Three weeks into November, Tesla is already on its fourth recall of the month. On Nov. 19, Elon Musk’s electric car company recalled 321,000 vehicles in the US over tail light issues. The day before it had recalled 30,000 Model X cars because of an airbag deployment problem. Earlier this month,…
#tesla #musk #elonmusk #radioflyer #recalled #chinamadetesla #issues #elon #power #service
The community takes things into its hands as Grayscale refuses to provide proof of Reserve. @ErgoBTC, AKA Ergo, a blockchain researcher with OXT Research, disclosed findings from a community-led effort to trace Grayscale’s Bitcoin Trust (GBTC) reserves in a Twitter thread yesterday. Grayscale GBTC…
#coinbasecustody #grayscale #coinbase #gbtc #grayscalegbtc #custody #gbtctrust #akaergo #grayscaletrust #grayscalerefuses
The Biden administration's latest economic messaging seems designed to talk itself — and the public — into a soft landing, not a crash or dramatic rebound. The big picture: The White House has found a catchy, consistent message that lowers expectations — whether or not the U.S. technically slips…
#dramaticrebound #softlanding #jaredbernstein #recession #stable #bernstein #steady #bernsteinreferred #rebound #messaging
Bitcoin mining difficulty rose 0.51% to an all-time-high in Monday’s biweekly adjustment, according to BTC.com, despite the price of Bitcoin falling more than 22% in the past two weeks. See related article: Mining rig maker Canaan’s stocks fall as Q3 profits shrink Fast facts – The difficulty of…
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The cryptocurrency industry saw the spectacular collapse of one of its giants earlier this month, which ultimately resulted in FTX filing for Chapter 11 bankruptcy. Shortly after, though, there were suspicious movements from one of its accounts, many related it to a hack or even an inside job. -…
#spectacularcollapse #giantsearlier #securitiescommission #chapter #commission #ftx #bahamas #ftxfiled #cryptocurrency #spectacular
The FTX hacker started selling massive amounts of ETH early yesterday, the selling has added additional sell pressure into the …
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The crypto ecosystem is still bearing the brunt of the collapse of the well-established exchange FTX. From the beginning, several entities have been showing interest to aid Sam Bankman-Fried’s bankrupt company. Binance contemplated tossing a life-saving jacket initially but backed off eventually.…
#ftx #ripple #sbf #aidsam #justinsun #sambankmanfried #garlinghouse #bankruptcy #bahamas #binance
South Korean financial authorities are looking into self-issued cryptocurrencies that may exist within local crypto exchanges following FTX.com’s FTT-led liquidity crisis. See related article: FTX contagion in S.Korea: GOPAX halts Genesis-backed DeFi Fast facts – South Korea’s Financial…
#southkorea #ftxcomsfttled #south #ftx #korea #intelligenceunit #fttledliquidity #ftt #selfissuedcryptocurrencies #local
Theranos founder Elizabeth Holmes was sentenced Friday to more than 11 years in prison for fraud after deceiving investors about the purported efficacy of her company’s blood-testing technology. She was ordered to surrender on April 27.
Holmes was convicted in January in the U.S. District Court for the Northern District of California. She cried while speaking to the court ahead of her sentencing on Friday.
“I loved Theranos. It was my life’s work,” Holmes said. “My team meant the world to me. I am devastated by my failings. I’m so so sorry. I gave everything I had to build my company.”
Her defense team argued she should face a maximum sentence of 18 months, according to court filings. Instead, she was given 135 months, which amounts to 11 years and three months, behind bars.
The Wall Street Journal first broke the story of how Theranos’ blood-testing technology was struggling to meet expectations in 2015. Whistleblowers and other witnesses came forth to provide detailed accounts of how Holmes and former operating chief Ramesh “Sunny” Balwani deceived patients, partners, investors and employees about the company’s progress and the capabilities of its technology.
Once valued at $9 billion by private investors, Theranos shut down in 2018.
“Thank you for having me. Thank you for the courtesy and respect you have shown me,” she said Friday. “I have felt deep pain for what people went through because I failed them. To investors, patients, I am sorry.”
Prosecutors sought a 15 year sentence for the pregnant 38-year-old former billionaire and Silicon Valley celebrity. In July, Balwani, who was romantically involved with Holmes years earlier, was found guilty of 12 criminal fraud charges. His sentencing is set for next month.
U.S. District Court Judge Edward Davila, who presided over Holmes’ trial, handed down the sentence.
The erstwhile billionaire had attempted to move for a new trial after a former employee appeared at her doorstep in August to speak with her. Holmes’ partner, Billy Evans, told the court that the former employee made remorseful remarks at their shared residence.
