Fed's Goolsbee 'Uneasy' About View of Tariffs as One-Time Shock
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Forbes
28 minutes ago
- Forbes
Fed Expected To Cut Interest Rates, Though Inflation May Be Picking Up
WASHINGTON, DC - SEPTEMBER 18: Federal Reserve Chairman Jerome Powell speaks during a news conference following the September meeting of the Federal Open Market Committee at the William McChesney Martin Jr. Federal Reserve Board Building on September 18, 2024 in Washington, DC. The Federal Reserve announced today that they will cut the central bank's benchmark interest rate by 50 basis points to a new range of 4.75%-5%. (Photo by) Getty Images Fixed income markets fully expect that the Federal Open Market Committee will cut interest rates on September 17. However, economic data suggests that the FOMC may have to manage a monetary policy trade-off over the coming months. That's because the jobs market appears to have been weakening between May and July. That would typically call for lower rates. However, inflation may be picking up slightly on recent data. If that trend continues it might imply higher rates are needed. Of course, the FOMC only has a single policy tool, interest rates, so if unemployment rises and inflation picks up, then the FOMC's decision making may be made more complicated. The July Employment Situation Report saw 73,000 nonfarm payrolls added for July, which was itself a relatively slow pace of growth compared to prior months. However, figures for May and June were also revised down significantly to under 20,000 nonfarm payrolls added in both cases. In contrast, over 100,000 jobs had been added monthly over most of the prior 2 years. That said, the unemployment rate has been relatively stable since summer 2024, but if the recent slow pace of job creation continues, it may signal downside risk for the economy. The jobs report for August will be released on September 5, offering further data before the FOMC next meets. Recent data has shown some acceleration of inflation, too. July Producer Price Indexes showed a relatively pronounced rise in prices. In addition, there were some signs of rising prices in the July Consumer Price Index. For now, overall inflation remains relatively mild. For example, annual inflation is close to 3% to July depending on the metric used. However, the FOMC's annual target is 2% and inflation could accelerate further as the impact of tariffs, which in many cases have only been recently implemented, are felt. That said, some policymakers have said they are willing to look through any tariff-related inflation, believing it will be one-off in nature. If so, that makes it an easier decision to lower rates if there are concerns about a softening job market. At the last FOMC meeting in July both Christopher Waller and Michelle Bowman dissented, preferring to lower rates. That and the likely appointment of Stephen Miran to the FOMC before the September meeting, suggest added pressure for a rate cut. That's because President Trump is known to favor lower rates, and he likely proposed Miran with the belief that he would vote to lower rates. It seems likely that the FOMC will cut interest rates in September. There are still more economic reports to come before that meeting, but fixed income markets strongly predict a rate cut. That said, there are signs that inflation could be accelerating, that may not prevent a September cut, especially if signs of a soft labor market continue, but could present challenges for policy makers later in 2025 if they have to choose between restraining inflation and supporting the jobs market.
New York Post
an hour ago
- New York Post
More US tourists visit Canada than Canucks travel to America for first time ever: report
Tourists from the Great White North are giving the US the cold shoulder. In a surprise twist to the ongoing trade war between North American neighbors, July marked the first time ever more Americans road-tripped it to Canada, than vice versa. That month saw 1.8 million US car trips into Canada, compared to 1.7 million Canadian excursions to the Land of the Free, new data from Statistics Canada released Monday found. Cross-border trips between Canada and the US slowed in July, normally the busiest month of the year. Bloomberg via Getty Images Travel in both directions is slumping, however, as trade tensions between the two allies boil over. US visits to its northern neighbor dropped 7.4% from last July — normally the busiest travel month of the year — while Canadian road trips to America nosedived by a staggering 37%. It marked the sixth consecutive month of year-over-year declines in tourism, following President Trump's February announcement that he was implementing tariffs on Canada, while also joking that he planned to make the country the 51st state, which led to Canucks cancelling their US vacations in droves. 1.8 million Americans visited Canada by car in July. AMVShutter – The two countries blew past an Aug. 1 trade-deal deadline and are now locked in a tit-for-tat tariff battle. The US is targeting Canadian goods not covered by the Canada-United States-Mexico Agreement with tariffs of up to 50%, and Canada imposing 25% counter-tariffs on billions of US exports.
