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  • Dow Jones Industrial Average Fast Facts | CNN

    Dow Jones Industrial Average Fast Facts | CNN

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    CNN
     — 

    Here’s a look at the Dow Jones Industrial Average.

    The Dow Jones Industrial Average is a stock index comprised of 30 “blue-chip” US stocks. It is meant to be a way to measure the strength or weakness of the entire US stock market.

    The Dow began in 1896 with 12 industrial stocks.

    Dow Jones & Co was founded by journalists Charles Dow and Edward Jones.

    Current Dow stocks

    Record high close – February 23, 2024, the Dow closes at 39,131.53 points.

    Biggest one-day point gain – March 24, 2020, the Dow gains 2,112.98 points.

    Biggest one-day percentage gain – March 15, 1933, the Dow closes up 15.34%.

    Biggest one-day point loss – March 16, 2020, the Dow closes down 2,997.1 points.

    Biggest one-day percentage loss – October 19, 1987, the Dow closes down 22.61%.

    1882 – Dow, Jones & Co. is created.

    1884 – Charles Dow creates the Dow Averages, the precursor to the DJIA.

    May 26, 1896 – The first index, made up of 12 industrial companies, is published and the Dow opens at 40.94 points.

    January 12, 1906 – The Dow closes at 100.25, the first close above 100.

    October 24, 1929 – The Stock Market crash of 1929 begins which leads to the Great Depression of the 1930s. It takes 25 years for the Dow to regain its September 1929 high of 381 points.

    1930 – Dow Jones becomes incorporated and the comma in the name is dropped.

    March 12, 1956 – The Dow closes at 500.24, the first close above 500.

    November 14, 1972 – The Dow closes at 1,003.16, the first close above 1,000.

    October 19, 1987 – The Dow closes down 508 points, at the time the biggest one-day drop ever in the Dow’s history.

    November 21, 1995 – The Dow closes at 5,023.55, the first close above 5,000.

    March 29, 1999 – The Dow closes at 10,006,78, the first close above 10,000.

    September 17, 2001 – Stock markets reopen after the 9/11 terror attacks.

    September 21, 2001 – After the first full week of trading post 9/11, the Dow falls more than 1,300 points, or about 14%.

    October 19, 2006 – The Dow closes at 12,011.73, the first close above 12,000.

    April 25, 2007 – The Dow closes at 13,089.89, the first close above 13,000.

    July 19, 2007 – The Dow closes at 14,000.41, the first close above 14,000.

    September 29, 2008 – Worst single-day point drop in history at the time, plunging 777.68 points – the same day the US House rejects the $700 billion financial bailout package.

    October 6-10, 2008 – Worst weekly point and percentage decline finishing at 8,451.19, or down 1,874.19 points and 18.15% for the week.

    February 21, 2012 – The Dow crosses the 13,000 level for the first time since May of 2008.

    February 1, 2013 – The Dow closes above 14,000 for the first time since October of 2007.

    May 7, 2013 – The Dow closes above 15,000 for the first time.

    November 21, 2013 – The Dow closes above 16,000 for the first time, at 16,009.99.

    July 3, 2014 – The Dow closes at 17,068.26, the first close above 17,000.

    December 23, 2014 – The Dow closes at 18,024.17, the first close above 18,000.

    August 26, 2015 – The Dow closes with a 619-point gain, the biggest daily point gain since 2008.

    January 7, 2016 – The Dow drops 5% in its first four days of the year, the worst four-day percentage loss to start a year on record.

    November 22, 2016 – The Dow closes at 19,023.87, the first close above 19,000.

    January 25, 2017 – The Dow hits the 20,000 milestone for the first time in history.

    March 1, 2017 – The Dow closes at 21,115.55, the first close over 21,000 in history.

    August 2, 2017 – The Dow closes above 22,000 for the first time, at 22,016.24.

    October 18, 2017 – The Dow closes above 23,000 for the first time, at 23,157.60.

    November 30, 2017 – The Dow closes above 24,000 for the first time, at 24,272.35.

    January 4, 2018 – The Dow closes at 25,075.13, the first close above 25,000.

    January 17, 2018 – The Dow closes at 26,115.65, the first time it has closed above 26,000.

    July 11, 2019 – The Dow closes at 27,088.08, the first time it has closed above 27,000.

    November 15, 2019 – The Dow closes above 28,000 for the first time, at 28,004.89.

    January 15, 2020 – The Dow closes above 29,000 for the first time, at 29,030.22.

    March 16, 2020 – The Dow records its worst one-day point drop in history, 2,997.1 points, and its worst performance on a percentage basis since October 19, 1987, also known as “Black Monday.”

    March 24, 2020 – The Dow closes with a 2,112.98-point gain, to become the biggest one-day point gain in history.

    November 24, 2020 – The Dow closes above 30,000 for the first time, at 30,046.24.

    January 7, 2021 – The Dow closes at 31,041.13, the first close above 31,000.

    March 10, 2021 – The Dow closes at 32,297.02, the first close above 32,000.

    March 17, 2021 – The Dow closes above 33,000 for the first time, at 33,015.37.

    April 15, 2021 – The Dow closes above 34,000 for the first time, at 34,035.99.

    July 23, 2021 – The Dow closes above 35,000 for the first time, at 35,061.55.

    November 2, 2021 – The Dow closes at 36,052.63, the first close above 36,000.

    December 13, 2023 – The Dow closes above 37,000 for the first time, at 37,090.24.

    January 22, 2024 – The Dow closes at 38,001.81, the first close above 38,000.

    February 22, 2024 – The Dow closes at 39,069.11, the first close above 39,000.

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  • Dow surges to new record as Fed signals three rate cuts in 2024 | CNN Business

    Dow surges to new record as Fed signals three rate cuts in 2024 | CNN Business

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    Titans of finance have been warning for months that looming geopolitical dangers are the biggest threat by and large to the US economy. But even as wars rage on in the Middle East and Eastern Europe, markets have been enjoying an end-of-year rally.

    The S&P 500 reached its highest level since January 2022 on Tuesday, following new data that showed cooling inflation. The surge came even as the Israel-Gaza war intensified and the Russia-Ukraine war approached the end of its second year.

    It appears that, for now, Wall Street is skeptical of the impact of war on the US economy and is instead more focused on the Federal Reserve and inflation rates than conflict abroad.

    JPMorgan Chase CEO Jamie Dimon has repeatedly said that geopolitical uncertainty is currently the biggest risk in the world.

    He stressed, at last month’s New York Times DealBook Summit, that this may be the most dangerous time the world has seen in decades, and that the wars in Ukraine, Israel and Gaza could have far-reaching impacts on global energy, food supply, trade and geopolitics. It could even, he said, lead to nuclear blackmail (using the threat of nuclear warfare as leverage to coerce another country into meeting certain demands).

    He’s not alone. EY’s latest CEO Outlook Pulse survey found that 99% of CEOs said they were shifting their investments in response to geopolitical challenges.

    Violent conflicts abroad pose the largest threat to markets next year, according to a Natixis survey of 500 institutional investors from around the world.

    “The biggest macroeconomic risk for 2024 is geopolitical bad actors who with one action can upset economic and market assumptions globally,” the group wrote. That risk ranked above policy errors by central banks, a slowing Chinese economy and dwindling consumer spending.

    But the S&P 500 is up by 9% since Hamas’ October 7 attack and up 10% since Russia’s full-scale invasion of Ukraine in February 2022.

    “Many armchair forecasters bid up hysteria regarding the ongoing war in Ukraine and the October 7 terrorist attack in Israel,” wrote Marko Papic, chief strategist at the Clocktower Group, in a note this week. “In the end, neither event had any impact on markets.”

    Instead, investors appear locked in on the Fed — and investors aren’t going to let geopolitics get in the way of their holiday cheer.

    “With geopolitical tensions elevated in the world, I think it’s very important that we don’t conflate the very muted response that we’ve seen, say over the last four to five weeks, with markets being very sanguine, because they’re not,” said Sinead Colton Grant, incoming chief investment officer at BNY Mellon, at last month’s Reuters NEXT conference in New York.

    “They’re watching the evolution very, very closely and there’s an assumption that all these events remain fairly contained. Should that turn out not to be the case, you will see markets react quite sharply, and that would reverberate beyond the equity markets,” she said.

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  • Interest rates are high. These are the best places to park your cash | CNN Business

    Interest rates are high. These are the best places to park your cash | CNN Business

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    Editor’s Note: This is an update of an article that originally ran on September 20, 2023.


    New York
    CNN
     — 

    The Federal Reserve on Wednesday chose not to raise its key interest rate, the same decision it took following its September meeting, leaving its benchmark lending rate at its highest level in 22 years.