But that employee, Adam Rosendorff, told the court that his remarks were due to distress at the thought of a child spending time without their mother. The Theranos founder gave birth in July to her first child, and is expecting another.
Holmes’ sentencing comes as another young tech former billionaire icon, Sam Bankman-Fried, faces a daunting future, following the sudden collapse of his cryptocurrency exchange FTX last week. Bankman-Fried hasn’t been charged with a crime, but he’s in legal jeopardy after revelations that his company was unable to give depositors their money back because some of it was used to fund risky, losing bets.
President Joe Biden of the United States arrives at the formal welcome ceremony to mark the beginning of the G20 Summit on November 15, 2022 in Nusa Dua, Indonesia.
Leon Neal | Pool | via Reuters
U.S. President Joe Biden said it is unlikely that the missile that hit Poland and killed two people was fired from Russia, but the United States and allies unanimously agreed to support the country’s investigation.
“I’m going to make sure we figure out exactly what happened,” Biden said.
Early Wednesday morning, Polish officials said a “Russian-made missile” landed on its soil, killing two people. It would mark the first time since Russia’s war in Ukraine began in February of this year that a Russian projectile hit NATO territory.
“There is preliminary information that contests that,” Biden said when asked if the missile was fired from Russia. “I don’t want to say until we completely investigate. It is unlikely in the lines of the trajectory that it was fired from Russia, but we’ll see.”
Biden didn’t address whether the missile could have been fired by Russia from Ukraine or elsewhere.
Biden was speaking in Bali, Indonesia where he is attending the Group of 20 summit, a meeting of the world’s largest economies.
Biden has repeatedly said any attack on NATO soil will be considered an attack on all of the alliance members. He spoke with Polish President Andrzej Duda after the explosion offering his full support, according to the White House. He spokes with NATO Secretary General Jens Stoltenberg in a separate call, the White House said.
Before speaking to reporters, Biden convened a meeting of “like-minded leaders” on the situation. Participants included G-7 members and allies: European Commission President Ursula von der Leyen, Italian Prime Minister Giorgia Meloni, German Chancellor Olaf Scholz, French President Emmanuel Macron, Canadian Prime Minister Justin Trudeau, UK Prime Minister Rishi Sunak, Spainish Prime Minister Pedro Sanchez, Dutch Prime Minister Mark Rutte, Japanese Prime Minister Kishida Fumio and European Council President Charles Michel.
“We’re going to collectively determine our next step as we investigate and proceed,” Biden said. “There was total unanimity among folks at the table.”
Biden said the group also discussed Russia’s recent missile attacks in Ukraine, saying the country’s aggression has been “unconscionable.”
“The moment when the world came together at the G-20 to urge de-escalation, Russia continues to escalate in Ukraine,” Biden said. “While we were meeting there were scores and scores of missile attacks in western Ukraine. We support Ukraine fully in this moment; we have since the start of the conflict.”
Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy protection in the U.S., according to a company statement posted on Twitter. Bankman-Fried has also stepped down as CEO and has been succeeded by John J. Ray III, though the outgoing chief will stay on to assist with the transition.
Approximately 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and FTX.us, the company’s U.S. subsidiary.
In the 23-page bankruptcy filing obtained by CNBC, FTX indicates it has more than 100,000 creditors, assets in the range of $10 billion to $50 billion, as well as liabilities in the range of $10 billion to $50 billion. Bankman-Fried also indicated he wishes to appoint Stephen Neal as the firm’s new chairman of the board.
CNBC reached out to Adam Landis, founding partner of Landis Rath & Cobb LLP, who filed the Chapter 11 proceedings on behalf of FTX. CNBC did not immediately hear back to our request for comment.
“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders,” said the new FTX chief, Ray.
“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency,” continued Ray.
He added that stakeholders should understand that events have been fast moving, that the new team is engaged only recently and that they should review the materials filed on the docket of the proceedings over the coming days for more information.
It caps off a tumultuous week for one of the biggest names in the sector.
In the space of days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals and rival exchange Binance ripped up its nonbinding agreement to buy the company. FTX founder Bankman-Fried admitted on Thursday that he “f—ed up.”
Anthony Scaramucci, founder of SkyBridge Capital and short-time Trump communications director, flew to the Bahamas this week to help Bankman-Fried as an investor and friend. When Scaramucci got there, he says, it appeared beyond the point of a simple liquidity rescue. He said he didn’t see evidence of this mishandling when he and other investors first screened FTX as a potential business partner.
