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Forbes
a few seconds ago
- Forbes
Interest Rate Cut Hopes Are High. Here's Why.
There is heightened optimism the Federal Reserve will cut interest rates next month, with hopes boosted by a better-than-expected inflation report and Wall Street's fear gauge falling to its lowest level this year, as the S&P 500 and Nasdaq jumped to new record highs Wednesday. Wall Street's fear gauge fell to its lowest level this year after inflation appeared to slow down. Copyright 2025 The Associated Press. All rights reserved. There are 99.9% odds the Federal Reserve will opt for a quarter-point reduction to interest rates, which have settled between 4.25% and 4.5% since December, after the agency's policymaking meeting on Sept. 17, according to CME's FedWatch tool. Odds increased yesterday to just over 94% after the Bureau of Labor Statistics reported consumer prices increased 2.7% year-over-year in July, below economists' projections of a 2.8% uptick, after nearing 86% a day earlier. The CBOE Volatility Index (VIX), which tracks implied stock movements over the next month, dropped to below 14.40 early Wednesday, marking the lowest level for Wall Street's barometer for market uncertainty since Jan. 24 (14.58). Jeffrey Roach, LPL Financial's chief economist, wrote Tuesday that despite core inflation—a measurement that excludes food and energy—hitting a six-month high while still above the Fed's 2% goal, he expects the Fed to cut interest rates next month as they focus on the 'weakening labor market,' as job growth has slowed over the last three months. Michael Pearce, deputy chief U.S. economist at Oxford Economists, argued in a note the Federal Reserve will 'hold off rate cuts another few months,' but noted another weak jobs report would likely 'force their hand early.' S&p 500 And Nasdaq Hit Record Highs Amid Interest Rate Optimism Both the S&P 500 and Nasdaq jumped to fresh all-time highs shortly after trading opened on Wednesday. The S&P briefly rose above 6,480, while the Nasdaq ticked over 21,803, boosted by gains among Paramount Skydance (23%), Warner Bros. Discovery (6.2%), Advanced Micro Devices (5.5%) and Tesla (1.9%). The Dow Jones Industrial Average added more than 400 points (0.9%), complemented by gains from UnitedHealth Group (3.7%), Nike (3.2%) and IBM (2.2%). Interest rates influence lending costs and decisions for households and businesses, as lower rates often encourage people seeking mortgages or taking a loan for larger purchases. With lower rates, businesses may take advantage to expand, including by hiring new workers. The Fed tends to opt for interest rate cuts to help stabilize inflation and stimulate economic growth, as lower costs benefit businesses. What Has The Fed Said About Lowering Interest Rates? The Federal Reserve voted to hold interest rates between 4.25% and 4.5% in July, though two governors voted in favor of at least a quarter-point reduction. Fed governors Michelle Bowman and Christopher Waller have signaled support for easing interest rates in recent months, as Waller suggested, 'With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates.' Fed Chair Jerome Powell has leaned toward a cautious monetary policy, arguing the larger impacts of President Donald Trump's tariffs on the economy are not yet known. Powell has said there were several economic reports ahead before the Fed considered a rate easement, with a focus on unemployment rates. What Has Donald Trump Said About Interest Rates? Trump has been critical of the Fed throughout his second term, often referring to Powell as 'too late,' attacking the Fed chair and calling for him to go, while reportedly discussing naming his successor ahead of Powell's term expiring in May 2026. 'The damage he has done by always being too late is incalculable,' Trump wrote Tuesday, adding, 'Fortunately, the economy is sooo good that we've blown through Powell and the complacent board.' Trump has called for interest rates to be cut as low as 1%, and previously expressed confidence Powell would 'do the right thing,' though 'it may be a little too late.' Further Reading Forbes Inflation Rose Slower Than Expected In July—But Trump's Tariffs Still Hiked Prices By Ty Roush
Bloomberg
a few seconds ago
- Bloomberg
Bessent on Fed Rate Cuts, Nvidia Chips in China, Trump's Summit With Putin
US Treasury Secretary Scott Bessent says the Federal Reserve's benchmark interest rate should be at least 1.5 percentage points lower than it is now. He also talks about replacing Fed Chair Jerome Powell, possibly reaching a deal with China to let them use Nvidia chips, President Donald Trump's scheduled summit with Russia's Vladimir Putin and Trump's pick to lead the Bureau of Labor Statistics. He speaks on "Bloomberg Surveillance." (Source: Bloomberg)
Fox News
24 minutes ago
- Fox News
Treasury sanctions 'brutally violent' cartel for timeshare fraud in tourist destination, warns Americans