    Given that the Fed influences — directly or indirectly — interest rates on financial accounts and products throughout the US economy, savers and people with surplus cash still have many opportunities to get a far better return on their money than they’ve had in years — and even more importantly, a return that outpaces the latest readings on inflation.

    Here are low-risk options to get the best yield on funds you plan to use within two years, and also on cash you expect to need within the next two to five years.

    The average annual percentage yield on bank savings accounts was just 0.59%, according to an October 31 survey from Bankrate. That average is kept low by a nearly zero APY at the biggest brick-and-mortar banks like JPMorgan Chase and Bank of America, which were each offering rates of just 0.01%.

    But many online, FDIC-insured banks are offering well north of 5% on their high-yield savings accounts.

    Those accounts are a great place to deposit money that you will likely deploy within the next two years — to cover anything from a planned vacation or big purchase to an emergency expense or an unexpected change of circumstance like a job loss.

    While bank deposit account yields can change overnight, they have remained high for months and are likely to continue to do so. “In the last few months, the Fed has signaled that it intends to keep rates higher for longer. … Some banks have responded to this new ‘higher for longer’ expectation by offering promotional rate guarantees on their savings or money market accounts. In the guarantee, a competitive rate is guaranteed to last for several months on the savings or money market account,” said Ken Tumin, founder of DepositAccounts.com.

    An online savings account is what certified financial planner Lazetta Rainey Braxton, co-CEO at 2050 Wealth Partners, calls your “cushion” account. She likes the word “cushion” because it describes the flexibility and options such an account gives you to handle both what you want to do in the near term and what you might need to do.

    Another way high-yield accounts can be useful, Braxton said, is to house money you’ll need to pay off a purchase for which you’ve secured a 0% financing deal for a limited period of time. In that case, you won’t owe interest on your purchase so long as you pay it off in full before the end of the promotion period, which can be anywhere from six to 24 months. In the meantime, the money can grow by 4% to 5% a year in your high-yield account.

    For your regular household bills, Braxton recommends keeping just enough cash to cover a month or two in a regular checking account for fastest access. “Not too much, because [those accounts] won’t yield much,” she said.

    You can always link your high-yield account to your checking account to transfer funds when needed — just know it may take up to 24 hours for the transferred money to show up in your checking account, Braxton noted.

    Money market accounts and funds

    If you don’t want to set up an online savings account at another bank, your own bank may offer you a money market deposit account that pays a higher yield than your regular checking or savings accounts.

    Money market accounts may have higher minimum deposit requirements than a regular savings account, but they are more liquid than a fixed-term certificate of deposit or Treasury bill, meaning they give you access to your money more quickly while still potentially giving you some of the highest yields available, said Doug Ornstein, senior manager for integrated solutions at TIAA Wealth Management.

    But don’t confuse money market accounts with money market mutual funds, which invest in short-term, low- risk debt instruments. As of Oct 31, they had an average 7-day yield of 5.19%, according to the Crane Money Fund Index, which tracks the top 100 taxable money market funds.

    Unlike money market deposit accounts, money market mutual funds are not insured by the FDIC. But if you invest in a money market fund through a brokerage, your overall account is likely to be insured through the Securities Investor Protection Corp (SIPC), which offers protection in the event your brokerage ever goes under.

    Another high-return, low-risk investment that is great for money you likely won’t need to tap for a few months or even a couple of years are certificates of deposit.

    You can get the best returns on CDs through a brokerage such as Schwab, E*Trade or Fidelity. That’s because you can comparison shop for CDs from any number of FDIC-insured banks and will not have to set up individual accounts with each institution.

    To get the greatest benefit from a CD, you have to leave the money invested for a fixed period. You can always access your principal sooner if you need to, but if you do you will forfeit at least some interest.

    As of November 1, CDs listed on Schwab.com with durations of three months, six months, nine months, one year and 18 months were all yielding at least 5.5% .

    Say you invest $10,000 in a six-month CD with a 5.5% APY. At the end of that period, you’ll get your principal back plus nearly $274 in interest when the CD matures, according to Bankrate’s CD calculator. If you put it in a one-year CD you’d earn $555 in interest, while an 18-month term will generate $844.

    If you don’t go through a brokerage you may get a reasonable deal from your primary bank. Tumin said. For example, he noted, Citi came out with an 11-month CD Special with a rate of up to 5.65% APY. But he cautions that with any big bank CD you should take your money out at the end of the term, otherwise your bank may automatically renew it and lock you in to a much lower-yielding CD.

    Another option for money you can leave untouched anywhere from several months to a few years are short-term Treasury bills, which are backed by the full faith and credit of the United States.

    Three- and six-month bills had yields of 5.46% and 5.54% respectively on November 1, while nine-month and one-year bills were offering 5.46% and 5.43%, according to rates posted on Schwab.com for a $25,000 investment.

    If you’re someone who manages your portfolio like a hawk, you may feel comfortable buying T-bills on your own from TreasuryDirect.gov. But if you don’t, it might be easier just to buy new issues through your brokerage account or invest in a short-term bond index fund or ETF, said Andy Smith, executive director of financial planning at Edelman Financial Engines.

    And if you’re looking at money that will be needed in three to five years, you might consider a diversified fund of highly rated government and corporate bonds, Ornstein said. Yields on four-year, AAA rated corporate bonds, for instance, were yielding 4.97% this week, and three-year AAA-rated municipal bonds (which are issued by local governments) had rates of 4.59%, according to Schwab.com.

    When deciding on the best accounts and investments for your specific goals and peace of mind, it may pay to consult a fee-only fiduciary adviser — meaning someone who doesn’t get paid a commission to sell you a particular investment.

    What you’ll always want to do is build in flexibility for yourself so you can easily access cash, regardless of your timeline for key goals. “What happens if something changes and you need that down payment a lot sooner — or your parents need medical care fast?” Smith said.

    That means balancing your desire for great yield with a need and desire for ease of access without penalty. Translation: Don’t chase yield for yield’s sake.

    Think of it this way, Ornstein said: Unless you have huge sums to invest or are an institutional investor, the difference between getting a 5.1% yield versus 5% is negligible, and in fact it could even cost you more if there are penalties for taking your money out early. “Most of the time convenience is really important. Give up the 0.1%,” he advised.

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  • US new home sales surged in September | CNN Business

    US new home sales surged in September | CNN Business

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    Washington, DC
    CNN
     — 

    New home sales in the United States surged higher in September from the month before, even as mortgage rates remained over 7%, making financing a home costlier and pushing people out of the market.

    Sales of newly constructed homes jumped 12.3% in September to a seasonally adjusted annual rate of 759,000, from a revised rate of 676,000 in August, according to a joint report from the US Department of Housing and Urban Development and the Census Bureau. Sales were up 33.9% from a year ago.

    This represents the fastest pace of sales since February 2022 and easily exceeds analysts’ expectations of a sales pace of 680,000.

    Sales of existing homes have been trending down since February and are down 20% year to date in September from a year ago. There is an ongoing inventory and affordability crunch that has homeowners with mortgage rates of 3% or 4% reluctant to sell and buy another home at a much higher rate. In August, rates topped 7% and have lingered there as the Federal Reserve continues to address inflation.

    The average rate for a 30-year, fixed-rate mortgage was 7.63% last week, according to Freddie Mac, and there are indications it could continue to climb.

    “With one more Fed interest rate hike expected for the year, interest rates are not anticipated to drop any time soon,” said Kelly Mangold of RCLCO Real Estate Consulting.

    New construction has been an appealing alternative, attracting determined buyers frustrated by the historically low supply of existing homes. Still, affordability concerns remain.

    “The constraints in the housing market have created a significant amount of pent-up demand, as more and more households are living in homes they may have outgrown and are deciding to buy despite current market conditions,” said Mangold.

    According to the report, new home sales activity increased the most in the south, “a region that continues to outperform due to availability of land, population and job growth, and a relatively lower cost of living,” said Mangold.

    While new home sales are a much smaller share of the overall sales market than existing home sales, the inventory picture is rosier for new construction homes.

    The seasonally adjusted estimate of new homes for sale at the end of September was 435,000. This represents a supply of 6.9 months at the current sales pace.

    By comparison, there were 1.13 million existing homes for sale at the end of September, or the equivalent of 3.4 months’ supply at the current monthly sales pace.

    Typically, the ratio of existing homes to new homes has been closer to 5 to 1, but lately it has been closer to 2 to 1, according to the National Association of Realtors.

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  • China’s narrowing trade slump boosts recovery prospects, but challenges persist | CNN Business

    China’s narrowing trade slump boosts recovery prospects, but challenges persist | CNN Business

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    Beijing
    Reuters
     — 

    China’s exports and imports shrank at a slower pace for a second month in September, customs data showed on Friday, adding to the recent signs of a gradual stabilization in the world’s second-biggest economy thanks to a raft of policy support measures.