“Duped I guess is the right word, but I am very disappointed because I do like Sam,” Scaramucci said Friday morning on CNBC’s “Squawk Box.” “I don’t know what happened because I was not an insider at FTX.”
An FTX spokesperson did not immediately respond to CNBC’s request for comment on this story, including on Scaramucci’s remarks.
In a short period of time, FTX expanded into non-crypto elements of life, such as pop culture. For example, in the past Super Bowl, it aired a commercial featuring comedian Larry David, in which David turned down an opportunity to invest in crypto. “Ehh, I don’t think so. And I’m never wrong about this stuff. Never.”
GameStop is winding down its partnership with FTX, according to people familiar with the matter. Under the agreement, announced in September, GameStop sold FTX gift cards in select stores and while FTX promoted the retailer on its exchange.
The winding down of business agreements, like the one with GameStop, will likely continue following the FTX bankruptcy filing.
The Chapter 11 proceedings exclude the following subsidiaries: LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd., and FTX Express Pay Ltd.
— CNBC’s Jack Stebbins and Lillian Rizzo contributed to this report.
Binance is backing out of its plans to acquire FTX, the company said Wednesday, leaving Sam Bankman-Fried’s crypto empire on the verge of collapse.
The reversal comes one day after Binance CEO Changpeng Zhao announced that the world’s largest cryptocurrency firm had reached a non-binding deal to buy FTX’s non-U.S. businesses for an undisclosed amount, rescuing the company from a liquidity crisis. Earlier this year, FTX was valued at $32 billion by private investors.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity,” Binance said in a tweet on Wednesday. “But the issues are beyond our control or ability to help.”
On Monday night, facing a liquidity crunch, Bankman-Fried was scrambling to raise money from venture capitalists and other investors before he went to Binance, according to sources with knowledge of the matter. Zhao initially agreed to step in, but his company quickly changed course, citing reports of “mishandled customer funds and alleged U.S. agency investigations.”
It’s unclear who is next in line to buy the beleaguered crypto exchange. Bankman-Fried told investors that the company is facing a shortfall of up to $8 billion from withdrawal requests and needs emergency funding, according to a person familiar with the matter.
The disintegration of the Binance-FTX deal is the latest chapter in a shocking collapse that’s rocked the crypto world this week. Bankman-Fried tried to reassure investors just on Monday that the company’s assets were fine. But after Binance’s Zhao said publicly that his company was selling its holdings in FTX’s native token FTT, the selloff was on, and FTX could do nothing to stop it.
One of Silicon Valley’s most prominent VC firms, Sequoia Capital, sank $210 million into the company, according to reporter Eric Newcomer. FTX was telling investors recently that its operating income in 2022 was projected to drop to $144 million this year, down from $338 million in 2021, while revenue was projected to rise to $1.1 billion from $1 billion last year, Newcomer reports.
Bankman-Fried said on Tuesday that customers had demanded withdrawals to the tune of $6 billion. He also deleted tweets from the prior day indicating that FTX had enough assets to cover clients’ holdings.
Zhao told Binance employees in a memo earlier on Wednesday that he “did not master plan” the collapse of FTX. He said FTX going down is “not good for anyone in the industry” and employees should not “view it as a win for us.”
He also told them not to trade FTT tokens while this ordeal unfolds.
“If you have a bag, you have a bag,” he wrote. “DO NOT buy or sell.”
FTT had already lost 80% of its value between Monday and Tuesday, falling to $5 and wiping out more than $2 billion in a day. It fell by more than half on Wednesday to around $2.30, shrinking the total value of circulating tokens to roughly $308 million.
Cryptocurrencies have plummeted amid the deal turmoil, with bitcoin falling 15% on Wednesday after a 13% drop on Tuesday. It’s trading below $16,000 for the first time since November 2020. Ether, meanwhile, has plunged more than 30% over the past two days and is close to falling below $1,000.
Here’s the company’s full statement:
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.
In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.
Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.
As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”
Correction: FTX was telling investors its operating income was projected to drop to $144 million this year, down from $338 million in 2021.
Job growth was stronger than expected in October despite Federal Reserve interest rate increases aimed at slowing what is still a strong labor market.
Nonfarm payrolls grew by 261,000 for the month while the unemployment rate moved higher to 3.7%, the Labor Department reported Friday. Those payroll numbers were better than the Dow Jones estimate for 205,000 more jobs, but worse than the 3.5% estimate for the unemployment rate.
Although the number was better than expected, it still marked the slowest pace of job gains since December 2020.
Average hourly earnings grew 4.7% from a year ago and 0.4% for the month, indicating that wage growth is still likely to serve as a price pressure as worker pay is still well short of the rate of inflation. The yearly growth met expectations while the monthly gain was slightly ahead of the 0.3% estimate.
