Latest news with #ElizabethWarren
Reuters
18 minutes ago
- Business
- Reuters
Senator Warren warns potential BNY merger with Northern Trust may violate federal banking laws
WASHINGTON, July 22 (Reuters) - Senator Elizabeth Warren has warned BNY (BK.N), opens new tab that its reported interest in a merger with Northern Trust (NTRS.O), opens new tab could violate federal banking laws, saying any potential deal between the two large custody banks raises antitrust concerns. Warren, the top Democrat on the Senate Banking Committee and a longtime big bank critic, told BNY CEO Robin Vince in a letter sent Tuesday that such a deal, which would combine the world's largest custody bank with a major competitor, would pose major financial stability concerns, and asked for a briefing on the status of potential talks, as well as any ongoing discussions with regulators. BNY declined to comment on the letter, and Northern Trust did not respond to a request for comment. "Pursuing a merger that drastically consolidates a key market while supercharging the firm's risk profile and systemic importance is irresponsible and may also violate federal banking laws," she wrote in a letter seen by Reuters. In June, The Wall Street Journal reported that BNY approached Northern Trust to express interest in a merger, although Northern Trust has said it wants to remain independent. BNY declined to comment on the original report. Interest in potential deals between larger banks has been on the rise as regulators appointed by President Donald Trump have discussed refining the merger review process after the Biden administration was cool to transactions among larger firms. But Warren said such a deal would result in an institution with a custodial services market share of over 30%, raising competition concerns and breaching antitrust law. "Further entrenching its already-dominant market position would enable BNY to hike fees and increase prices, undermine its incentives to innovate, erode its customer service, and reduce the already-limited choices available for institutional clients looking for custodial services," she wrote.
Forbes
a day ago
- Business
- Forbes
Stablecoins Won't Inflate The Money Supply. Here's Why.
President Donald Trump signs the GENIUS Act, a bill that regulates stablecoins. With the recent passage of the GENIUS Act, the United States has taken its first major legislative step toward regulating dollar-backed stablecoins. The bill, signed into law by President Trump on July 18, lays out a framework that requires stablecoins to be fully backed by low-risk, liquid assets such as short-term U.S. Treasurys or cash equivalents. Issuers must meet licensing standards, comply with regulatory oversight, and undergo regular audits. The intent of the law is to integrate stablecoins into the existing financial ecosystem without destabilizing it. As stablecoins have moved into the regulatory mainstream, a debate has ignited among economists. Will the adoption of these digital tokens expand the money supply and unleash inflation? Will stablecoins diminish the Federal Reserve's control over monetary policy? Senator Elizabeth Warren even warns crypto can 'blow up our entire economy.' On these counts, fears are overstated. A closer look reveals that stablecoins are unlikely to fuel inflation, nor do they significantly alter the role of central banks, though the Federal Reserve's role has been evolving in recent years for other reasons. To understand why stablecoins will not expand the money supply in any meaningful sense, one must revisit a critical development in U.S. monetary policy that took place during the 2008 financial crisis. At that time, the Federal Reserve received authority to pay interest on reserves held by commercial banks. This change made bank reserves held at the Fed essentially interchangeable with short-term government debt. Both now yield comparable rates of interest and both are considered nearly risk-free. This change has had sweeping consequences. It neutered much of the traditional mechanism of monetary policy, whereby the Fed manipulates the supply of base money to steer short-term interest rates. Now, the modern Fed still targets interest rates, but it also allows reserve accounts to pile up by restricting lending through the payment of interest to banks. The Fed now swaps interest-bearing central bank liabilities (reserves) for other interest-bearing securities (such as T-bills), having little to no impact on broader monetary aggregates. Meanwhile, the Fed tends to be more of a follower of market interest rates than a director of them. In essence, the Fed has become a passive balance sheet manager rather than an active creator of credit and liquidity. The Structure of Modern Money While some may lament the decline in central bank control, it has corresponded with an unprecedented era of macroeconomic stability. Since the introduction of interest on reserves, the U.S. has not experienced a demand-induced recession. The 2020 recession was due to a pandemic, not insufficient demand due to monetary factors. This is a near-unheard-of achievement in recent economic history, and it explains why the interest-on-reserves policy should be viewed as one of the greatest policy successes in recent memory. With this context in mind, concerns that stablecoins will destabilize the money supply look misplaced. Under the GENIUS Act, stablecoin issuers are required to back their liabilities 100 percent with safe, liquid assets. Since these assets consist of U.S. Treasurys and central bank reserves, which are already functionally equivalent in today's environment, the issuance of stablecoins merely transforms one form of existing money-like instrument for another. In other words, stablecoins repackage already-existing base money and close substitutes into tokenized forms of money that facilitate faster and cheaper payments. They