    The trade report should provide some encouragement to authorities, although stiff challenges remain in an economy facing persistent deflationary pressure, a long-running property crisis, a slowdown in global growth and geopolitical tensions.

    Outbound shipments in September declined 6.2% from a year ago, following a drop of 8.8% in August, and beating economists’ forecast for a 7.6% fall in a Reuters poll.

    The figures were backed up by new export orders in an official factory survey two weeks ago which showed improvement last month, partly because of a peak export shipping season for Christmas products and favorable base effects.

    “There’s increasing evidence that the cyclical upturn in the global electronics sector is driving a bottoming-out of global trade and China’s trade data is the latest sign,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

    “This gives reason for optimism about a rosier trade picture in 2024,” he said.

    South Korean exports to China, a leading indicator of China’s imports, fell at their slowest pace in 11 months in September. Semiconductors make up the bulk of their trade, signaling improving appetite among Chinese manufacturers for components to re-export in finished goods.

    Global trade activities, represented by the Baltic Dry Index, also reported notable growth in September.

    However, Lv Daliang, spokesperson of the General Administration of Customs, said at a press conference earlier on Friday that China’s trade still faces a complex and severe external environment.

    Thanks to gradual recovery in domestic demand, imports also fell at a slower pace, down 6.2%. They missed the 6.0% decline forecast in the poll, but came in better than a 7.3% contraction in August.

    That resulted in a broader trade surplus of $77.71 billion in September, compared with a $70 billion surplus expected in the poll and $68.36 billion in August.

    Overall, economists say it’s too early to make a call on how domestic demand will pan out in coming months as the crisis-hit property sector, uncertainties in employment and household income growth, as well as weak confidence among some private firms, pose risks to a durable economic rebound.

    The $18 trillion economy started losing steam from the second quarter after a brief post-Covid bounce, prompting policymakers to roll out several measures to shore up the recovery in the face of a sluggish housing market, high youth unemployment and mounting local debt repayment pressure.

    China’s consumer prices faltered and factory-gate prices shrunk slightly faster than expected last month compared with a year earlier, inflation data released earlier on Friday showed, indicating that deflationary pressures persist in the economy.

    Yet, authorities can take some comfort from recent data including upbeat factory activity and retail sales while the past Golden Week holiday travel edged up 4.1% from pre-pandemic 2019 levels.

    In order to help the economy meet the government’s annual growth target of around 5%, China is considering issuing at least 1 trillion yuan ($137.00 billion) of additional sovereign debt to fund infrastructure projects, as Beijing prepares to bring a new round of stimulus, Bloomberg News reported on Tuesday, citing people familiar with the matter.

    Most analysts have been reiterating in recent months that policymakers will need to go further than introducing piecemeal measures in order to bolster the economic recovery.

    “Whatever does emerge from Beijing over the coming months, it likely won’t be quick enough to make any meaningful difference to 2023,” said Robert Carnell, regional head of research Asia-Pacific at ING in a note.

    “At best, it should be viewed as a pain management tool for the transition to a less leveraged economy.”

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  • The IMF sees greater chance of a ‘soft landing’ for the global economy | CNN Business

    The IMF sees greater chance of a ‘soft landing’ for the global economy | CNN Business

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    London
    CNN
     — 

    The International Monetary Fund (IMF) sees better odds that central banks will manage to tame inflation without tipping the global economy into recession, but it warned Tuesday that growth remained weak and patchy.

    The agency said it expected the world’s economy to expand by 3% this year, in line with its July forecast, as stronger-than-expected growth in the United States offset downgrades to the outlook for China and Europe. It shaved its forecast for growth in 2024 by 0.1 percentage point to 2.9%.

    Echoing comments made in July, the IMF highlighted the global economy’s resilience to the twin shocks of the pandemic and the Ukraine war while warning in its World Economic Outlook that risks remained “tilted to the downside.”

    “Despite war-disrupted energy and food markets and unprecedented monetary tightening to combat decades-high inflation, economic activity has slowed but not stalled,” IMF chief economist Pierre-Olivier Gourinchas wrote in a blog post. “The global economy is limping along,” he added.

    The IMF’s projections for growth and inflation are “increasingly consistent with a ‘soft landing’ scenario… especially in the United States,” Gourinchas continued.

    But he cautioned that growth “remains slow and uneven,” with weaker recoveries now expected in much of Europe and China compared with predictions just three months ago.

    The 20 countries using the euro are expected to grow collectively by 0.7% this year and 1.2% next year, a downgrade of 0.2 percentage points and 0.3 percentage points respectively from July.

    The IMF now expects China to grow 5% this year and 4.2% in 2024, down from 5.2% and 4.5% previously.

    “China’s property sector crisis could deepen, with global spillovers, particularly for commodity exporters,” it said in its report

    By contrast, the United States is expected to grow more strongly this year and next than expected in July. The IMF upgraded its growth forecasts for the US economy to 2.1% in 2023 and 1.5% in 2024 — an improvement of 0.3 percentage points and 0.5 percentage points respectively.

    “The strongest recovery among major economies has been in the United States,” the IMF said.

    The agency expects that inflation will continue to fall — bolstering the case for a “soft landing” in major economies — but it does not expect it to return to levels targeted by central banks until 2025 in most cases.

    The IMF revised its forecasts for global inflation to 6.9% this year and 5.8% next year — an increase of 0.1 percentage point and 0.6 percentage points respectively.

    Commodity prices pose a “serious risk” to the inflation outlook and could become more volatile amid climate and geopolitical shocks, Gourinchas wrote.

    “Food prices remain elevated and could be further disrupted by an escalation of the war in Ukraine, inflicting greater hardship on many low-income countries,” he added.

    Oil prices surged Monday on concerns that the latest conflict between Israel and Hamas could cause wider instability in the oil-producing Middle East. Brent crude prices were already elevated following supply cuts by major producers Saudi Arabia and Russia.

    High oil and natural gas prices, leading to skyrocketing energy costs, helped drive inflation to multi-decade highs in many economies in 2022. The latest jump in oil prices could cause a fresh bout of broader price rises.

    Bond investors are already on edge. They dumped government bonds last week in the expectation that the world’s major central banks would keep interest rates “higher for longer” to bring inflation down to their targets.

    The IMF also pointed to concerns that high inflation could become a self-fulfilling prophecy. If households and businesses expect prices to go on rising, that could cause them to set higher prices for their goods and services, or demand higher wages.

    “Expectations that future inflation will rise could feed into current inflation rates, keeping them high,” the IMF noted.

    It added that the “expectations channel is critical to whether central banks can achieve the elusive ‘soft landing’ of bringing the inflation rate down to target without a recession.”

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  • Pressure to fill House speaker vacancy builds amid crisis in Israel | CNN Politics

    Pressure to fill House speaker vacancy builds amid crisis in Israel | CNN Politics

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    CNN
     — 

    The House speakership drama enters a new week under increased urgency as Israel declared war Sunday following unprecedented surprise attacks by Hamas.

    Kevin McCarthy’s unprecedented ouster as speaker leaves the House iin uncharted legal territory regarding what it can do under acting Speaker Patrick McHenry. When Congress reconvenes Monday, lawmakers will be under pressure to elect a new speaker swiftly amid the crisis in Israel, which has prompted calls from within the Republican Party to speed up their timeline given the national security implications of keeping the role vacant.

    As the Biden administration looks to provide additional assistance to Israel, officials were unsure Saturday about what could be accomplished without a sitting speaker. While McHenry is serving as speaker pro tempore, he has little power outside of recessing, adjourning or recognizing speaker nominations, and it’s unclear whether he can participate in intelligence briefings on the crisis in Israel.

    Democratic House Minority Leader Hakeem Jeffries said Sunday that he had conversations with the White House and the National Security Council on Saturday, but he has not yet met with the Gang of Eight – which typically includes the top leaders and heads of the intelligence committees in both parties and both chambers.

    “I do anticipate that we’ll have the opportunity to have a secure briefing at some point next week,” Jeffries told CNN’s Dana Bash on “State of the Union.”

    Jeffries said it is his understanding that the Biden administration can make some decisions regarding aid to Israel without waiting for Congress and urged the administration to do so, adding that he expects “it will provide whatever assistance it can.”

    House Foreign Affairs Chairman Mike McCaul told Bash Sunday that there is currently $3.3 billion in foreign military financing already appropriated that the president can use.

    The Texas Republican also called McCarthy’s ouster “dangerous.”