Health care led job gains, adding 53,000 positions, while professional and technical services contributed 43,000, and manufacturing grew by 32,000.
Leisure and hospitality also posted solid growth, up 35,000 jobs, though the pace of increases has slowed considerably from the gains posted in 2021. The group, which includes hotel, restaurant and bar jobs along with related sectors, is averaging gains of 78,000 a month this year, compared with 196,000 last year.
Heading into the holiday shopping season, retail posted only a modest gain of 7,200 jobs. Wholesale trade added 15,000, while transportation and warehousing was up 8,000.
The unemployment rate rose 0.2 percentage point even though the labor force participation rate declined by one-tenth of a point to 62.2%. An alternative measure of unemployment, which includes discouraged workers and those holding part-time jobs for economic reasons, also edged higher to 6.8%.
Stock market futures rose following the nonfarm payrolls release, while Treasury yields also were higher.
September’s jobs number was revised higher, to 315,000, an increase of 52,000 from the original estimate. August’s number moved lower by 23,000 to 292,000.
The new figures come as the Fed is on a campaign to bring down inflation running at an annual rate of 8.2%, according to one government gauge. Earlier this week, the central bank approved its fourth consecutive 0.75 percentage point interest rate increase, taking benchmark borrowing rates to a range of 3.75%-4%.
Those hikes are aimed in part at cooling a labor market where there are still nearly two jobs for every available unemployed worker. Even with the reduced pace, job growth has been well ahead of its pre-pandemic level, in which monthly payroll growth averaged 164,000 in 2019.
But Tom Porcelli, chief U.S. economist at RBC Capital Markets, said the broader picture is of a slowly deteriorating labor market.
“This thing doesn’t fall of a cliff. It’s a grind into a slower backdrop,” he said. “It works this way every time. So the fact that people want to hang their hat on this lagging indicator to determine where we are going is sort of laughable.”
Indeed, there have been signs of cracks lately.
Amazon on Thursday said it is pausing hiring for roles in its corporate workforce, an announcement that came after the online retail behemoth said it was halting new hires for its corporate retail jobs.
Also, Apple said it will be freezing new hires except for research and development. Ride-hailing company Lyft reported it will be slicing 13% of its workforce, while online payments company Stripe said it is cutting 14% of its workers.
Fed Chairman Jerome Powell on Wednesday characterized the labor market as “overheated” and said the current pace of wage gains is “well above” what would be consistent with the central bank’s 2% inflation target.
“Demand is still strong,” said Amy Glaser, senior vice president of business operations at Adecco, a staffing and recruiting firm. “Everyone is anticipating at some point that we’ll start to see a shift in demand. But so far we’re continuing to see the labor market defying the law of supply and demand.”
Glaser said demand is especially strong in warehousing, retail and hospitality, the sector hardest hit by the Covid pandemic.
This is breaking news. Please check back here for updates.
The Federal Reserve on Wednesday approved a fourth consecutive three-quarter point interest rate increase and signaled a potential change in how it will approach monetary policy to bring down inflation.
In a well-telegraphed move that markets had been expecting for weeks, the central bank raised its short-term borrowing rate by 0.75 percentage point to a target range of 3.75%-4%, the highest level since January 2008.
The move continued the most aggressive pace of monetary policy tightening since the early 1980s, the last time inflation ran this high.
Along with anticipating the rate hike, markets also had been looking for language indicating that this could be the last 0.75-point, or 75 basis point, move.
The new statement hinted at that policy change, saying when determining future hikes, the Fed “will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Economists are hoping this is the much talked about “step-down” in policy that could see a rate increase of half a point at the December meeting and then a few smaller hikes in 2023.
This week’s statement also expanded on previous language simply declaring that “ongoing increases in the target range will be appropriate.”
The new language read, “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Stocks initially rose following the announcement, but turned negative during Chairman Jerome Powell‘s news conference as the market tried to gauge whether the Fed thinks it can implement a less restrictive policy that would include a slower pace of rate hikes to achieve its inflation goals.
On balance, Powell dismissed the idea that the Fed may be pausing soon though he said he expects a discussion at the next meeting or two about slowing the pace of tightening.
He also reiterated that it may take resolve and patience to get inflation down.
“We still have some ways to go and incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected,” he said.
Still, Powell repeated the idea that there may come a time to slow the pace of rate increases. He has said this at recent news conferences
“So that time is coming, and it may come as soon as the next meeting or the one after that. No decision has been made,” he said.
