RBNZ Policymaker's Closed-Door Talk Raises Transparency Concerns
An external member of the Reserve Bank of New Zealand's Monetary Policy Committee will give a rare presentation today, but it will be behind closed doors.
Prasanna Gai will speak at the Auckland Business Chamber on the topic of 'Monetary Policy and Trade Uncertainty.' It is an 'exclusive lunch gathering' where Gai will 'share his expert insights on interest rates,' according to the Chamber's website.
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Yahoo
an hour ago
- Yahoo
Commentary: How Trump could get the lower rates he seems to desperately want
It would be fun to be Federal Reserve Chair Jerome Powell—for about 15 minutes. Powell and the Fed have faced relentless bashing from President Trump, and now Vice President JD Vance has joined Trump in a tag-team match against the central bank. After the May inflation data showed prices largely under control, Vance attacked the Fed for refusing to lower interest rates. "The president has been saying this for a while, but it's even more clear: The refusal by the Fed to cut rates is monetary malpractice," Vance posted on social media. Nice alliteration, but Vance is wrong. The Fed is monetarily motionless for good reason, which everybody involved with financial markets understands. Inflation is down but probably going back up, and Trump himself is the reason. The new tariffs Trump has been imposing on imports will directly raise the cost of some $3 trillion worth of products Americans buy every year. Higher consumption taxes = higher prices = higher inflation. Lowering interest rates would be stimulative, and more spending might make the coming Trump inflation spurt worse, not better. If a plainspoken person were to impersonate Powell, he might say this: "Dear Mr. President, if you'd repeal all of your tariffs, the Fed would be happy to cut interest rates right away." That would be the fun part—cutting through Trump's doublespeak and putting the blame for higher interest rates squarely on him, where it belongs. Then the fun would abruptly end. The notoriously touchy Trump obviously hates criticism and doesn't want anybody to correct him, even the world's most powerful banker. Trump has already threatened to fire Powell for not lowering rates. Trump probably lacks the authority to do that, and markets would rebel. Yet part of Powell's job is to keep markets calm, not roil them by provoking a combative president. Read more: How much control does the president have over the Fed and interest rates?Trump's problem is that he wants two incompatible things: tariffs and loose monetary policy. The Fed already has a credibility problem for waiting too long to attack inflation as it drifted higher in 2021 and 2022. Powell is trying to rehabilitate the Fed's reputation, and he clearly doesn't want to make the same mistake in a different way. Cutting rates at the onset of another inflationary cycle everybody sees coming would be monetary madness. Trump's tariffs probably won't cause inflation as severe as former President Joe Biden had to deal with in 2022, when the inflation rate hit 9% and gasoline prices crested $5 per gallon. But they'll push prices up by enough to keep the Fed on its toes. Most economists think Trump's tariffs will boost inflation from 2.4% now to around 3.5% or 4% by the end of 2025. Read more: 5 ways to tariff-proof your finances In an alternate universe with no Trump tariffs, the Fed might already be cutting interest rates. It started cutting short-term rates last September and brought them down by a full percentage point within three months. It was ready to keep going. At the start of the year, investors put the odds of a Fed rate hike by late June at about 77%, according to the CME FedWatch tool. Those odds now are less than 3%. Many forecasters now think the Fed won't cut rates until the end of the year, and then only if tariff-induced inflation seems relatively mild and short-lived. Powell himself has spelled this out in his usual Fedspeak. "If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment," the Fed chair said in May. "Our obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem." Trump's own advisers, including Treasury Secretary Scott Bessent, understand how the Fed operates, and they're probably telling Trump as much. But Trump, as always, is playing a double game. While he truly does want lower rates, he also wants ready villains so if something goes wrong, he can say, "See, I was telling you all along. The Fed is screwing everything up." The bigger threat to the economy at the moment is Trump's tariffs, not the level of interest rates. If Trump unwound his trade war tomorrow, most Americans would benefit because tariff-induced price hikes would disappear and the Fed would be able to start cutting rates. But Trump won't do that, so the next best thing, to him, is tariffs with a side dish of monetary mewling. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 hours ago
- Yahoo
Student loan rates & refinancing: What borrowers should know
Andrew Pentis, Bankrate consumer lending analyst and certified student loan counselor, joins Wealth with Yahoo Finance Senior Reporter Allie Canal to discuss student loan interest rates and to explain when borrowers might want to consider refinancing their loans. To watch more expert insights and analysis on the latest market action, check out more Wealth here. All week, we're giving you everything you need to know about paying back your student loans. Today it's all about interest rates and refinancing. An interest rate is basically the fee a lender charges for borrowing money. It is usually expressed as a percentage of the total principle amount owed. When refinancing, a borrower will swap their original loan for a new one, usually at a lower interest rate. Joining us now to discuss is Andrew Pentis, he's Bankrate consumer lending analyst and a certified student loan counselor. So Andrew, if you're just starting this process, what's the easiest way for borrowers to first check their current student loan interest rates? So they know the baseline of where they're starting. Yeah, it really depends on what your type of loan is. So if you have a federal student loan, the best way to check your current student loan interest rate is to log into your account at You can also talk to your federal student loan servicer, though that's easier said than done with long wait times and a diminished Department of Education. But in terms of your private student loans, yeah, check your statements. If you receive a paper bill in the mail, or contact your lender directly or log into their online portal if you can, but it should be fairly easy to collect those rates. So what would you consider a quote unquote good rate for a student loan right now, and what should borrowers aim for if they're shopping around or thinking about refinancing? Yeah, a good rate is lower than the rate you currently have and the lowest possible rate that you can qualify for. That's the short