FIRST ON FOX: The Treasury Department sanctioned a network of individuals linked to a "brutally violent" cartel for hundreds of millions of dollars of timeshare fraud targeting Americans in popular tourist destination Puerto Vallarta, Mexico, Fox News Digital has learned. The Treasury Department is now warning current U.S.-based owners of timeshares and those considering the purchase of a Mexico-based timeshare, to conduct "appropriate due diligence." Officials warn that the scams often target older Americans who can lose their life savings. The Treasury Department's Office of Foreign Assets Control imposed sanctions on four Mexican individuals and 13 Mexican companies linked to timeshare fraud led by the Cartel de Jalisco Nueva Generacion (CJNG). The individuals linked to the fraud are based in or near Puerto Vallarta. "We are coming for terrorist drug cartels like Cartel de Jalisco Nueva Generacion that are flooding our country with fentanyl," Secretary of the Treasury Scott Bessent said in a statement. "These cartels continue to create new ways to generate revenue to fuel their terrorist operations. At President Trump's direction, we will continue our effort to completely eradicate the cartels' ability to generate revenue, including their efforts to prey on elderly Americans through timeshare fraud." The three senior CJNG members most involved in timeshare fraud sanctioned Wednesday are Julio Cesar Montero Pinzon (Montero), Carlos Andres Rivera Varela (Rivera), and Francisco Javier Gudino Haro (Gudino). Additionally, Puerto Vallarta native Michael Ibarra Diaz Jr. (Ibarra) was sanctioned. Treasury says Ibarra is "engaged in timeshare fraud on behalf of CJNG." The companies sanctioned are Akali Realtors, Centro Mediador De La Costa, S.A. de C.V., Corporativo Integral De La Costa, S.A. de C.V., Corporativo Costa Norte, S.A. de C.V., and Sunmex Travel, S. de R.L. De C.V. They "explicitly acknowledge their involvement in the timeshare industry." Another company involved in timeshare-related transactions that was sanctioned is TTR Go, S.A. de C.V. They claim only to be a travel agency. Three additional companies were sanctioned for their alleged real estate activities: Inmobiliaria Integral Del Puerto, S.A. de C.V., KVY Bucerias, S.A. de C.V., and Servicios Inmobiliarios Ibadi, S.A. de C.V. "This diverse corporate network also includes tour operators (Fishing Are Us, S. De R.L. de C.V.; Santamaria Cruise, S. de R.L. de C.V.), an automotive service company (Laminado Profesional Automotriz Elte, S.A. de C.V.), and an accounting firm (Consultorias Profesionales Almida, S.A. de C.V.). Cartel de Jalisco Nueva Generacion is a U.S.-designated Foreign Terrorist Organization. Officials said the cartel is increasingly supplementing its drug trafficking proceeds with alternative revenue streams like timeshare fraud and fuel theft. "Treasury has taken a series of actions targeting the diverse revenue streams benefitting the cartels, including fuel theft, human smuggling, extortion, and fraud," the Treasury Department said. "As Treasury and its partners seek to disrupt the cartels' revenue streams, it is important to remind current owners of timeshares in Mexico: If an unsolicited purchase or rental offer seems too good to be true, it probably is." Treasury added: "Those considering the purchase of a timeshare in Mexico should conduct appropriate due diligence." Officials said Mexico-based cartels have been targeting U.S. owners of timeshares through call centers in Mexico staffed by telemarketers in fluent English. Officials said that beginning in 2012, CJNG took control of timeshare fraud schemes in Puerto Vallarta, Jalisco, Mexico, and the surrounding area. The scams often target older Americans "who can lose their live savings," officials warned, adding that the lifecycle of the scams can "last years, resulting in financial and emotional devastation of the victims while enriching cartels like CJNG." Officials said the cartels typically obtain information about U.S. owners of timeshares in Mexico from "complicit insiders at timeshare resorts." "After obtaining information on timeshare owners, the cartels, through their call centers, contact victims by phone or email and claim to be U.S.-based third-party timeshare brokers, attorneys, or sales representatives in the timeshare, travel, real estate, or financial services industries," the Treasury Department said. Officials explained that the fraud may include timeshare exit scams, or resale scams, timeshare re-rent scams, and timeshare investment scams. "The common theme is that victims are asked to pay advance 'fees' and 'taxes' before receiving money supposedly owed to them," officials warned. "This money never comes, and the victims are continuously told to send these 'fees' and 'taxes' via international wire transfers to accounts held at Mexican banks and brokerage houses." After initial scams, officials warn that "re-victimization scams can occur." In July 2024, Treasury Department's Financial Crimes Enforcement Network and the FBI issued a joint-notice on the timeshare fraud associated with Mexico-based cartels and criminal organizations. In the six month period following that notice, FinCEN received more than 250 Suspicious Activity Reports, and filers reported approximately 1,300 transactions totaling $23.1 million, sent primarily from U.S. based individuals to counterparties in Mexico. Based on FinCEN's analysis, U.S. fraud victims sent an average of $28,912 and a median amount of $10,000 per transaction to the suspected scammers since July 2024. The FBI says approximately 6,000 U.S. victims reported losing nearly $300 million between 2019 and 2023 to timeshare fraud schemes in Mexico. But officials said that figure "likely underestimates total losses, as the FBI believes the vast majority of victims not report the scam due to embarrassment, among other reasons."