The chairman also expressed some pessimism about the future. He noted that he now expects the “terminal rate,” or the point when the Fed stops raising rates, to be higher than it was at the September meeting. With the higher rates also comes the prospect that the Fed will not be able to achieve the “soft landing” that Powell has spoken of in the past.
“Has it narrowed? Yes,” he said in response to a question about whether the path has narrowed to a place where the economy doesn’t enter a pronounced contraction. “Is it still possible? Yes.”
However, he said the need for still-higher rates makes the job more difficult.
“Policy needs to be more restrictive, and that narrows the path to a soft landing,” Powell said.
Along with the tweak in the statement, the Federal Open Market Committee again categorized growth in spending and production as “modest” and noted that “job gains have been robust in recent months” while inflation is “elevated.” The statement also reiterated language that the committee is “highly attentive to inflation risks.”
The rate increase comes as recent inflation readings show prices remain near 40-year highs. A historically tight jobs market in which there are nearly two openings for every unemployed worker is pushing up wages, a trend the Fed is seeking to head off as it tightens money supply.
Concerns are rising that the Fed, in its efforts to bring down the cost of living, also will pull the economy into recession. Powell has said he still sees a path to a “soft landing” in which there is not a severe contraction, but the U.S. economy this year has shown virtually no growth even as the full impact from the rate hikes has yet to kick in.
At the same time, the Fed’s preferred inflation measure showed the cost of living rose 6.2% in September from a year ago – 5.1% even excluding food and energy costs. GDP declined in both the first and second quarters, meeting a common definition of recession, though it rebounded to 2.6% in the third quarter largely because of an unusual rise in exports. At the same time, housing demand has plunged as 30-year mortgage rates have soared past 7% in recent days.
On Wall Street, markets have been rallying in anticipation that the Fed soon might start to ease back as worries grow over the longer-term impact of higher rates.
The Dow Jones Industrial Average has gained more than 13% over the past month, in part because of an earnings season that wasn’t as bad as feared but also due to growing hopes for a recalibration of Fed policy. Treasury yields also have come off their highest levels since the early days of the financial crisis, though they remain elevated. The benchmark 10-year note most recently was around 4.09%.
There is little if any expectation that the rate hikes will halt anytime soon, so the anticipation is just for a slower pace. Futures traders are pricing a near coin-flip chance of a half-point increase in December, against another three-quarter point move.
Current market pricing also indicates the fed funds rate will top out near 5% before the rate hikes cease.
The fed funds rate sets the level that banks charge each other for overnight loans, but spills over into multiple other consumer debt instruments such as adjustable-rate mortgages, auto loans and credit cards.
Jerome Powell, chairman of the US Federal Reserve, speaks during a Fed Listens event in Washington, D.C., US, on Friday, Sept. 23, 2022.
Al Drago | Bloomberg | Getty Images
Political questioning of Federal Reserve Chair Jerome Powell about the central bank’s policy moves is intensifying, this time from the other side of the aisle.
No stranger to political pressure, the Fed chief this week found himself the focus of concern in a letter from Sen. Sherrod Brown. The Ohio Democrat warned in the letter about potential job losses from the Fed’s rate hikes that it is using to combat inflation.
“It is your job to combat inflation, but at the same time you must not lose sight of your responsibility to ensure that we have full employment,” Brown wrote. He added that “potential job losses brought about by monetary over-tightening will only worsen these matters for the working class.”
The letter comes with the Fed less than a week away from its two-day policy meeting that is widely expected to conclude Nov. 2 with a fourth consecutive 0.75 percentage point interest rate increase. That would take the central bank’s benchmark funds rate to a range of 3.75% to 4%, its highest level since early 2008 and represents the fastest pace of policy tightening since the early 1980s.
Without recommending a specific course of action, Brown asked Powell to remember the Fed has a two-pronged mandate — low inflation as well as full employment — and requested that “the decisions you make at the next FOMC meeting reflect your commitment to the dual mandate.”
The last time the Fed raised interest rates, from 2016 to December 2018, Powell faced withering criticism from former President Donald Trump, who on one occasion called the central bankers “boneheads” and seemed to compare Powell unfavorably with Chinese President Xi Jinping when he asked in a tweet, “Who is our bigger enemy?”
Democrats, including then-presidential hopeful Joe Biden, criticized Trump for his Fed comments, insisting the central bank be free of political pressure when formulating monetary policy.
Brown’s stance was considerably more nuanced than Trump’s — though equally unlikely to move the dial on monetary policy.