    “I look at the world and all of the threats that are out there and what kind of message are we sending to adversaries when we can’t govern, when we are dysfunctional, when we don’t even have a speaker of the House?” McCaul said on “State of the Union.”

    McCarthy on Saturday slammed his Republican colleagues for removing him from office last week, and stressed the impact of a speakerless House on national security. “Why would you ever remove a speaker during a term to raise doubt around the world?” McCarthy asked in a Fox News interview.

    McCarthy announced shortly after his ouster that he would not seek the speakership again, making room for House Majority Leader Steve Scalise of Louisiana and Ohio Rep. Jim Jordan to launch their bids for the seat. Former President Donald Trump has thrown his support behind Jordan. Oklahoma Rep. Kevin Hern announced Saturday that he had decided not to run, saying “I believe a three-man race for Speaker will create even more division and make it harder to elect a Speaker.”

    House Republicans are scheduled to hold a candidate forum on Tuesday and an internal election on Wednesday. But it’s unclear when the floor vote will happen, and the timeline is contingent on whether moderate GOP lawmakers can rally around Scalise or Jordan, who are among the hardliners of the party.

    “We have to get a speaker elected this week so we can get things on the floor like replenishing the Iron Dome,” McCaul told Bash on Sunday – referring to Israel’s rocket defense system, which was developed with help from the United States. He added that the House should look to pass a resolution condemning Hamas “by unanimous consent whether or not we have a speaker in place because I think we cannot wait. We have to get that message out as soon as possible.”

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  • Why you should care about the global rout in government bonds | CNN Business

    Why you should care about the global rout in government bonds | CNN Business

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    London
    CNN
     — 

    A slump in government bonds around the world has pushed up the cost of some nations’ debt to levels not seen in more than a decade. That’s bad news for governments in the red but also for the wallets of millions of mortgage borrowers, stock investors and businesses.

    The sell-off has been fueled by expectations among investors that the world’s major central banks will keep interest rates “higher for longer” to bring inflation down to their targets.

    It works like this: Governments looking to raise cash for public services and investments issue bonds. A bond provides a way to borrow money from investors for a set length of time, with the obligation to make regular interest payments.

    When official interest rates rise, so do investors’ expectations for returns on bonds, known as yields. This creates an incentive for investors to sell the bonds they currently hold and buy newly issued ones that offer higher interest payments. Selling bonds reduces prices. So, in short, when yields rise, bond prices fall.

    And yields have most definitely been rising: The yield on 30-year US government bonds, also known as Treasuries, hit 5% on Tuesday for the first time since 2007. In the United Kingdom, the yield on 30-year bonds also reached 5% this week, the highest level in more than two decades.

    Yields on German long-dated bonds are back to levels last seen on the eve of the eurozone debt crisis in 2011. Yields on Italy’s 10-year bonds hit 5% on Wednesday, the highest level since 2012, when that crisis was in full swing.

    Here’s why you should care.

    The yields on local government bonds are usually used by banks to price mortgages.

    The disastrous “mini” budget unveiled by former UK Prime Minister Liz Truss in September last year provided a stark illustration of that relationship. Her plan to borrow tens of billions of pounds to fund tax cuts spooked bond investors who feared that the country’s finances were on an unsustainable path.

    The resulting sell-off in UK government bonds — called “gilts” — caused yields to shoot up, taking mortgage costs higher with them.

    The average interest on a two-year fixed-rate mortgage soared to 6.47% at the start of November 2022, according to data from product comparison website Moneyfacts, the highest level since the depths of the global financial crisis in August 2008.

    Early morning sun illuminates streets of residential terraced houses, on September 17, 2023 in Bath, England. Soaring interest rates and falling prices has meant the end of the UK's 13-year housing market boom potentially leading to a wider house price crash.

    That meant hundreds of pounds more a month in mortgage payments. Before higher mortgage rates kicked in, some panicked homeowners rushed to refinance their fixed-rate loans earlier than planned, accepting a financial penalty for doing so.

    Mortgage rates had been falling back since the drama last fall but are now back to 6.47%, this month’s data from Moneyfacts shows.

    In the United States, mortgage rates tend to track the yield on 10-year Treasuries, and that yield has risen 0.27 percentage points since late September.

    On Thursday, government-backed mortgage provider Freddie Mac announced that the average interest on a 30-year fixed-rate mortgage had hit 7.31% in the week ending September 28 — its highest level since 2000.

    “Higher mortgage rates create a standoff between potential buyers, who face some of the highest borrowing rates since 2000, and sellers, who may already enjoy a low fixed-rate mortgage and thus are less incentivized to sell,” Andrew Sheets, global head of corporate credit research at Morgan Stanley, told CNN.

    Surging government bond yields are probably coming for your stock portfolios too.

    Shares typically lose value when the yields on government debt rise, as investors can now get high returns — and a steady income — from less risky assets.

    Take the yield on 10-year Treasuries: at 4.78%, it is more than twice as high as the average yearly dividend paid out by the companies making up the S&P 500 index (SPX).

    “The higher the gilt yield goes, the less inclined, or obliged, investors will feel to take risk and pay up for other asset classes, such as shares,” Russ Mould, investment director at AJ Bell, told CNN.

    Stock indexes have tumbled on both sides of the Atlantic in recent weeks. The S&P 500 and the tech-heavy Nasdaq Composite (NDX) have shed 4% and 2.3% respectively since the Federal Reserve said late last month that it could hike rates once more this year and expected to make fewer rate cuts in 2024.

    The STOXX Europe 600 has sunk 4.5% and London’s FTSE 100 4.3% in that time.

    “Income is back,” analysts at BlackRock, the world’s biggest asset manager, wrote in a note Monday, recommending investments in short-dates US Treasuries.

    Stocks have also taken a hit in recent weeks as rising oil prices, an ailing Chinese economy and the prospect of another government shutdown in the United Stated have unnerved investors.

    High official interest rates in America and Europe have also raised the cost of borrowing for businesses.

    “Higher interest rates make borrowing less attractive, and we’ve already seen a sharp slowing of bank lending that we think is consistent with this idea,” said Sheets at Morgan Stanley.

    “It’s important to note that slower credit growth, which generally means a cooler economy, is precisely what the Federal Reserve is trying to achieve through its large recent rate hikes,” he added.

    Higher yields also mean that the government must pay more to service its debt — with less money available to spend elsewhere.

    The US government is currently sitting on a $33 trillion debt pile and is expected to incur more than $1 trillion in average annual interest costs over the next decade.

    In March, when gilt yields were much lower than now, the UK’s public spending watchdog said it expected the annual interest paid on the government’s pile of debt to peak at £115 billion ($140 billion) this year. That’s almost three times as much as the UK government plans to spend in 2023 on a key benefit for children and people with disabilities.

    Rising bond yields mean that “for any given level of borrowing, more must be spent on debt interest, leaving less scope to finance other priorities,” the Office for Budget Responsibility said in its March forecast.

    Higher gilt yields give politicians “less wiggle room to ease [the] cost-of-living pain through tax cuts or public sector pay offers,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, wrote in a note Wednesday.

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  • Government on brink of shutdown ahead of midnight deadline as McCarthy slates last-minute vote | CNN Politics

    Government on brink of shutdown ahead of midnight deadline as McCarthy slates last-minute vote | CNN Politics

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    CNN
     — 

    Federal agencies are making final preparations with the government on the brink of a shutdown and congressional lawmakers racing against Saturday’s critical midnight deadline – as House Speaker Kevin McCarthy mounts a last-minute push to avert the lapse in funding.

    McCarthy announced that the House will vote on a 45-day short-term spending bill Saturday, and it will include the natural disaster aid that the White House requested.

    The bill does not include $6 billion in funding to aid Ukraine, a key concession that many House Republicans demanded and a blow to allies of Ukrainian President Volodymyr Zelensky, who lobbied Congress earlier this month for additional assistance.

    Asked if he is concerned that a member, including Republican Rep. Matt Gaetz of Florida, could move to oust him over this bill, McCarthy replied, “If I have to risk my job for standing up for the American public, I will do that.”

    Infighting among House Republicans has played a central role in bringing Congress to a standoff over spending – and it is not yet clear how the issue will be resolved, raising concerns on Capitol Hill that a shutdown, if triggered, may not be easy to end.

    Democrats in the House have been trying to slow down passage of the GOP-led continuing resolution throughout the day Saturday, objecting to being forced to vote on a bill just introduced and wanting to keep Ukraine aid. It’s unclear how long Democrats will stall the House from voting.

    House Republicans met throughout Saturday morning, seesawing between options for how to proceed. Republicans including veteran appropriators and those in swing districts pushed to bring a short-term resolution to keep the government funded for 45 days to the House floor for a vote Saturday.