answer. Uh, but for context, federal student loan interest rates have been in the single digits for a long time. It was recently announced that rates for next school year will actually descend a bit. We're in a higher rate environment for those private student loan rates and refinancing rates, but still there are single digits single digit rates out there. So if you do have good credit or a creditworthy cosigner, you can lower your interest rate through refinancing, it can be really wise. When does it actually make sense to refinance and when should borrowers avoid it, especially if they do have some of those federal loans? The slam dunk situation for refinancing your student loans is if you already have a private student loan with a high interest rate. And that's because if you refinance it to a lower rate, you're not giving anything up. You might even switch to a better lender. But the more complicated situation is if you have federal student loans and you're considering refinancing those or lumping those into a refinance application with your private loans. And the reason it's complicated is that federal loans contain a lot of safety nets and protections, like access to income driven repayment plans that cap your dues at a percentage of your monthly income, as well as pathways to loan forgiveness. So refinancing those loans will strip those benefits away and turn the federal loans into a private loan permanently. So you really want to tread cautiously about refinancing those government exclusive loans. You mentioned better lenders. So if someone does decide to refinance, what types of lenders should they be considering? All types, there are credit unions, banks, online lenders and marketplaces like Bankrate as well as state guaranteed and state funded agencies that offer student loan refinancing. So just like with any other consumer financial product, it really helps to survey the landscape, check in with different types of lenders, and that way you hopefully get very various offers that you can compare and get the best deal possible for your situation. And given the current economic uncertainty, what are some guidelines that borrowers should keep in mind before refinancing or locking in that new rate? Yeah, the thing to harp on here really is that if you have that federal student loan and you're considering refinancing it, you know, as you mentioned, given these uncertain economic times, you really should should be hesitant to refinance those federal student loans, at least until the dust settles. And the reason for that again is that if you keep your federal student loan and something happens, you know, maybe you lose your employment or lose some of your income, you have access to some relief through that federal student loan. So whether it be a deferment or forbearance that pauses your monthly dues, or that income driven repayment plan that caps your monthly payment, those are really important protections to have when, you know, you might not be sure, for example, that you're holding onto your job. So definitely that's the best advice for now. We've been talking a lot about the Federal Reserve, how they could potentially lower interest rates sooner than expected. If you're considering refinancing now, can you refinance multiple times, or should you wait and try and slow play it? Absolutely. This is not a situation where you have to feel like you need to time the market, because if you can get a lower interest rate right now, say by refinancing a private student loan, it could save you lots of money and interest. And then yes, say that rates descend in 2026 or later and you want to refinance again, you can absolutely do that, assuming that your credit has maintained and you've built up a positive payment history on your existing refinance loan. Andrew, some smart tips for those borrowers. Thank you so much. Appreciate it. Thanks for having me. Sign in to access your portfolio
Bloomberg
4 hours ago
- Bloomberg
Trump Calls for Fed Rate Cut, Says He Won't Fire Powell
00:00 I like long term cheap debt, but a lot of the debt comes through because Biden that's what he didn't do it. I'm sure he didn't know anything about it, but somebody approved short term debt. It's all over the place and it comes due starting very soon. And if we would lower the interest rates by one point, we pay about one point less. That's $300 billion a year. Can you believe at one point if it lowered by two points? We pay $600 billion a year, leases for years, ten years, 12 years, whatever we make it. But we can't get this guy to do it. And the fake news is saying, Oh, if you fired him, it would be so bad. It would be so bad. I don't know why it would be so bad, but I'm not going to fire him. I just want him to you know, we call him too late, right? Two ladies is, like, too tall. Jones. He was too tall. Tall. And I just say this because we want to get rid of inflation. And we have, but we're going to be paying more for debt. And all he has to do is lower it. Europe's done ten lowering. We've done none. And nobody understands that. Actually today, when the numbers came out, they were so good. You saw yesterday's numbers. Incredible. No inflation. Today's numbers. Today just came out. Same thing. No inflation. They're all shocked. All these guys are watching from business, CNBC and all of these different networks. Maria BARTIROMO actually got it right. She's been getting it right for a long time. That one. I hope she's appreciated. And Joe Kiernan has been very good at CNBC, I must tell you. But other people aren't so good. But I will say that they are just they can't believe what's happening. But if I could, because we can discuss oh, we get a lot of press, we get a lot of cameras rolling right now. Not that I like doing it because I don't. But if we take if we cut our interest by 1.4 years, we save 300 billion. If we get it by two points, we save because it's pretty equivalent. We're going to save. We're going to spend 600 billion a year, 600 billion because of one numbskull that sits here. I don't see enough reason to cut the rates now. And the problem he's got is that and I explained here, look. If inflation went up. Cut your rates now. There's no inflation. We got it down. We got prices down, we got gasoline down. And you'll keep it going down. But gasoline's down. We drill, Let's drill, baby, drill. That's what it's why it's going down. But we all that but think of it. I said to him, he was in my office a couple of days ago. I said, if you. Think there's inflation. Let's find out, because I think we're going to keep it down. I think gasoline is going to be so far down. Oil energy has so much in it. We have so much energy. We don't know what to do with it. But let's say there was inflation in a year from now. Raise your rates. I don't mind. Raise your rates. I'm all for it. I'll be the one to be calling you. He'll be too late for that, too. But raise your rights. You don't have to keep them up here. If it's going to go up, I'm okay with you raising, but it's down.