“Chair Powell has made it pretty clear that the necessary conditions for the Fed to achieve its full employment objective is low and stable inflation. Without low and stable inflation, there’s no way to achieve full employment,” said Mark Zandi, chief economist for Moody’s Analytics. “He’ll stick to his guns on this. I don’t see this as having any material impact on decision making at the Fed.”
To be sure, while it’s most likely a reaction to a changing tone from some Fed officials and a slight shift in the economic data, market expectations for monetary policy have altered a bit.
Traders have made peace with the three-quarter point hike next week. But they now see just a 36% chance for another such move at December’s Federal Open Market Committee meeting, after earlier rating it a near 80% probability, according to CME Group data.
That change in sentiment has come following cautionary remarks about overly aggressive policies from several Fed officials, including Vice Chairman Lael Brainard and San Francisco regional President Mary Daly. In remarks late last week, Daly said she’s looking for a “step-down” point where the Fed can slow the pace of its rate moves.
“The democratization of the Fed is the issue for the market, how much power the other members have versus the chairman. It’s difficult to know,” said Quincy Krosby, chief equity strategist at LPL Financial. Regarding Brown’s letter, Krosby said, “I don’t think it’s going to affect him. … It’s not the pressure coming from the politicians, which is to be expected.”
A Fed spokesman acknowledged that Powell received the Brown letter and said normal policy is to respond to such communication directly. In the past, Powell has been generally dismissive when asked if political pressure can factor into decision making.
Along with the nudging from Brown, Powell also has faced criticism from others on Capitol Hill.
Sen. Elizabeth Warren, the ultra-progressive Massachusetts Democrat and former presidential contender, has called Powell dangerous and recently also warned about the impact rate hikes could have on employment. Also, Sen. Joe Manchin, D-W. Va., last year criticized Powell for what was seen as the Fed’s flat-footed response to the early rise of inflation.
“I don’t necessarily think that Powell will buckle to the political pressure, but I’m wondering whether some of his colleagues start to, some of the doves who have become hawkish,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Employment’s fine now, but as months go on and growth continues to slow and layoffs begin to increase at a more notable pace, I have to believe that the level of pressure is going to grow.”
Payroll gains have been strong all years, but a number of companies have said they are either putting a freeze on hiring or cutting back as economic conditions soften. A slowing economy and stubbornly high inflation is making the backdrop difficult for the November elections, where Democrats are expected to lose control of the House and possibly the Senate.
With the high stakes in mind, both markets and lawmakers will be listening closely to Powell’s post-meeting news conference next Wednesday, which will come six days before the election.
“He knows the pressure. He knows that the politicians are increasingly nervous about losing their seats,” Krosby said. “There’s very little he could do at this point, by the way, to help either party.”
Philadelphia Federal Reserve President Patrick Harker on Thursday said higher interest rates have done little to keep inflation in check, so more increases will be needed.
“We are going to keep raising rates for a while,” the central bank official said in remarks for a speech in New Jersey. “Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year.”
The latter comment was in reference to the fed funds rate, which currently is targeted in a range between 3%-3.25%.
Markets widely expect the Fed to approve a fourth consecutive 0.75 percentage point interest rate hike in early November, followed by another in December. The expectation is that the Federal Open Market Committee, of which Harker is a nonvoting member this year, will then take rates a bit higher in 2023 before settling in a range around 4.5%-4.75%.
Harker indicated that those higher rates are likely to stay in place for an extended period.
“Sometime next year, we are going to stop hiking rates. At that point, I think we should hold at a restrictive rate for a while to let monetary policy do its work,” he said. “It will take a while for the higher cost of capital to work its way through the economy. After that, if we have to, we can tighten further, based on the data.”
Inflation is currently running around its highest level in more than 40 years.
According to the Fed’s preferred gauge, headline personal consumption expenditures inflation is running at a 6.2% annual rate, while the core, excluding food and energy prices, is at 4.9%, both well above the central bank’s 2% target.
“Inflation will come down, but it will take some time to get to our target,” Harker said.
EXCLUSIVE:
A former acting Immigration and Customs Enforcement (ICE) director, who served during the final days of President Trump’s tenure in the White House, is warning of the danger some congressional Democratic candidates pose to the agency’s mission of securing America’s borders and protecting United States citizens.
Several Democrats running for office in states around the country have come under fire for their views on immigration and how they believe issues at the southern border should be handled as border patrol agents continue to be overwhelmed by large influxes of illegal migrants.
One Democratic Senate candidate in particular, Wisconsin Lt. Gov. Mandela Barnes, who is seeking to unseat incumbent GOP Sen. Ron Johnson in the Badger State’s Nov. 8 midterm election, has liked numerous tweets that called for ICE to be abolished and criticized the agency. Similarly, in 2019, Barnes told the Wisconsin-based immigration group Voces de la Frontera Action that the “wrong ICE is melting.”
