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As more U.S. homeowners struggle to keep up with mortgage payments and maintenance costs, new data shows the number of property foreclosures is steadily rising. CBS News contributor Javier David has more.
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Tag: Inflation
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Federal Reserve officials remain cautious on future rate cuts
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Federal Reserve officials remain cautious about future interest rate cuts, with an account from the central bank’s meeting in September underscoring the division among central bank officials over the best path for monetary policy.
While some officials think the Fed’s benchmark rate is too high and weighing on the economy, others point to persistent inflation that remains above the central bank’s 2% target as evidence of the need need to show caution in lowering borrowing costs.
Most members of the Fed’s rate-setting committee supported further reductions to its key interest rate this year, according to minutes from last month’s meeting released on Wednesday.
A majority of Fed officials perceived growing risks to the job market since their previous meeting in July, while the threat of rising inflation “had either diminished or not increased,” according to the minutes. As a result, the central bank decided at its Sept. 16-17 meeting to reduce its key rate by a quarter of a percentage point, its first cut since December of 2024.
“The overall message appears to be that, although most participants are on board with further cuts, it probably won’t take much for the FOMC to take a slower approach than it indicated last month,” Stephen Brown, deputy chief North America economist at Capital Economics, said in a research note. “We still see scope for the Fed to skip its projected cut in December, based on our view that the economy and labor market will outperform current downbeat expectations.”
Fed rate cuts often gradually lead to lower borrowing costs for mortgages, auto loans, credit cards and business loans, encouraging more spending and hiring.
Only one official formally dissented from the quarter-point cut — Stephen Miran, who was appointed by President Trump and was approved by the Senate just hours before the meeting began. He supported a larger, half-point cut instead.
But the minutes also noted that “a few” policymakers said they could have supported keeping rates unchanged, or said that “there was merit” in such a step.
The differences help explain Chair Jerome Powell’s statements during the news conference that followed the meeting: “There are no risk-free paths now. It’s not incredibly obvious what to do.”
Miran said in remarks Tuesday that he thinks inflation will steadily decline back toward the Fed’s 2% target, and as a result he doesn’t think the Fed’s rate needs to be nearly as high as it is. Rental costs around the U.S. are steadily falling and will bring down inflation, he predicted, while higher tariff revenues will reduce the government’s budget deficit and reduce longer-term interest rates, giving the Fed more room to cut.
Yet ther Fed officials remain concerned about stubbornly high inflation, the minutes showed. Jeffrey Schmid, president of the Federal Reserve’s Kansas City branch, said in a speech Monday that “inflation is too high” and argued that the Fed should keep rates high enough to cool demand and prevent inflation from worsening.
“Looking ahead, most participants indicated that additional policy easing would likely be appropriate later this year, provided inflation continued to trend lower and labor market risks persisted,” EY-Parthenon Chief Economist Gregory Daco said in a research note assessing the latest Fed minutes. “However, views diverged, with some participants noting that financial conditions were not particularly tight and warning against over-correcting.”
Austan Goolsbee, president of the Fed’s Chicago branch, said in an interview Friday with The Associated Press that he supported a cautious approach toward further lowering rates, and wanted to see evidence that inflation would cool further.
“I am a little uneasy with front-loading rate cuts, presuming that those upticks in inflation will just go away,” he said.
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Fed minutes: Most officials supported further rate cuts as worries about jobs rose
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WASHINGTON — WASHINGTON (AP) — Most members of the Federal Reserve’s interest-rate setting committee supported further reductions to its key interest rate this year, according to minutes from last month’s meeting released Wednesday.
A majority of Fed officials felt that the risk unemployment would rise had worsened since their previous meeting in July, while the risk of rising inflation “had either diminished or not increased,” the minutes said. As a result, the central bank decided at its Sept. 16-17 meeting to reduce its key rate by a quarter-point to about 4.1%, its first cut this year.
Rate cuts by the Fed can gradually lower borrowing costs for things like mortgages, auto loans, and business loans, encouraging more spending and hiring.
Still, the minutes underscored the deep division on the 19-person committee between those who feel that the Fed’s short-term rate is too high and weighing on the economy, and those who point to persistent inflation that remains above the central bank’s 2% target as evidence that the Fed needs to be cautious about reducing rates.
Only one official formally dissented from the quarter-point cut: Stephen Miran, who was appointed by President Donald Trump and was approved by the Senate just hours before the meeting began. He supported a larger, half-point cut instead.
But the minutes noted that “a few” policymakers said they could have supported keeping rates unchanged, or said that “there was merit” in such a step.