    McCarthy has faced threats to keeping his job throughout the month if he works with Democrats as he endures a consistent resistance from the hardline conservatives in his own party.

    A shutdown is expected to have consequential impacts across the country, from air travel to clean drinking water, and many government operations would grind to a halt – though services deemed essential for public safety would continue.

    Both chambers are scheduled to be in session Saturday, just hours before the deadline. The Senate was expected to take procedural steps to advance their own plan to keep the government funded – GOP Sen. Rand Paul had vowed all week to slow that process beyond the midnight deadline over objections to the bill’s funding for the war in Ukraine. The Senate is now waiting to see how the House developments shake out before proceeding.

    But Paul told CNN on Saturday afternoon that he won’t slow down the Senate’s consideration of the House GOP’s 45-day spending bill, if it passes the House and the Senate takes it up, allowing the Senate the ability to move the bill quickly – though any one other senator could slow that down beyond the midnight deadline.

    House Republicans have so far thrown cold water on a bipartisan Senate proposal to keep the government funded through November 17, but they have failed to coalesce around a plan of their own to avert a shutdown amid resistance from a bloc of hardline conservatives to any kind of short-term funding extension.

    “After meeting with House Republicans this evening, it’s clear the misguided Senate bill has no path forward and is dead on arrival,” McCarthy wrote on X. “The House will continue to work around the clock to keep government open and prioritize the needs of the American people.”

    His late Friday night message came after a two-hour conference meeting in the Capitol, where McCarthy floated several different options – including putting the Senate bill on the floor or passing a short-term bill that excludes Ukraine money. But there is still no consensus on what – if anything – they will put on the House floor Saturday to avoid a government shutdown.

    McCarthy suffered another high-profile defeat on Friday when the House failed to advance a last-ditch stopgap bill.

    In the aftermath of Friday’s failed vote, McCarthy told reporters he had proposed putting up a “clean” stopgap bill, and said he was “working through maybe to be able to do that.”

    “We’re continuing to work through – trying to find the way out of this,” McCarthy said.

    The Senate’s bipartisan bill would provide additional funds for Ukraine aid, creating a point of contention with the House where many Republicans are opposed to further support to the war-torn country.

    McCarthy argued on Friday that aid to Ukraine should be dropped from the Senate bill. “I think if we had a clean one without Ukraine on it, we could probably be able to move that through. I think if the Senate puts Ukraine on there and focuses on Ukraine over America, I think that could cause real problems,” he told CNN’s Manu Raju.

    The Senate, meanwhile, is working to advance its own bipartisan stopgap bill. The chamber is on track to take a procedural vote Saturday afternoon to move forward with the bill, particularly if the last-minute House bill falters. But it’s not yet clear when senators could take a final vote to pass the bill and it may not happen until Monday, after the government has already shut down.

    Border security has also become a complicating factor for the Senate bill as many Republicans now want to see the bill amended to address the issue.

    Senate Republicans said Friday that they were still discussing what kind of border amendment they would want to add to the bill, and were unsure if the chamber could even advance the bill in Saturday’s procedural vote without the addition of a border amendment.

    “Nothing’s really coming together, too many moving parts at this stage,” said Sen. Mike Braun, an Indiana Republican. “I think what I understand is we’re going to have a vote tomorrow … and other than that, there’s nothing that’s really crystallized in anything that probably would be palatable with the House.”

    This story and headline have been updated with additional developments.

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  • US mortgage rates climb to 7.31%, hitting their highest level in nearly 23 years | CNN Business

    US mortgage rates climb to 7.31%, hitting their highest level in nearly 23 years | CNN Business

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    Washington, DC
    CNN
     — 

    US mortgage rates surged to their highest level in nearly 23 years this week as inflation pressures persisted.

    The 30-year fixed-rate mortgage averaged 7.31% in the week ending September 28, up from 7.19% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 6.70%.

    “The 30-year fixed-rate mortgage has hit the highest level since the year 2000,” said Sam Khater, Freddie Mac’s chief economist, in a statement. “However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances.”

    The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

    Mortgage rates have spiked during the Federal Reserve’s historic inflation-curbing campaign — and while a good deal of progress has been made since June 2022, when inflation hit 9.1%, Fed officials say there is still a ways to go.

    The Fed’s preferred inflation measure, the core Personal Consumption Expenditures index, is currently 4.2%, which is more than double the Fed’s target of 2%. Economists expect it to drop to 3.9% when the latest reading is released on Friday.

    This week’s mortgage rate surge followed last week’s small move higher, as investors settled in for “higher-for-longer” interest rates after last week’s Fed policy meeting, said Danielle Hale, chief economist at Realtor.com.

    Hale said the takeaway from the meeting was that the upward adjustments from the Fed haven’t ended.

    “Revised economic projections show that another rate hike this year is definitely on the table, and the expected policy rate in 2024 and 2025 was also higher than previously forecast,” she said. “Market participants are still playing catchup.”

    While the Fed does not set the interest rates that borrowers pay on mortgages directly, its actions influence them.

    Mortgage rates tend to track the yield on 10-year US Treasuries, which move based on a combination of anticipation about the Fed’s actions, what the Fed actually does and investors’ reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.

    The yield on 10-year Treasuries rose from 4.3% on September 20 to 4.6% as of September 27.

    Mortgage applications continued to drop last week, according to the Mortgage Bankers Association, as mortgage rates went higher.

    “Rates over 7% and low for-sale inventory continue to create affordability challenges for prospective buyers,” said Bob Broeksmit, MBA president and CEO. “Until rates start to come back down, we anticipate housing market activity will remain slow.”

    Markets are experiencing an extraordinarily low number of homes for sale as homeowners stay put with ultra-low mortgage rates that are several percentage points lower than the current rate.

    There has been a small uptick in newly listed homes coming to market over the past few weeks, according to Realtor.com, which is seasonally atypical, said Hale.

    The first week in October tends to be an ideal week to buy a home, she said, since home prices tend to fall relative to summer highs, and fewer buyers contend for homes. Yet housing inventory remains higher than a typical week, Hale said.

    But, she added, mortgage rates will continue to be a wild card, which could make it impossible for some buyers to get in the market now.

    Even as demand is dropping, with so few homeowners selling, the market is pushing up prices as those few buyers who remain tussle over the handful of available houses, Hale said.

    This combination of higher prices and higher mortgage rates contrasts with easing rents over the past few months. This may cause would-be first-time buyers to wait for home prices and mortgage rates to stabilize and rent instead.

    “Buying a starter home is more expensive than renting in all but three major US markets [Realtor.com] studied,” said Hale, “which explains why buyer demand is likely to remain relatively low.”

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  • Dow tumbles by more than 400 points, on pace for biggest one-day decline since March | CNN Business

    Dow tumbles by more than 400 points, on pace for biggest one-day decline since March | CNN Business

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    New York
    CNN
     — 

    Stocks tumbled Tuesday after a slew of economic data stoked fears about the US economy’s cloudy outlook and further interest rate hikes from the Federal Reserve.

    The benchmark S&P 500 index slid 1.2%, on track for its lowest close since June. The Dow Jones Industrial Average fell 416 points, or 1.2%, on pace for its biggest one-day drop since March; and the Nasdaq Composite lost 1.5%.

    The S&P 500 is hovering around the threshold that it passed to enter bull market territory earlier this summer, which represents a climb of more than 20% off its most recent low last October.

    Housing data released Tuesday morning showed that new home sales fell 8.7% in August from July, as mortgage rates edged above 7% to the highest levels in decades.

    At the same time, US home prices climbed to a record high in July, marking the sixth straight month of increases as a tight supply of homes continues to drive up prices, according to the latest Case-Shiller home prices index.

    “The Fed will see the reacceleration of house prices as a reason to keep interest rates higher for longer,” said Bill Adams, chief economist at Comerica Bank. “The Fed cannot afford to look past house prices’ influence on the cost of living.”

    Investors have been on edge since the Fed last week indicated it could hike interest rates once more this year and delay rate cuts for longer than expected. That sent yields soaring to their highest level in decades, as investors recalibrate their expectations for how long rates will stay higher.

    Oil prices gained on Tuesday after paring back their recent gains earlier. West Texas Intermediate crude futures, the US benchmark, rose to roughly $90 a barrel. Brent crude, the international benchmark, climbed to $94 a barrel.

    JPMorgan Chase CEO Jamie Dimon said Tuesday in an interview with the Times of India that he is preparing the bank’s clients for a 7% interest rate scenario, further spooking investors.

    The possibility of a government shutdown also looms over Wall Street as the fiscal year’s end on September 30 fast approaches without any spending deal.