do not constitute a net expansion of government financial liabilities and private credit. Some might point out that unlike reserves or T-bills, U.S. stablecoin accounts won't pay interest (at least for now). This is an important difference, but not one that fundamentally alters the monetary picture. True, the assets and liabilities of stablecoin issuers are not perfectly interchangeable. The non-interest-bearing nature of most stablecoins makes them less attractive as a store of value than their underlying reserves. But for some transactional purposes, like cross-border payments, stablecoins may still be preferred at times for their technical attributes. From a macroeconomic standpoint, what matters is that their issuance neither injects new money into the economy nor changes the overall purchasing power in circulation. Modern money creation is primarily driven by the credit decisions of commercial banks responding to market demand. This is a legacy of fractional reserve banking. However, stablecoin issuers under the new regulatory regime will not operate a fractional reserve model. Their 100 percent reserve backing ensures that they do not multiply credit in the traditional banking sense. As such, they do not contribute to the 'pyramid' of credit that some monetary theorists warn about. The Real Source of Risk The GENIUS Act actually tightens the relationship between money and its underlying assets, making the monetary system arguably more conservative. This does not mean there are no risks associated with stablecoins. If confidence in the U.S. government's creditworthiness were to erode, there could be runs on stablecoins. For example, if Treasurys are no longer viewed as risk-free, stablecoin issuers might face liquidity crises. Investors who try to redeem Treasurys for U.S. dollars might see the value of Treasurys decline. This would make it harder for stablecoin issuers to meet redemptions, as users demand cash for their tokens. At some point, the Federal Reserve might have to step in to act as lender of last resort, providing liquidity to ease the credit crunch. The real risk in this scenario relates to the creditworthiness of the U.S. government, not from stablecoins themselves. As long as U.S. debt is viewed as reliable, stablecoins should remain safe and continue to expand without fueling inflation. They may increase economic activity by facilitating new kinds of transactions, but they are unlikely to cause broad-based price increases or liquidity crises. Indeed, the larger risk to monetary stability today is not private stablecoin issuers but Congress. As the Fed's policy toolkit has been constrained, fiscal authorities have become the de facto 'conductors' of aggregate demand. The inflationary surge and subsequent reversal during the Biden administration demonstrated the extent to which spending bills and stimulus programs can now drive price levels. Thus, the stablecoin debate must be seen in proper perspective. It is not about whether the private financial system will usurp the Federal Reserve. That transition, to an extent, already happened in 2008. Instead, the focus of discussion should be on integrating this new technology into an evolving monetary system in a manner that is transparent and secure. The GENIUS Act succeeds on this front. It creates a clear regulatory path for stablecoin issuers and embraces innovation without sacrificing financial stability. The law could certainly be improved upon. Perhaps stablecoin issuers should eventually be allowed to pay interest, or, more controversially, to hold fewer safe reserves and engage in more traditional lending. These issues are worthy of debate. But for now, the policy direction is sound. Stablecoins are not a threat to the money supply. They are a reflection of how that supply has changed in recent years. So long as investors understand this, there is little reason to fear stablecoins' ascent.
Fox News
3 days ago
- Entertainment
- Fox News
CNN analyst blasts Dem lawmakers for demanding answers on Colbert's cancellation
CNN senior legal analyst Elie Honig ripped Democratic lawmakers this week for trying to get answers on CBS's Thursday announcement it will be canceling "The Late Show with Stephen Colbert" in 2026. "The move, as you can hear, drew surprise and anger from his audience and from Democratic lawmakers too, who are now demanding answers," CNN's Abby Phillip said. Phillip then quoted a statement from Sen. Elizabeth Warren, D-Mass., on the announcement from the senator's X feed that said "CBS canceled Colbert's show just THREE DAYS after Colbert called out CBS parent company Paramount for its $16M settlement with Trump – a deal that looks like bribery. America deserves to know if his show was canceled for political reasons." Phillip brought in Honig, who said that Democrats should move on. "Two initial reactions to this," Honig said. "Number one, what on earth is Congress doing, wasting their time on this? CBS is a private industry. If they want to give AOC the show, God bless them." "They're private," he continued. "That's First Amendment, Congress. If Democrats, if Elizabeth Warren, they go down this road, what an utter waste." CNN contributor Scott Jennings then challenged Honig, asking him why he thinks Democratic lawmakers are upset that the show is being canceled. "You don't know why they're mad about it," Jennings asked Honig. "Well, who was even on the show tonight? Adam Schiff. These shows, Colbert and the rest of them have become nothing but anti-Trump fever swap porn along with Dem guests every single night." Phillip acknowledged Jennings' stance, but then said she thinks Warren is concerned that the cancellation is due to ongoing corruption. On July 1, Paramount Global and CBS agreed to pay Trump a sum that could reach at least $30 million to settle the president's election interference lawsuit against the network.