The differences help explain Chair Jerome Powell’s statements during the news conference that followed the meeting: “There are no risk-free paths now. It’s not incredibly obvious what to do.”
Miran said in remarks Tuesday that he thinks inflation will steadily decline back toward the Fed’s 2% target, despite Trump’s tariffs, and as a result he doesn’t think the Fed’s rate needs to be nearly as high as it is. Rental costs are steadily declining and will bring down inflation, he said, while tariff revenue will reduce the government’s budget deficit and reduce longer-term interest rates, which gives the Fed more room to cut.
Yet many other Fed officials remain concerned about stubbornly high inflation, the minutes showed. Jeffrey Schmid, president of the Federal Reserve’s Kansas City branch, said in a speech Monday that “inflation is too high” and argued that the Fed should keep rates high enough to cool demand and prevent inflation from worsening.
And Austan Goolsbee, president of the Fed’s Chicago branch, said in an interview Friday with The Associated Press that he supported a cautious approach toward more cuts, and wanted to see evidence that inflation would cool further.
“I am a little uneasy with front loading rate cuts, presuming that those upticks in inflation will just go away,” he said.
The minutes provide insight into how the Fed’s policymakers were thinking last month about inflation, interest rates, and hiring. Since then, however, the federal government shutdown has cut off the flow of economic data that the Fed relies on to inform its decisions. The September jobs report wasn’t issued as scheduled last Friday, and if the shutdown continues, it could also delay the release of the inflation report set for next Wednesday.
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Personal bankruptcy filings soar amid ‘mounting financial pressure’
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The number of individuals filing for bankruptcy has soared in 2025, reflecting growing financial pressures and pessimism among Americans about their economic security.
According to a report from the American Bankruptcy Institute, based on figures from data and analytics platform Epiq AACER, there were 249,152 individual chapter 7 bankruptcy filings—the most common type of personal bankruptcy—during the first nine months of 2025. This represents a 15 percent increase over the 216,773 filed in the same period last year.
Why It Matters
Epiq AACER linked the rise to the “mounting financial pressure” faced by Americans in 2025, reflected in rising household debt levels as well as surveys which show growing pessimism among consumers about their personal economic security.
Americans have this year grappled with elevated inflation, as well as a deterioration of the job market and a broader weakening of the nation’s economic outlook.
What To Know
On top of the chapter 7 filings, total bankruptcy filings rose 10 percent to 423,053 year-over-year, with total individual filings seeing an 11 percent jump to 399,387. Individual chapter 13 filings—allowing debt reorganization for those with a steady income—were up 4.3 percent to 149,337.
The figures are broadly in line with those released earlier this year by the Administrative Office of the U.S. Courts, which showed that nonbusiness filings rose 11.8 percent in the 12-month period which ended June 30 compared with the previous year.
Sara Greene, a professor at the Duke University School of Law, told Newsweek that this upward trend is “not particularly surprising,” and reflects the fact that “the margin of safety for many Americans has shrunk.”
Greene pointed to a “confluence of pressures” that are pushing more households toward filing, including higher interest rates and debt-servicing burdens, growing debt levels driven by the rising cost of everything from groceries to health care, and the rollback of many COVID-era “rainy-day” measures such as the pause in student loan collections and expanded child tax credits.
“If there is labor market softness or further wage stagnation for low and middle income workers, this will make it difficult for households to weather even modest shocks, potentially leading to further increases in bankruptcy numbers,” she added. “And, if we see even further erosion of the public safety net, which it seems that we may, many more people may turn to credit/debt and overextend themselves, ultimately leading more to reach tipping points and having to file.”
The report coincides with further signs of waning financial confidence among American consumers. According to the latest RealClearMarkets/TIPP Economic Optimism Index, released on Tuesday, economic sentiment fell to 48.3 in October from 48.7 in September—the lowest reading since May and a further drop below the 50-point threshold signaling persistent pessimism.
Tuesday also saw the release of the New York Fed’s latest consumer outlook survey, which showed that fewer consumers anticipate being better off a year from now, and that year-ahead inflation expectations rose to 3.4 percent in September from 3.2 percent in August.
What People Are Saying
Michael Hunter, vice president of Epiq AACER, said: “The sharp rise in individual bankruptcy filings this September compared to 2024 highlights the mounting financial pressure on households across the country. Chapter 7 filings surged 19 percent year-over-year, and the growth in active Chapter 13 case inventory suggests more consumers are turning to bankruptcy as a necessary financial reset.”