    Moody’s warned Monday that such an event could be negative for America’s credit rating, which already saw a downgrade from Fitch earlier this year after the federal government narrowly avoided breaching the debt ceiling.

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  • White House strategy on government funding meets serious test this week | CNN Politics

    White House strategy on government funding meets serious test this week | CNN Politics

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    CNN
     — 

    President Joe Biden and his top aides at the White House plan to hammer away at a blunt message as the US government inches closer to a shutdown this week: A handful of extremist Republicans are entirely to blame for the havoc that would be unleashed across the country.

    For Biden, there’s a lot riding on that message getting through to Americans.

    Biden’s advisers have been assessing for weeks how involved to get in lawmakers’ deliberations to fund the government ahead of the end-of-month deadline, and ultimately decided to take a hands-off approach. The expectation: Should the Republican-led House struggle to reach consensus, they would ultimately shoulder the blame for any disruption.

    “Watch the GOP struggle and force them to govern or be blamed for shutdown,” a Biden administration official said, summing up the strategy.

    The White House is planning to dispatch a number of Cabinet officials this week to help lay out the broad range of ramifications if the government were to shutdown – everything from flight delays to childcare centers shutting down.

    Agriculture Secretary Tom Vilsack will appear at Monday’s White House news briefing to discuss how a government shutdown could hit everything from food programs to loans for farmers, a White House official said.

    “This would stop us in our tracks,” Transportation Secretary Pete Buttigieg said on CNN on Sunday. “A shutdown that would mean service members wouldn’t get paid, coming back to transportation to air traffic controllers who would be working in the towers. They wouldn’t get paid.”

    Over the weekend, White House officials continued to monitor for any signs of movement on Capitol Hill to extend funding for the federal government ahead of the deadline. How to handle a possible shutdown was a key agenda item when White House chief of staff Jeff Zients huddled with senior advisers in the West Wing on Saturday, according to people familiar. But heading into a new work week, Republican members had not put anything realistic on the table, officials said, leaving the White House bracing for what is to come.

    In the days ahead, the president and his allies will repeatedly point to “who’s responsible” for the mess that could unfold, one senior administration official said simply.

    The White House took a similar approach this spring during the debt ceiling negotiations, but not without a seeming hit to Biden. In a CNN poll conducted mid-May, 59% of respondents said the president was not acting responsibly as talks stalled and the government careened toward default. The difference then: Republicans had coalesced around a specific position, passing a bill in the House that reflected their priorities and catching the White House off guard. Negotiations escalated in the weeks that followed, resulting in a deal that set broad guardrails around federal spending for the 2024 fiscal year.

    That deal was supposed to usher in months of in-depth appropriations work that would yield a full-year spending package and avert a government shutdown. Now, the White House says Republicans dropped the ball.

    Speaking over the weekend at the Congressional Black Caucus Foundation Phoenix Awards Dinner, Biden said it was “small group of extreme Republicans” that was refusing to “live up to the deal” that he had struck months ago with House Speaker Kevin McCarthy.

    “The president did his job,” White House press secretary Karine Jean-Pierre said when asked whether the White House would do anything to stave off a shutdown. “This is not something we can fix. The best plan is for House Republicans to stop their partisan political play and not do this to hurt Americans across the country. That’s the plan.”

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  • What happens if you don’t pay your student loans? | CNN Politics

    What happens if you don’t pay your student loans? | CNN Politics

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    Washington
    CNN
     — 

    Student loan payments are due in October for the first time in three-plus years – but for the next 12 months, borrowers will be able to skip payments without facing the harsh financial consequences of defaulting on their loans.

    The Biden administration is providing what it’s called an “on-ramp period” until September 30, 2024. During that time, a borrower won’t be reported as being in default to the national credit rating agencies, which can damage a person’s credit score.

    Think of it as a grace period for missed payments. But interest will still accrue, so borrowers aren’t off the hook entirely.

    Here’s what borrowers need to know:

    Any federal student loan borrower who was eligible for the pandemic-related payment pause, which took effect in March 2020, is eligible for the “on-ramp” period. That includes borrowers with federal Direct Loans, Federal Family Education Loans and Perkins Loans held by the Department of Education.

    Borrowers don’t need to apply for the benefit.

    Normally, a federal student loan becomes delinquent the first day after a payment is missed. Loan servicers will report the delinquency to the three national credit bureaus if a payment is not made within 90 days.

    A loan goes into default after a borrower fails to make a payment for at least 270 days, or about nine months, which can result in further financial consequences.

    A default can further damage your credit score, making it harder to buy a car or house. It could take years to establish good credit again. Borrowers could also see their federal tax refund or even a portion of their paycheck withheld.

    Once in default, the borrower can no longer receive deferment or forbearance and would lose eligibility for additional federal student aid. At that point, the loan holder can also take the borrower to court.

    Because the pandemic payment pause has ended, interest restarted accruing on September 1 after interest rates were effectively set to 0% for three-plus years.

    That means if a borrower misses a payment now, he or she could end up owing more debt over time due to interest.

    As interest builds up, a borrower’s loan servicer may also increase monthly payment amounts to ensure the debt is paid off on time. (This won’t happen to borrowers enrolled in income-driven plans, which calculate payments based on income and family size.)

    And unlike during the pause, a missed payment means that a borrower will miss out on a month’s worth of credit toward student loan forgiveness under certain repayment plans.

    For borrowers enrolled in the Public Service Loan Forgiveness program, for example, each month during the pause still counted toward the 120 monthly payments required to be eligible for debt forgiveness.

    Before missing a payment, it might be worth considering switching into an income-driven repayment plan that could lower monthly payments.

    A new income-driven repayment plan launched this summer, called SAVE (Saving on a Valuable Education), offers the most generous terms and will likely offer the smallest monthly payment for lower-income borrowers.

    Under SAVE, a single borrower earning $32,800 or less or a borrower with a family of four earning $67,500 or less will see their payments set at $0.

    Borrowers can apply for a new repayment plan whenever they want, for free, but should allow at least four weeks for the change to take effect.

    Borrowers who fell into default before the pandemic pause started in March 2020 can apply for the Department of Education’s “Fresh Start” program.

    If borrowers use Fresh Start to get out of default, their loans will automatically be transferred from the Department of Education’s Default Resolution Group to a loan servicer and returned to an “in repayment” status, and the default will be removed from their credit report.

    To claim these benefits, log in to myeddebt.ed.gov or call 800-621-3115. The process should take about 10 minutes, according to the Department of Education.

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  • The Fed has a perfect interest rate in mind. Here’s what it is | CNN Business

    The Fed has a perfect interest rate in mind. Here’s what it is | CNN Business

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    There’s a star the Federal Reserve is chasing.

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  • McCarthy privately outlines new GOP plan to avert shutdown, setting up clash with Senate | CNN Politics

    McCarthy privately outlines new GOP plan to avert shutdown, setting up clash with Senate | CNN Politics

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    CNN
     — 

    House Speaker Kevin McCarthy privately outlined to members a new GOP plan to keep the government open on Wednesday after a marathon two-and-a-half-hour GOP conference meeting.

    The California Republican later told reporters that Republican negotiators made “tremendous progress as an entire conference,” following days of GOP infighting and less than two weeks before a government funding deadline.

    “We are very close,” McCarthy said Wednesday evening when asked specifically what progress had been made on the GOP short-term bill. “I feel like just got a little more movement to go there,” he added of the new GOP plan. When asked specifically about the topline numbers, he wouldn’t get into details but said: “We’re in a good place.”

    The plan, as outlined by the speaker, would keep the government open for 30 days at $1.471 trillion spending levels, a commission to address the debt and a border security package. Separately, they also agreed to move year-long funding bills at a $1.526 trillion level. That level is below the bipartisan agreement that the speaker reached with the White House to raise the national debt limit.

    The levels are also far lower than what senators from both parties and the White House are willing to accept, meaning it’s unclear how such a deal would avert a government shutdown. With just 10 days left to fund the government, the new plan sets up a standoff with the Senate over how to keep the government open.

    As part of the deal, Republicans now believe they have the votes to move forward on the yearlong spending bill that five conservative hardliners scuttled just Tuesday.

    GOP Rep. Mike Garcia of California said after Wednesday evening’s conference meeting there is now “a little more clarity” on the path forward.

    “We have a little more clarity as to a potential plan moving forward,” Garcia said, adding, “We are still negotiating that final number and trying to figure out exactly what we can do.”

    Some of the people that were previously opposed now signaled they are supportive. Reps. Ralph Norman of South Carolina and Ken Buck of Colorado indicated they will flip to a yes on the rule and will vote to advance the Department of Defense bill Thursday after the speaker came down to the spending levels that Norman had been demanding.