Fast Company
an hour ago
- Fast Company
Mark Cuban and Sam Altman just warned about disappearing jobs and the need to learn AI
OpenAI CEO Sam Altman isn't shy about discussing the future of AI. As the CEO of a market leading company, his predictions carry plenty of weight, such as his worry that AI could make things go 'horribly wrong,' or that AI agents will completely transform the workplace. Nor is billionaire Mark Cuban, who also sees vast changes to an AI-dominated workplace. Altman's recent remarks to finance executives at a Federal Reserve conference on large banks and capital requirements included his belief that entire job categories will be eaten up by AI. He said customer service is all but completely ready for an AI takeover right now, as reported by the Guardian newspaper. 'That's a category where I just say, you know what, when you call customer support, you're on target and AI, and that's fine,' he said. When a user calls a hotline now, AI answers, and it's like 'a super-smart, capable person,' Altman explained, adding that 'there's no phone tree, there's no transfers. It can do everything that any customer support agent at that company could do. It does not make mistakes. It's very quick. You call once, the thing just happens, it's done.' You may have already encountered an AI customer service system, or at the very least spoken briefly to one before being forwarded to a person with the info you're seeking. And anecdotally, if Altman's promise of no mistakes proves true, then that's a huge sell for customer service departments—and consumer satisfaction. (We all know how frustrating it can be calling these lines.) What an AI can offer under these circumstances is also clearly defined: customers probably call with a discrete set of common issues, and the AI can be trained on what to do. Subscribe to the Daily newsletter. Fast Company's trending stories delivered to you every day Privacy Policy | Fast Company Newsletters But the next industry Altman said was ripe for an AI takeover is more complex, requiring deep knowledge and empathy, and there are much higher stakes at play. According to the AI CEO, AI is already better than human doctors. It can, 'most of the time,' surpass human physician skills, he argued, suggesting it's 'a better diagnostician than most doctors in the world.' But then he pointed out a very human truth: 'people still go to doctors,' he said, and he added that he felt the same, 'maybe I'm a dinosaur here, but I really do not want to, like, entrust my medical fate to ChatGPT with no human doctor in the loop.' That at least aligns with warnings from medical experts who say that while AI may be useful for medical advice under some circumstances, like helping to make medical notes, it's just too subject to misinformation errors to be trusted to give mental health advice or diagnoses, for example. In fact a group of therapists recently warned of the danger in doing so. Altman also told the bankers that he's worried near future AIs could be used by bad actors, perhaps based overseas, to attack the U.S. financial system. He cited the issue of AI voice clones as a direct risk. While he's not predicting AI will steal banking jobs here, he is essentially warning that the entire industry could be upended by AI, used the wrong way. You may think Altman is being unnecessarily doomy here. In this case, you may be more aligned with the thinking of billionaire entrepreneur Mark Cuban. He's just suggested that in his expert mind, AI will become a 'baseline' workplace skill inside five years. Essentially he thinks that 'like email or Excel,' everyone, from fresh graduates to practiced entrepreneurs, will have to master AI to succeed at their tasks. in an interview with Fortune, Cuban predicted that thanks to the force multiplying effects AI can have, 'we'll see more people working for themselves' thanks to the rise of AI assistants, possibly powered by agent AI tech, which can transform 'solo founders into full teams.' And worse, if you're note already using AI to 'move faster or make smarter decisions, you're behind,' he said. While framed more positively than Altman's statements, a closer look says Cuban is still predicting whole classes of jobs will disappear inside five years. Why would a startup CEO need a personal assistant, a coding expert or a marketing adviser if all those tasks could be done by next-gen AI? advertisement All of this, while interesting, could be dismissed as mere PR for the AI industry, but you should actually care about this expert advice. Altman's warnings could have you looking at what tasks you already feel comfortable outsourcing to an AI tool instead of a human worker. And then, taking Cuban's advice, you should consider taking time to properly educate yourself about the promises and risks of AI technology, and also plan on upskilling or reskilling your existing staff. The potential efficiencies AI promises mean they could — By Kit Eaton This article originally appeared on Fast Company's sister publication, Inc. Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