Legal scholar Sara Greene told Newsweek: “I think this trend will continue if interest rates remain high (or go higher), as debt servicing burdens will continue to weigh on vulnerable households. Further, we haven’t seen enough inflation relief, and if these pressures related to inflation continue (particularly for food, rent, energy, etc.), I think we will see this bankruptcy trend continue.”
ABI Executive Director Amy Quackenboss said: “With household debts climbing, lending terms tightening and geopolitical uncertainty creating challenges within supply chains, bankruptcies continue their ascent toward pre-pandemic levels. Families or businesses overwhelmed by growing debt loads have a financial lifeline through the bankruptcy process.”
What Happens Next?
According to Epiq AACER’s vice president, the trend of rising personal bankruptcies is expected to continue through the remainder of the year “with a strong likelihood of accelerating into 2026.”
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Government shutdown threatens to stall the recovery in the IPO market
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NEW YORK — NEW YORK (AP) — The U.S. government shutdown is waving a caution flag at private companies racing to make the move to the public market.
The market for initial public offerings has been on a years-long recovery after spiking inflation slammed the brakes on activity in 2022. The IPO market is already on track for its best year since 2021 with 163 deals and $31 billion in proceeds raised so far, according to Renaissance Capital.
Companies rely on the U.S. government, through the Securities and Exchange Commission, to review and approve IPO filings, while monitoring the ongoing process. The SEC is now operating with minimal staff, significantly delaying or halting those reviews and approvals.
Investors and companies are dealing with more than just technical issues. A prolonged government shutdown could sap confidence in the U.S. markets and economy. IPO activity typically remains strong through October, then slows in the U.S. during the final two months of the year.
“That’s always an end of the year factor,” said Samuel Kerr, head of global equity capital markets at Mergermarket.
Investors and companies had been mostly brushing off much of the uncertainty roiling the U.S. government and economy through the year, including an unpredictable trade policy, ongoing worries about inflation, a weakening job market and questions about Federal Reserve policy. Amid all that, the stock market has notched record after record and new companies keep joining the ranks.
The impasse in Washington, though, has brought a reminder of the challenges facing the market.
“It (the shutdown) reminds you that we’re not operating in normal times,” Kerr said.
Investors have been drawn to IPOs because stocks have looked pricey for a while, especially in the technology sector, leaving them looking for other ways to get into the market. IPOs have offered a way to do that. Many of the bigger IPOs in 2025 have been in growing technology fields, including cryptocurrency technology and artificial intelligence.
Circle Internet Group, the U.S.-based issuer of one of the most popular cryptocurrencies made its public debut in June for about $1.1 billion.
Circle issues USDC, a stablecoin that can be traded at a 1-to-1 ratio for U.S. dollars, and EURC, which can similarly be traded for euros. It’s shares priced at $31, soared on the first day of trading and currently trade for around $152.
Cryptocurrency exchange Bullish raised about $1.1 billion in August. Cloud-computing company CoreWeave raised about $1.5 billion when it went public in March.
Klarna, the Swedish buy now, pay later company, entered the public market in September, raising $1.37 billion. That made it the largest IPO of the year, according to Renaissance Capital. The IPO priced at $40 and shares currently trade around $42.
Outside of the shutdown, market conditions remain ideal, said Bill Smith, CEO of Renaissance Capital, in a note to investors.
“The IPO market still has a bit of gas in the tank,” he said.
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Why your morning coffee is costing more these days – MoneySense
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Dry weather and production woes continue to brew higher coffee costs
Coffee prices have remained high amid concerns of dry weather in Brazil, a major coffee-producing country. That’s making your daily cup of coffee more expensive, whether you’re brewing it at home or buying a coffee at a café. Statistics Canada data shows Canadians paid 27.9% more for their coffee at a grocery store in August compared with a year earlier.
Robert Carter, president of the Coffee Association of Canada, said the surge in coffee prices is a continuation of what roasters and cafés saw last year. “The commodity side is still fluctuating, and the production side, we’re still seeing limited production challenges out of various countries such as Colombia and Brazil,” he said.
Carter said cafés and coffee bean roasters were already struggling with rising operational costs, such as with packaging and labour, and now coffee bean prices are adding to their challenges. “The cost of goods, which coffee would fall into, has definitely seen an increase … within the double digits,” he said.
Tariffs and supply pressures squeeze smaller coffee roasters
Coffee prices are also seeing added price pressures from tariffs, even as Canada dropped its counter-tariffs in September.
Von Massow suspects price fluctuations are likely hurting smaller roasters in Canada more than larger players who buy directly from producers. Small-scale coffee roasters typically buy coffee beans from brokers who aggregate supply from farmers and coffee-producing countries. “The smaller roasters are going to get squeezed, everyone gets squeezed, as costs go up because we as consumers are resistant to price increases and they don’t want to see volume go down,” he said.