    “Sounds like we’ve got the votes for the rule,” Garcia said, pointing to Buck and Norman as having committed to changing to a “Yes.”

    With McCarthy’s extremely thin margin in the chamber – and Democrats so far united against the GOP proposal – Republican leadership has been negotiating for days to try to win over enough GOP support to pass their legislation.

    When asked about struggling to make progress earlier Wednesday, McCarthy repeated his favorite line, insisting he will never back down from a challenge no matter how messy.

    “I wouldn’t quit the first time I went for the vote for speaker,” McCarthy said, a reference to how he was voted speaker only after 15 rounds and days of voting in January. “The one thing if you haven’t learned anything about me yet, I will never quit.”

    However, an additional potential complicating factor emerged Wednesday night with former President Donald Trump, the front-runner for the 2024 Republican nomination, coming out in opposition to a short-term funding bill as he called on lawmakers to defund the DOJ and the investigations into him.

    McCarthy and his GOP leadership team have been trying to sell the House Republican Conference on unifying behind a plan to fund the government, brokered between the House Freedom Caucus and the more moderate Main Street Caucus over the weekend. But that proposed legislation encountered immediate opposition from more than a dozen far-right Republican lawmakers who wanted deeper spending cuts attached.

    Amid that impasse with conservatives, moderates in the bipartisan House Problem Solver’s Caucus are close to finalizing their own framework on a short-term spending bill that would fund the government for several months at current levels and include Ukraine aid and disaster assistance, according to two sources. Even with Democratic support, that plan would still likely face major challenges – not the least of which is how it would get to the floor before the government runs out of money.

    There are already signs that this alternative plan could face its own strong headwinds – not just with Republicans but with Democrats. Rep. Pramila Jayapal, a progressive Democrat from Washington state, told CNN on “Inside Politics” that she wants a “clean” continuing resolution of funds, a sign that progressives may not back some of the border security provisions that the Problem Solvers Caucus members are eyeing.

    House Democratic leader Hakeem Jeffries met with the House Problem Solvers Caucus earlier Wednesday, and said afterward that they need a bipartisan agreement in line with what was already negotiated in the debt ceiling package.

    “We need to find a bipartisan agreement consistent with what was previously reached,” he said.

    House GOP leadership announced Wednesday night that the House will be in and voting on Friday and Saturday, making official what was expected as the majority struggled to reach an agreement all week.

    The House is expected to pass a rule for the defense appropriations bill Thursday. Assuming the rule passes, the House will then start consideration of the defense bill with final passage expected Friday.

    The thinking would then be to pass the new GOP stopgap plan on Saturday, which is expected to be a full day.

    Members were advised on Tuesday to keep their schedules flexible as weekend votes were possible. Members filtering in and out of Whip Emmer’s office the past two days are insistent that they are making progress, but Rep. Kelly Armstrong of North Dakota told CNN earlier Wednesday that while they are getting closer, they are not close yet.

    Rep. Garrett Graves from Louisiana, who has been in the room for negotiations, had echoed that schedule change and projected Friday and Saturday work.

    “I think we’re going to be here this weekend,” he said.

    When pressed on what exactly they’d be up to and if they’d be able to vote by Saturday, Graves said, “Well, we won’t be having Mardi Gras parties,” indicating they’d be voting.

    Rep. Steve Womack, a Republican from Arkansas who sits on the House Appropriations Committee, lambasted the hardliners, calling it a “breach of duty.”

    “We’ve got a handful of people that are holding the rest of the conference, the majority of our conference kind of held hostage right now and in turn, holding up America,” he told CNN.

    Womack also said this will likely extend into the weekend and that “either it’s gonna be good or it’s gonna be bad.”

    This story and headline have been updated with additional developments.

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  • Why some of Biden’s problems may be overblown at this time | CNN Politics

    Why some of Biden’s problems may be overblown at this time | CNN Politics

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    CNN
     — 

    President Joe Biden had a terrible, horrible, no good, very bad week. He’s under an impeachment inquiry, his son was indicted in Delaware, inflation seems to be tilting back up, the United Auto Workers went on strike after Biden said they wouldn’t, and the chattering class is talking about him not running for reelection.

    Some of these factors explain why my colleague Zach Wolf wrote that “Biden’s two worst weaknesses were exposed” this past week, and it’s also why I’ve written about the president’s difficulties heading into next year.

    But while Biden clearly has problems – no president with an approval rating hovering around 40% is in good shape – some of his issues appear to be overblown at this time. Here are three reasons why:

    A Washington Post op-ed by columnist David Ignatius that called on Biden not to run for reelection got a lot of play this past week.

    Putting aside whether Biden should or shouldn’t run, the fact is that he is running. A lot of people will point to polls (like those from CNN) showing that a majority of Democrats don’t think the party should renominate him.

    But these surveys only tell you so much. They’re matching Biden against himself and not anyone else. When asked in the CNN poll to name a preferred alternative to Biden, only a little more than 10% wanted someone else and could name a specific person.

    When matched up against the announced Democratic opposition (Robert F. Kennedy Jr. and Marianne Williamson), Biden is crushing it. He’s over 70%, on average, in recent polling.

    Moreover, Biden’s job approval rating with Democrats hovers around 80%. That is well above the level at which past incumbents have faced strong primary challenges. Those challenges (such as when Ted Kennedy challenged incumbent Jimmy Carter in 1980) came at a time when the president had an approval rating in the 50s or 60s among his own party members.

    It is worth analyzing whether the fact that a lot of Democrats don’t think Biden should be renominated masks a larger problem he could face in a general election.

    But Biden’s pulling in more than 90% of Democrats in Fox News and Quinnipiac University general election polling released this past week. In both polls, his share slightly exceeded former President Donald Trump’s among Republicans (though within the margin of error).

    The fact is Biden’s got problems, but worrying about renomination is not one of them.

    From a political point of view, Biden’s connections to his son Hunter have caused the president nothing but heartache. Most voters think Biden did something inappropriate related to his son’s business dealings.

    So, it might naturally follow that House Republicans’ impeachment inquiry into the president’s ties to his son’s foreign business deals would be harmful to his political future.

    About 40% of voters, on average, think Joe Biden did something illegal. Most voters don’t.

    Some Republicans are no doubt hoping that Biden’s own troubles will make their likely nominee (Trump), who is under four indictments, look less bad by comparison. A majority of voters, however, think that Trump committed a crime.

    The public doesn’t see the Biden and Trump cases the same way.

    A Wall Street Journal poll from the end of August found that a majority of Americans (52%) did not want Biden to be impeached.

    Republicans will have to prove their case in the court of public opinion.

    It’s conceivable that Republicans will overshoot the mark like they have in the past. The impeachment inquiry into Bill Clinton in 1998 preceded one of the best performances by a president’s party in a midterm election. Clinton’s Democratic Party picked up seats in the House, which has happened three times for the president’s party in midterms over the last century.

    To see how impeachment could turn things upside down for the GOP this cycle, consider independent voters. While the vast majority of independents disapprove of the job Biden is doing as president (64%) in our latest CNN poll, only 39% think he did something illegal.

    An election about a potentially unpopular impeachment would be better for Biden than one about an issue that really hurts him (such as voters seeing him as too old).

    Stop me if you heard this one before: Biden is the president heading into an election, voters are unhappy with the state of the economy, and his party does much better in the elections than a lot of people thought.

    That’s what happened in the 2022 midterms.

    The inflation rate is lower now than it was then, but it’s on the uptick. Voters, both now and then, overwhelmingly disapprove of Biden’s handling of the economy. They even say the economy matters more than any other issue, like they did in 2022.

    What none of this data takes into account is that Americans almost always call the economy the top issue, according to Gallup.

    Believe it or not, fewer Americans say the economy is the top problem facing the country now (31%) than they have in either the median (40%) or average (45%) presidential election since 1988.

    If you think about recent presidential elections in which the economy was the big issue (1992, 2008 and 2012), the state of the economy dominated the headlines.

    But as mentioned above, right now, there are a lot of other things going on in the country, as was also the case during the 2022 midterms.

    It’s not as if the economy is helping Biden. I’m just not sure it’s hurting him.

    After all, there’s a reason why Democrats have consistently outperformed the 2020 presidential baseline in special elections this year.

    If things were really that bad for Biden and the Democrats, they’d most likely be losing elections all over the country. That simply isn’t happening at this point.

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  • Americans are feeling gloomier about the economy | CNN Business

    Americans are feeling gloomier about the economy | CNN Business

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    Washington, DC
    CNN
     — 

    Americans aren’t feeling gloomy about higher gas prices just yet, but they’re still on edge about inflation and the economy’s direction — and concerns are starting to surface about the possibility of a government shutdown.