Yahoo
3 days ago
- Business
- Yahoo
Exclusive: Trade partners have realized America is ‘simply not reliable' after Trump's tariff regime, says Elizabeth Warren—believing impact will be felt for generations to come
Economists are waiting to see how damaging Trump's tariff agenda may be, with inflation impacts so far limited—but Senator Elizabeth Warren warns the real cost is long-term, as global partners begin to see the U.S. as an unreliable trade ally. While the White House touts tariffs as a win for American voters, Sen. Warren told Fortune they've driven up costs, delayed manufacturing investment, and forced the Fed to keep interest rates higher than it otherwise would. Economists are split on how damaging President Trump's tariff agenda may turn out to be. Some are worried it will boost inflation, while others argue a universal 10% hike to imports introduced months ago have barely blipped in inflation data. Indeed, markets have now generally begun to look through the tariff back and forth, and are less concerned by the ultimate fallout than earlier in the Trump 2.0 administration. Goldman Sachs, for example, wrote this week that even a 15% universal tariff rate would result in only a 1.3pp increase to the effective tariff rate overall. Jerome Powell and the Federal Open Market Committee have been criticized by Trump for not cutting the base rate because of their concerns about tariffs. Critics argue that June inflation data, for example, only showed a 0.3% increase compared to the month prior, bringing the 12-month unadjusted rate to 2.7%. But on top of that, concern from some spectators is the longterm damage the president's see-sawing agenda is doing to the perception of the world's largest economy. Trade partners reacted to Trump's 'Liberation Day' tariffs with promises to negotiate, but also disbelief. Since April, these partners have also been subject to changing deadlines and shifting sands on the rate of the economic sanctions they may face if they don't pen a deal with the White House. The lasting damage of the Trump presidency on these relationships is a concern for Democrat Senator Elizabeth Warren (Massachussetts). She told Fortune in an exclusive interview: 'Donald Trump has done enormous damage to America's partnerships around the world.' 'The impact of six months of Donald Trump will be felt for two generations, as more nations blink hard at what's happening in the U.S. and conclude that we are simply not a reliable trading partner. That hurts us now and it will hurt our children and our grandchildren.' The White House argued tariff action is for the benefit of voters. Spokesman Kush Desai told Fortune: 'No one has suffered more from America's lopsided 'free' trade arrangements and foreign countries' unfair trade practices than the working class Americans who Elizabeth Warren has always pretended to be a champion for.' 'President Trump's tariffs have already delivered trillions in historic investment commitments that will create tens of thousands of quality jobs, along with new trade deals with the U.K., Vietnam, Indonesia, and more countries to come that level the playing field and create billions in new export opportunities.' Desai finished that Warren 'talks' but Trump 'delivers.' The data question Despite the continued pressure from Trump and his administration on the Fed to lower the base rate, chairman Jerome Powell has confirmed that if it weren't for the Oval Office's policies themselves, the base rate would already be lower. This is one of three costs Sen. Warren says is already trickling through the economy because of White House policy, explaining: 'Families across America have been paying more on credit cards and car loans and other forms of consumer debt because Donald Trump has played a game of on, off, on, off, on, off, on tariffs.' The other costs, she continued, is that investment particularly in sectors like manufacturing has declined. She said: 'No one wants to build a new factory, buy a lot of expensive equipment or train a workforce if they don't have a sense of what their imports will cost and what their exports may get tagged with in the tariff world.' Indeed, data from the St Louis Fed shows private fixed investment in the manufacturing sector was down 5.2% in Q1 2025 compared with the quarter prior. That said, gross private investment in Q1—spending by individuals and businesses on production processes et al—did tick up in the first quarter, with fixed investments up 7.6pp according to the Bureau of Economic Analysis. The Trump administration has also scored some headline wins on business investment, with Apple announcing $500 billion in domestic investment and the Stargate AI project which will reportedly to generate a further $500 billion investment in infrastructure over the next four years. Sen. Warren also highlighted prices are starting to inch up in commodities which are heavily imported. The most recent producer price index (PPI), for example, showed upticks in computer electronics and furniture at a wholesale level (up YoY 2.6% and 3.4% respectively)—data which the Federal Open Market Committee will be well aware of when making their decisions about the base rate. 'Under the headline number in areas that are more tariff-vulnerable … inflation has gone up faster and in areas where the United States … can't produce a good substitute at home,' Sen. Warren added, adding this may be the reason areas like groceries shot up 3% in the most recent CPI data. This story was originally featured on Sign in to access your portfolio
Yahoo
