Former Fed vice chair Richard Clarida: Fed is happy to sit on their hands over the coming months
Richard Clarida, former Fed vice chairman and PIMCO global economic advisor, joins 'Closing Bell' to discuss the biggest risk going forward for the Federal Reserve.
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Yahoo
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Trump Wants the Fed to Cut Interest Rates by a Full Point. That Normally Takes a Recession
President Donald Trump demanded the Federal Reserve lower its benchmark interest rate by an entire percentage point. The Fed, which operates independently of White House control, has resisted Trump's call to lower interest rates. Lower rates could boost the economy but risk igniting inflation. The Fed typically adjusts its interest rate a quarter point at a time: the last time it cut a full point was in March 2020 when the pandemic Donald Trump renewed his calls on the Federal Reserve to lower its benchmark interest rate Friday, and this time, he had a specific (and huge) ask in mind. In a series of social media posts Friday morning, Trump pointed to the economy's recent track record of solid job growth and cooling inflation, and taunted Federal Reserve Chair Jerome Powell for not having lowered interest rates sooner. Trump said the central bank should lower its influential fed funds rate by "a full point," saying it would be economic "Rocket Fuel!"The Fed adjusts its fed funds rate, which influences borrowing costs on all kinds of loans, to keep inflation down and employment high. Fed officials have kept their rate higher than usual so far this year in an effort to push inflation down to its goal of a 2% annual rate. Officials said they are waiting to see what happens in the economy because they are concerned Trump's tariffs could push up prices and set off a fresh round of Fed's cautious approach has angered Trump, who wants rate cuts and the economic growth they could promote. A full percentage point cut would be a major move by the Fed and would bring the fed funds rate to a range of 3.25% to 3.5%, its lowest since September 2022. The Fed typically moves rates a quarter-point at a time. The last time the Fed cut rates an entire percentage point was March 2020, when it was evident that the onset of the COVID-19 pandemic would thrash the economy. Before that, the Fed cut an entire point in December 2008, during the Great Recession. The posts were the latest moves in Trump's pressure campaign to influence the Fed's decision-making about monetary policy. The central bank is designed to be insulated from politics, and Powell has said the Fed's decisions will be based only on economic considerations. Trump has repeatedly criticized Powell for not lowering interest rates, in contrast to the Fed's European counterpart. The European Central Bank has cut rates eight times since last June. The Fed cut rates three times over that time period, including a jumbo half-point cut in September, but has kept rates flat. Read the original article on Investopedia 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
24 minutes ago
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Here's How CBDC Fears Are Fueling Bitcoin's Surge
Chatter about state-run digital money is nudging capital toward Bitcoin. China is extensively testing digital currencies, whereas the U.S. is not. Investors betting on perpetual fear driving prices up should temper their expectations. 10 stocks we like better than Bitcoin › The Y2K bug never melted the global grid, yet the panic-buying of flashlights and canned beans in the last months of 1999 was very real. Today, central bank digital currencies (CBDCs) could be playing a similar role in a different fear cycle. CBDCs are digital currencies issued and controlled by a central bank, combining the convenience of digital money with the potential for state oversight of transactions. Talk of state-issued, fully traceable (and controllable) digital money has some investors looking for a lifeboat, and the main beneficiary this time could be Bitcoin (CRYPTO: BTC). If you think a large and fearful capital flight to Bitcoin driven by CBDCs is improbable in the near term, you aren't wrong. Nonetheless, it's undeniable that a centralized and government-controlled digital currency could threaten financial privacy in a way that encourages certain investors to hold their funds in another form. There's already some evidence that at least a few people are buying Bitcoin for this reason. Let's dig in and understand this trend a bit more so that you'll be prepared if it continues to take off. China's recent push to expand its digital yuan pilot projects is both a technical experiment and a catalyst for Chinese investors seeking to safeguard their financial privacy by seeking alternative currencies like Bitcoin. It's also a good example of how capital can behave in a way that's beneficial to Bitcoin when central bankers start to posture regarding implementing CBDCs. On April 23, the People's Bank of China urged state-owned enterprises to prioritize using the yuan for cross-border payments; the digital yuan is likely going to be promoted next. That move sent a clear message: The Chinese government is accelerating control over money and its flows, thereby spurring underground over-the-counter (OTC) purchasing of Bitcoin in cities like Shenzhen and Shanghai as investors scrambled to move capital offshore. The dynamic echoes early 2023, when the start of one of China's digital yuan pilot programs coincided with a 72% surge in Bitcoin's price from January to April, reflecting a classic flight to a perceived safe asset. With around 94% of central banks now exploring CBDCs, according to data from the Bank of International Settlements, the same impulse that's driving Chinese investors to Bitcoin could very easily spread internationally. In the U.S., CBDC conversations are a mix of cautious exploration and staunch political resistance. The Federal Reserve's research into a digital dollar is ongoing. Yet on Capitol Hill, resistance is mounting. A bill reintroduced in late February seeks to bar the Fed from issuing a CBDC. Furthermore, President Donald Trump's executive order on Jan. 28 bans a "digital dollar" outright, but that could actually spur CBDCs in other countries, as they'll be free to establish any norms they prefer for the currency category. So, U.S. investors aren't exactly afraid of a new CBDC threatening their privacy or control over their funds. However, they