    Consumer sentiment tracked by the University of Michigan edged down in September from the prior month by 1.8 points, according to a preliminary reading released Friday.

    “Both short-run and long-run expectations for economic conditions improved modestly this month, though on net consumers remain relatively tentative about the trajectory of the economy,” said the University of Michigan’s Surveys of Consumers Director Joanne Hsu in a release. “So far, few consumers mentioned the potential federal government shutdown, but if the shutdown comes to bear, consumer views on the economy will likely slide, as was the case just a few months ago when the debt ceiling neared a breach.”

    Sentiment could start to sour soon, since gas prices are highly visible indicators of inflation. Sentiment fell to its lowest level on record last summer when gas prices topped $5 a gallon and inflation reached a four-decade high. The national average for regular gasoline stood at $3.87 a gallon on Friday, according to AAA, seven cents higher than a week ago and 17 cents higher than the same day last year.

    Consumers’ expectation of inflation rates in the year ahead fell to a 3.1% rate in September, down from 3.5% in the prior month.

    This story is developing and will be updated.

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  • US retail spending picked up in August, mostly due to sales at gas stations | CNN Business

    US retail spending picked up in August, mostly due to sales at gas stations | CNN Business

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    Washington, DC
    CNN
     — 

    US retail sales picked in August, boosted by higher gas prices, as spending on other items grew modestly.

    Retail sales, which are adjusted for seasonal swings but not inflation, rose 0.6% in August, the Commerce Department reported Thursday. That’s a slightly faster pace than July’s revised 0.5% gain, and marks the fifth straight month of growth. It’s also well above economists’ expectation of a 0.2% increase.

    The increase was largely driven by spending at gas stations, which advanced 5.2% last month. Spiking oil prices due to OPEC+ production cuts, strong demand and disruption from a deadly flood in Libya have pushed up prices at the pump. The national average for regular gasoline stood at $3.86 a gallon on Thursday, according to AAA, the highest level in 10 months.

    Excluding sales at gasoline stations, retail spending advanced a more modest 0.2% in August from July.

    Retail spending increased across most categories, including at restaurants and grocery stores. Sales of furniture and at specialty stores, such as those that sell sporting goods, fell 1% and 1.6% respectively. Online retail sales in August were flat, after jumping in July due to Amazon’s Prime Day promotional event.

    Despite 11 interest rate hikes from the Federal Reserve intended to cool demand, the US economy remains on strong footing, with American shoppers still doling out cash thanks to a strong job market.

    But after a summer of robust spending, US consumers are facing a number of economic challenges for the rest of the year, including student loan payments restarting and tougher lending standards, which could curb spending.

    “Fitch continues to view the consumer as relatively healthy, supported by low unemployment and somewhat declining goods inflation,” wrote David Silverman, senior director at Fitch Ratings, in an analyst note.

    However, he noted that “headwinds are emerging,” citing lower consumer savings and the resumption of student loan payments this fall.

    The US economy is widely expected to cool in the coming months, and since consumer spending accounts for about two-thirds of economic output, a weaker economy typically means softer spending. But economists don’t expect a recession this year. While Goldman Sachs recently reduced its bet of a US recession, the Wall Street bank still thinks there’s a 15% chance of an economic downturn.

    The job market is also expected to slow, which would include softer wage growth. That could prompt US consumers to pump the brakes on their spending.

    “Slowing labor market gains and softer disposable income growth in the coming months will likely mean ongoing consumer cautiousness. And it appears that consumers are already taking note,” wrote Lydia Boussour, senior economist at EY-Parthenon, in a note.

    However, if inflation slows in the months ahead, that could actually maintain economic activity, since it means consumers have regained some spending power.

    “Encouragingly, falling inflation should continue to provide a tailwind to real wages and avoid a retrenchment in consumer activity,” Boussour added.

    The Consumer Price Index rose 3.7% in August from a year earlier, up from July’s 3.2% rise, largely due to higher gas prices. Economists still expect inflation to cool later in the year, despite volatile energy markets. But gasoline prices are highly visible indicators of inflation, so more pain at the pump could also dampen consumers’ attitudes.

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  • China relaxes mortgage rules to help homebuyers in latest stimulus push | CNN Business

    China relaxes mortgage rules to help homebuyers in latest stimulus push | CNN Business

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    Hong Kong
    CNN
     — 

    China just made it easier for people to buy homes, in a move that could affect $3.5 trillion in mortgage loans as Beijing seeks to bail out a property market mired in a record slump and worsening cash crunch.

    Down payments will be set at a minimum of 20% for first-time buyers and a minimum of 30% for second-time buyers nationwide, according to a joint statement by the People’s Bank of China (PBOC) and the National Administration of Financial Regulation (NAFR) released late Thursday.

    That’s a big cut from the existing requirements of minimums of 30% and 40% for first-time and second-time buyers in cities that implement home-buying restrictions, such as Beijing and Shanghai.

    In addition, minimum mortgage rates for buyers of second homes should be no less than 20 basis points over the loan prime rate (LPR), the statement said. Currently, minimum mortgage rates for second-time buyers are no less than 60 basis points over the LPR.

    The LPR is the benchmark for most household and corporate loans in China and is set by the central bank each month.

    The regulators also indicated in a separate statement that rates on existing mortgages for first-home purchases can be renegotiated between banks and customers starting September 25. The regulators have encouraged banks to offer lower rates.

    “The drop in the interest rates of existing housing loans can save interest expenses for borrowers, which is conducive to expanding consumption and investment,” the regulators said.

    “For banks, it can effectively reduce the phenomenon of early loan repayment and mitigate the impact on banks’ interest income,” they added.

    The new policy measures could affect 40 million home buyers and impact 25 trillion yuan ($3.5 trillion) in mortgages, which is about two thirds of the country’s housing loans, state-owned Yicai reported on Thursday, citing people close to the regulators.

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  • Dollar General shares tumble after it cuts forecasts, blaming a spending slump and theft | CNN Business

    Dollar General shares tumble after it cuts forecasts, blaming a spending slump and theft | CNN Business

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    New York
    CNN
     — 

    Dollar General slashed its sales and profit outlook for the year on Thursday, blaming headwinds including weaker consumer spending on non-essential purchases and increasing theft.

    Dollar General shares tumbled nearly 17% in pre-market trading Thursday.

    The discount store’s challenges are yet another sign of American consumers pulling back on shopping as inflation remains well above the Federal Reserve’s 2% target.

    “One of the key reasons for this is because Dollar General’s core customers are feeling the acute pressure of the cost-of-living-crisis,” Neil Saunders, retail analyst and managing director at GlobalData, said in a report Thursday.

    “This has been exacerbated by cuts in SNAP payments as temporary pandemic benefits came to an end. As a result, lower-income shoppers are cutting back on non-consumable and indulgent purchases from the chain in a bid to save money,” he said. “Unfortunately, this dynamic will not change any time soon as, if anything, finances will tighten over the second half of the year.”

    The discount retailer now expects sales for the full year to rise between 1.3% to 3.3%, down from its previous forecast of a 3.5% to 5% increase. It expects full-year earnings to decline 22% to 34% from its previous estimate of a flat-to-8% decrease.

    The retailer said its same-store sales (or sales at stores open at least a year) are expected to range from a decline of about 1% to an increase of 1% for the year, compared to its previous expectation of a 1% to 2%. increase.

    For its second quarter, Dollar General logged a 1% drop in its same-store sales. It said weaker customer traffic to its stores hurt sales in the period, combined with budget-conscious shoppers pulling back on higher-priced discretionary purchases such as home items and clothing in favor of lower-priced everyday necessities.

    The Consumer Price Index rose 3.2% for the year through July, adding pressure on shoppers looking for bargains.

    In addition, food stamp recipients started to receive about $90 a month less in benefits, on average, starting in March, as a pandemic hunger relief program comes to an end nationwide three years after Congress approved it.

    Meanwhile, close on the heels of Dick’s Sporting Goods sounding the alarm on store theft eating into its profit this year, Dollar General also flagged an increase in product theft, among other factors, hurting its profit.

    The company said “an increase in expected inventory shrink for the second half of 2023” factored into its lower guidance. Shrink is an industry term encompassing inventory losses caused by external theft, including organized retail crime, employee theft, human errors, vendor fraud, damaged or mismarked items and other losses.

    Retailers large and small say they are struggling to contain an escalation in store crimes — from petty shoplifting to organized sprees of large-scale theft that clear entire shelves of products. Target warned earlier this year that it was bracing to lose half a billion dollars because of rising theft. It reported a large number of incidents of shoplifting and organized retail crime in its stores nationwide.

    At the same time, it’s not clear that store crime is growing significantly more serious. Within the industry, at least one major player has argued that the problem is being overhyped.

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