3 days ago
- Business
- Yahoo
Exclusive: Trade partners have realized America is ‘simply not reliable' after Trump's tariff regime, says Elizabeth Warren—believing impact will be felt for generations to come
Economists are waiting to see how damaging Trump's tariff agenda may be, with inflation impacts so far limited—but Senator Elizabeth Warren warns the real cost is long-term, as global partners begin to see the U.S. as an unreliable trade ally. While the White House touts tariffs as a win for American voters, Sen. Warren told Fortune they've driven up costs, delayed manufacturing investment, and forced the Fed to keep interest rates higher than it otherwise would. Economists are split on how damaging President Trump's tariff agenda may turn out to be. Some are worried it will boost inflation, while others argue a universal 10% hike to imports introduced months ago have barely blipped in inflation data. Indeed, markets have now generally begun to look through the tariff back and forth, and are less concerned by the ultimate fallout than earlier in the Trump 2.0 administration. Goldman Sachs, for example, wrote this week that even a 15% universal tariff rate would result in only a 1.3pp increase to the effective tariff rate overall. Jerome Powell and the Federal Open Market Committee have been criticized by Trump for not cutting the base rate because of their concerns about tariffs. Critics argue that June inflation data, for example, only showed a 0.3% increase compared to the month prior, bringing the 12-month unadjusted rate to 2.7%. But on top of that, concern from some spectators is the longterm damage the president's see-sawing agenda is doing to the perception of the world's largest economy. Trade partners reacted to Trump's 'Liberation Day' tariffs with promises to negotiate, but also disbelief. Since April, these partners have also been subject to changing deadlines and shifting sands on the rate of the economic sanctions they may face if they don't pen a deal with the White House. The lasting damage of the Trump presidency on these relationships is a concern for Democrat Senator Elizabeth Warren (Massachussetts). She told Fortune in an exclusive interview: 'Donald Trump has done enormous damage to America's partnerships around the world.' 'The impact of six months of Donald Trump will be felt for two generations, as more nations blink hard at what's happening in the U.S. and conclude that we are simply not a reliable trading partner. That hurts us now and it will hurt our children and our grandchildren.' The White House argued tariff action is for the benefit of voters. Spokesman Kush Desai told Fortune: 'No one has suffered more from America's lopsided 'free' trade arrangements and foreign countries' unfair trade practices than the working class Americans who Elizabeth Warren has always pretended to be a champion for.' 'President Trump's tariffs have already delivered trillions in historic investment commitments that will create tens of thousands of quality jobs, along with new trade deals with the U.K., Vietnam, Indonesia, and more countries to come that level the playing field and create billions in new export opportunities.' Desai finished that Warren 'talks' but Trump 'delivers.' The data question Despite the continued pressure from Trump and his administration on the Fed to lower the base rate, chairman Jerome Powell has confirmed that if it weren't for the Oval Office's policies themselves, the base rate would already be lower. This is one of three costs Sen. Warren says is already trickling through the economy because of White House policy, explaining: 'Families across America have been paying more on credit cards and car loans and other forms of consumer debt because Donald Trump has played a game of on, off, on, off, on, off, on tariffs.' The other costs, she continued, is that investment particularly in sectors like manufacturing has declined. She said: 'No one wants to build a new factory, buy a lot of expensive equipment or train a workforce if they don't have a sense of what their imports will cost and what their exports may get tagged with in the tariff world.' Indeed, data from the St Louis Fed shows private fixed investment in the manufacturing sector was down 5.2% in Q1 2025 compared with the quarter prior. That said, gross private investment in Q1—spending by individuals and businesses on production processes et al—did tick up in the first quarter, with fixed investments up 7.6pp according to the Bureau of Economic Analysis. The Trump administration has also scored some headline wins on business investment, with Apple announcing $500 billion in domestic investment and the Stargate AI project which will reportedly to generate a further $500 billion investment in infrastructure over the next four years. Sen. Warren also highlighted prices are starting to inch up in commodities which are heavily imported. The most recent producer price index (PPI), for example, showed upticks in computer electronics and furniture at a wholesale level (up YoY 2.6% and 3.4% respectively)—data which the Federal Open Market Committee will be well aware of when making their decisions about the base rate. 'Under the headline number in areas that are more tariff-vulnerable … inflation has gone up faster and in areas where the United States … can't produce a good substitute at home,' Sen. Warren added, adding this may be the reason areas like groceries shot up 3% in the most recent CPI data. This story was originally featured on 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