could still capture the upside from investors in other countries buying Bitcoin to evade their nations' CBDCs. At the moment, capital flight into Bitcoin as a result of CBDCs is a trend that's just starting to pick up. Still, it's important to keep expectations in check here. Bitcoin probably can't ever replace fiat currencies completely, whether they're digitized or not. Bitcoin's supply is famously capped at 21 million coins. That scarcity can support price strength until the cows come home. But there are many technical hurdles to using Bitcoin as an actual currency rather than merely as a store of value. Everyday transactions are far too slow or too costly to be competitive with cash, even on throughput-specialized side chains like the Lightning network. So while the CBDC debate may push Bitcoin higher to the extent it persists and intensifies, don't expect a one-way rocket ride. Investors can count on a tailwind here as long as privacy fears persist. Still, there's no wholly new reason to invest in Bitcoin any more than you're already doing, unless you want to avoid using a CBDC in the future. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy. Here's How CBDC Fears Are Fueling Bitcoin's Surge was originally published by The Motley Fool 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
CBS News
32 minutes ago
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Here's how much an 18-month CD can earn now (and why it's still worth opening)
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. An 18-month CD can still earn savers a substantial return, even in today's slightly lower interest rate climate. imageBROKER/Firn "What's the interest-earning potential?" That's the question savers are always asking themselves before putting their money into a specific account type. And the answer, in recent years, was often "substantial." Thanks to the highest inflation rate in decades and, thus, the highest interest rates in more than 20 years to combat it, savers were able to earn upwards of 5% on vehicles like high-yield savings and certificates of deposit (CD) accounts. The latter type, in particular, had rates upwards of 6% for some specific savers, making them an obvious way to grow and protect your money. But that was in 2023 and 2024. Towards the end of 2024, the Federal Reserve embarked on an interest rate cut campaign that impacted the returns savers were accustomed to with CDs. And that drop in interest-earning potential is likely to continue later this year as additional cuts are issued. That is, of course, unless savers act promptly to take advantage of today's still-elevated interest rate climate. One way to do so is with an 18-month CD, in particular. Before getting started, however, it's helpful to know the precise interest-earning potential of this CD term now, in early June 2025. Below, we'll do the math – and explain why this CD type is still worth opening now. See how much money you could be earning with a high-rate CD here now. Here's how much an 18-month CD can earn now To determine how much money you can earn with a CD you'll need three primary numbers: the interest rate, the term (or length) of the CD account before hitting maturity and the amount deposited. Using those figures, then, here's what savers could expect to earn with an 18-month CD if opened now, tied to a few different deposit amounts and readily available interest rates: $1,000 CD at 4.16%: $63.04 for a total of $1,063.64 afer 18 months $63.04 for a total of $1,063.64 afer 18 months $1,000 CD at 4.05%: $61.36 for a total of $1,061.36 after 18 months $61.36 for a total of $1,061.36 after 18 months $1,000 CD at 4.00%: $60.60 for a total of $1,060.60 after 18 months $5,000 CD at 4.16%: $315.22 for a total of $5,315.22 after 18 months $315.22 for a total of $5,315.22 after 18 months $5,000 CD at 4.05%: $306.81 for a total of $5,306.81 after 18 months $306.81 for a total of $5,306.81 after 18 months $5,000 CD at 4.00%: $302.98 for a total of $5,302.98 after 18 months $10,000 CD at 4.16%: $630.45 for a total of $10,630.45 after 18 months $630.45 for a total of $10,630.45 after 18 months $10,000 CD at 4.05%: $613.61 for a total of $10,613.61 after 18 months $613.61 for a total of $10,613.61 after 18 months $10,000 CD at 4.00%: $605.96 for a total of $10,605.96 after 18 months $20,000 CD at 4.16%: $1,260.89 for a total of $21,260.89 after 18 months $1,260.89 for a total of $21,260.89 after 18 months $20,000 CD at 4.05%: $1,227.22 for a total of $21,227.22 after 18 months $1,227.22 for a total of $21,227.22 after 18 months $20,000 CD at 4.00%: $1,211.92 for a total of $21,211.92 after 18 months Get started with a high-rate CD online today. Why an 18-month CD is still worth opening As illustrated above, savers can earn hundreds or even thousands of dollars with select 18-month CD accounts if opened now. And while that may be enough of a motivation to act promptly, it's not the only reason why an 18-month CD is worth opening now. Here are two others: Extended protection against market uncertainty: No one knows where the interest rate climate is heading this summer, or in the months after, let alone six months to a year from now. But with an 18-month CD, that's less of a concern as savers will secure extended protection against market uncertainty thanks to the fixed interest rate that CD accounts come with. And, by the time the account matures, you'll hopefully have a better idea of where the market stands. The alternatives are not as beneficial: High-yield savings accounts have comparable (but lower) interest rates than the top CD accounts do now. But high-yield savings account interest rates are variable, meaning that they'll decline alongside your interest earnings as the rate climate cools. Money market accounts have the same caveat, while traditional savings accounts have average rates under 0.50%. Compared to the 4%-plus that 18-month CDs come with, then, it becomes clear which is most advantageous for your money now. The bottom line With the potential to grow your money by hundreds (or even thousands) of dollars, the benefit of extended financial protection against market uncertainty and the unfortunate reality of low-rate alternatives, an 18-month CD could be the place to keep some of your money right now. Before getting started, however, be sure to calculate the exact amount you can comfortably part with for the full term to avoid having to pay any early withdrawal penalties or fees to regain access to your funds.
