during weather-related disruptions is compensation for hotel stays, meals, or ground transportation. Unlike the European Union, which mandates cash compensation for many delays, U.S. airlines are not required to pay passengers when weather is the cause. A recent LegalShield survey found thats a source of confusion.

Weve spent our hard-earned money for the airline to get us to our family and friends, and many people believe that if that doesnt happen, the airline will automatically pay us back, said Wayne Hassay, a LegalShield provider lawyer with Maguire Schneider Hassay, LLP in Ohio. That is simply not true.

While federal guidelines address issues such as overbooking, extended tarmac delays, and some controllable events, Hassay said most additional compensation is governed by individual airline policies even if passengers ultimately reach their destination.

Costly confusion

The consequences of that confusion can be costly. LegalShields research found that 63% of travelers lost money due to travel disruptions, and one in four lost more than $500.

More than half said they wasted significant time dealing with delays, customer service problems, appeals, and claims. At the same time, 25% admitted they are unfamiliar with their travel rights, and 55% said they lack confidence in asserting those rights when something goes wrong.

Consumer experts recommend that travelers affected by the storm keep all documentation, including boarding passes, delay notifications, and receipts for unexpected expenses. While airlines may not be obligated to reimburse those costs, some will consider goodwill refunds if passengers submit a complaint.

Credit card travel protections can also play a role. Many premium credit cards include trip delay or cancellation insurance that covers meals, hotels, and other expenses when severe weather disrupts travel.

With winter far from over, advocates say the key takeaway is preparation and persistence. Know your rights, ask questions at the airport, and dont assume the airlines first answer is the final one,experts advise. Even in bad weather, passengers are not powerless.