In an interview with Fox News Digital, Jonathan Fahey, a former deputy assistant secretary for the Department of Homeland Security who later served as the acting director of ICE from December 2020 to January 2021, reacted to the rhetoric from Barnes and considered it to be detrimental to ICE’s mission to provide safety for Americans.
“It’s kind of interesting how he’s trying to walk this back now because he’s running for election, trying to center himself to the middle,” Fahey said of Barnes. “He was associated with groups, liked tweets and other stuff to show that he wanted ICE abolished and it’s really just anti-ICE. He and others have been on this crusade to just take down ICE, demonize ICE agents in every single respect by calling them racists, delegitimizing what they’re doing, and treating them like they’re doing something heavy-handed, unlawful, when they’re simply just doing their job, trying to keep our communities safe and our country safe.… It really is disgraceful.”
Read more:
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New Orleans police off-duty officer shot during armed robbery
SHERIFFS OFFICE. WE WILL CONTINUE TO LOOK INTO THIS STORY AND BE AT THAT HEARING MONDAY. SULA: NEW DETAILS ABOUT THE SHOOTING OF AN OFF-DUTY NOPD OFFICER. TODAY WE LEARNED HE WAS THE VICTIM OF AN ARMED ROBBERY THAT RESULTED IN SHOTS FIRED. TRAVERS: WE ALSO NOW KNOW THAT OFFICER’S NAME, LOUIS BLACKMON. POLICE TELL US HE WAS SHOT IN THE STOMACH ON NORTH RENDON STREET, NEAR THE BAYOU BEER GARDEN. SULA: WDSU’S ELIZABETH KUEBEL IS LIVE IN THE AREA WITH THE LATEST DETAILS YOU’VE LEARNED TODAY, ELIZABETH? REPORTER: THE LATEST UPDATE WE GOT FROM NOPD JUST HOURS AGO AND SAID THE OFFICER WAS STILL IN THE HOSPITAL AND IS STABLE. BUT HEARING HE WAS SHOT, HAS SOME IN THIS MIDCITY NEIGHBORHOOD STARTLED. WE NOW KNOW THIS SCENE WAS THE ATTEMPTED ARMED ROBBERY OF AN OFF-DUTY NOPD OFFICER. IN A FRIDAY AFTERNOON UPDATE FROM POLICE, WE’RE TOLD FOUR YEAR VETERAN LOUIS BLACKMON WAS SHOT, ONCE IN THE STOMACH, AFTER SOMEONE POINTED A GUN AT HIM, AND DEMANDED HIS POSSESSIONS. >> I WAS SHOCKED. REPORTER: SHOCKING, FOR NEARBY EMPLOYEES, LIKE EVAN LUCAS, TO LEARN OF SHOTS FIRED JUST FEET FROM WHERE HE WORKS. >> ONE OF THE GIRLS WAS TALKING ABOUT IT, SHE’S WORRIED. EVERYBODY PARKS RIGHT OUT HERE AT NIGHT. REPORTER: WHEN WE CAME BACK OUT TO THE SCENE ON FRIDAY, WE SAW OFFICERS IN THE AREA, AND HEARD FROM PEOPLE WHO SPEND A LOT OF TIME HERE. >> THIS STUFF KEEPS HAPPENING. I’M SORRY. REPORTER: IT’S EMOTIONAL FOR LORI NINO, ESPECIALLY AS SHE THINKS ABOUT THE VICTIM. >> THAT COULD HAVE BEEN ONE OF MY KIDS. THAT IS SOMEBODY’S FAMILY MEMBER AND THIS IS SOMEBODY WHO PROTECTED AND SERVED OTHER PEOPLE. NO ONE DESERVES IT NO MATTER WHO IT IS. REPORTER: IT IS WORTH POINTING OUT, THE OWNER OF NEARBY BUSINESS, BAYOU BEER GARDEN, TOLD ME THEY DID NOT HAVE OR HIRE ANY OFF-DUTY POLICE OFFICERS ON THEIR PROPERTY LAS
New Orleans police off-duty officer shot during armed robbery
Updated: 6:16 PM CDT Oct 14, 2022
A New Orleans police officer was shot during an armed robbery in Mid-City on Thursday night. According to police, Officer Louis Blackmon was the victim of an armed robbery on the 300 block of North Rendon Street around 10:35 p.m. The suspect pulled a gun on the off-duty officer, demanding his possessions. according to new information released by NOPD. Police say a struggle ensued, which resulted in the officer getting shot in the abdomen. Blackmon is a four-year veteran who serves in the Fourth District. Anyone with information on this incident is asked to contact the Force Investigation Team at 504-658-6800 or call Crimestoppers anonymously at 504-822-1111 or toll-free at 1-877-903-7867.
A New Orleans police officer was shot during an armed robbery in Mid-City on Thursday night.
According to police, Officer Louis Blackmon was the victim of an armed robbery on the 300 block of North Rendon Street around 10:35 p.m.
The suspect pulled a gun on the off-duty officer, demanding his possessions. according to new information released by NOPD.
Police say a struggle ensued, which resulted in the officer getting shot in the abdomen.
Blackmon is a four-year veteran who serves in the Fourth District.
Anyone with information on this incident is asked to contact the Force Investigation Team at 504-658-6800 or call Crimestoppers anonymously at 504-822-1111 or toll-free at 1-877-903-7867.
Customers shop at the GU Co. store in the SoHo neighborhood of New York, US, on Friday, Oct. 7, 2022.
Gabby Jones | Bloomberg | Getty Images
Consumer spending was flat in September as prices moved sharply higher and the Federal Reserve implemented higher interest rates to slow the economy, according to government figures released Thursday.
Retail and food services sales were little changed for the month after rising 0.4% in August, according to the advance estimate from the Commerce Department. That was below the Dow Jones estimate for a 0.3% gain. Excluding autos, sales rose 0.1%, against an estimate for no change.
Considering that the retail sales numbers are not adjusted for inflation, the report shows that real spending across the range of sectors the report covers retreated for the month.
A Bureau of Labor Statistics report Thursday indicated that consumer prices rose 0.4% including all goods and services, and 0.6% when excluding food and energy.
Miscellaneous store retailers saw a decline of 2.5% for the month, while gasoline stations were off 1.4% as energy prices declined.
A slew of other sectors also posted drops, including sporting goods, hobby, books and music stores as well as furniture and home furnishing stores, both of which posted a -0.7% drop, while electronics and appliances were off 0.8% and motor vehicle and parts dealers fell 0.4%.
General merchandise store sales rose 0.7%. Gainers also included online stores, bars and restaurants, clothing retailers and health and personal care stores, all of which saw 0.5% increases.
While the gains for the month were muted, retail sales rose 8.2% from a year ago, matching the rise in the consumer price index. Shoppers remain generally flush with cash though there are indications of late that they are dipping into savings to make ends meet.
The Fed has enacted multiple interest rate hikes aimed at reducing inflation and bringing the economy back into balance. Markets expect the central bank to raise rates up to 1.5 percentage points more through the end of the year.
A separate report Thursday showed that import prices fell 1.2% in September, slightly more than the 1.1% estimate. Exports declined 0.8%.
Wholesale prices rose more than expected in September despite Federal Reserve efforts to control inflation, according to a report Wednesday from the Bureau of Labor Statistics.
The producer price index, a measure of prices that U.S. businesses get for the goods and services they produce, increased 0.4% for the month, compared with the Dow Jones estimate for a 0.2% gain. On a 12-month basis, PPI rose 8.5%, which was a slight deceleration from the 8.7% in August.
Excluding food, energy and trade services, the index increased 0.4% for the month and 5.6% from a year ago, the latter matching the August increase.
Inflation has been the economy’s biggest issue over the past year as the cost of living is running near its highest level in more than 40 years.
The Fed has responded by raising rates five times this year for a total of 3 percentage points and is widely expected to implement a fourth consecutive 0.75 percentage point increase when it meets again in three weeks.
A worker installs the instrument cluster for the Ford Motor Co. battery powered F-150 Lightning trucks under production at their Rouge Electric Vehicle Center in Dearborn, Michigan on September 20, 2022.
Jeff Kowalsky | AFP | Getty Images
However, Wednesday’s data shows the Fed still has work to do. Indeed, Cleveland Fed President Loretta Mester on Tuesday said “there has been no progress on inflation.” Following the PPI release, traders priced in an 81.3% chance of a three-quarter point hike, the same as a day ago.
Stock market futures trimmed gains following the news, while Treasury yields were little changed on the session.
The PPI release comes a day ahead of the more closely watched consumer price index. The two measures differ in that PPI measures the prices received at the wholesale level while CPI gauges the prices that consumers pay.
Some two-thirds of the increase in PPI was attributed to a 0.4% gain in services, the BLS said. A big contributor to that increase was a 6.4% jump in prices received for traveler accommodation services.
Final demand goods prices also rose 0.4% on the month, pushed by a 15.7% advance in the index for fresh and dry vegetables.