Von Massow said it will be more difficult for smaller roasters to pass down costs to their customers. “They’ve always differentiated not on price, but on product,” he said of smaller roasters. “But the greater the price disparity is, the less their demand will be.”
However, some costs will be mitigated for these roasters as the impact of counter-tariffs start to wear off, von Massow said. Meanwhile, other costs are likely to be passed on to customers. “We’re seeing big companies start to announce some price increases as the shortages become more sustained,” he said.
Coffee chain Tim Hortons said it will increase the price of its coffee by an average of three cents per cup. “This is the first time in about three years that we’ve adjusted the price of coffee,” said Michael Oliveira, director of communications at Tim Hortons, in an email. “This is significantly below inflation and reflects our commitment to great value and everyday low prices for our guests.”
The coffee market’s roller-coaster ride isn’t over yet
Speculation on coffee futures—a way of measuring commodity prices based on contracts for future delivery in a publicly-traded market—have also amplified price pressures. “The coffee market has been on a roller-coaster for the past year,” said Adam Pesce, president of Oakville, Ont.-headquartered Reunion Coffee Roasters, which sells wholesale and also runs a retail café in Toronto.
Reunion has had to increase prices over the past several months to match its rising costs, said Pesce. He said market speculators have been active and making a lot of money by holding a longer position on the commodity. Meanwhile, coffee roasters are buying as little as possible, hoping prices might come down. It has been “a very exhausting, very time-consuming year of watching the market,” compared with previous years when markets were more stable and less erratic, Pesce said.
Von Massow said coffee prices will continue to reflect the climate impacts of an individual year—with some annual yields better than others. “One thing that we can say definitively is that there’s going to be more variability in prices going forward,” he said.
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The Canadian Press
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Report: Slips in employer optimism tied to Trump tariffs
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BOSTON — The state’s economy may be on solid footing but employers are becoming increasingly pessimistic about the impact of President Donald Trump’s tariffs on their bottom lines, according to a new report.
The latest Business Confidence Index, which is compiled by the pro-business group Associated Industries of Massachusetts, shows overall enthusiasm among employers “grew darker” after slipping 1.4 points to 47.5 on a 100-point scale in September.
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By Christian M. Wade | Statehouse Reporter
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The Gen Z hiring nightmare is real, but AI is a ‘lightning strike’ not a ‘house fire,’ Yale economist says | Fortune
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Especially alarming to many has been AI’s effect on entry-level jobs. A blockbuster Stanford study in August was especially rattling, as it claimed to find a “significant and disproportionate impact” on entry-level jobs most exposed to AI automation—like software development and customer service—have seen steep relative declines in employment. This came out close to the MIT study that said 95% of generative AI pilots were failing and the somewhat sudden realization that AI could be building toward a bubble. Even Federal Reserve Chair Jerome Powell sees something going on, commenting that “kids coming out of college and younger people, minorities, are having a hard time finding jobs.”
But according to a new study from Yale and Brookings researchers, these instances are “lightning strikes,” as opposed to “house fires,”. The U.S. labor market just isn’t showing any signs of broad, AI-driven disruption, at least not yet.
Martha Gimbel, a Yale economist and the paper’s lead author, hopes that understanding this data helps people to relax. “Take a step back. Take a deep breath,” Martha Gimbel, a Yale economist and the paper’s lead author, told Fortune. “Try to respond to AI with data, not emotion.”
No apocalypse yet
The new study examined multiple measures of labor market disruption, drawing on Bureau of Labor Statistics (BLS) data on job losses, spells of unemployment, and shifts in broader occupational composition. The conclusion: there’s movement, but nothing out of the ordinary.
While the mix of occupations has shifted slightly in the past years, the authors stress that this change is still well within historical norms. Right now, the forces driving those shifts appear to be macroeconomic rather than technological.
“The biggest forces hitting the labor market right now are a slowing economy, an aging population, and a decline in immigration—not AI,” Gimbel said.
It’s easy to conflate noise in the economy with the impact of AI, particularly for younger workers, who may already be feeling the pinch from a cooling job market. But Gimbel stressed that these effects are “very specific impacts in very targeted populations,” but there aren’t any broad impacts of AI for young workers, which are more consistent with a macroeconomic slowdown.
Economists — including Fed Chair Jerome Powell — have described the current labor market conditions as a “low hire, low-fire” environment, where layoffs are rare, but so are new opportunities. Recent college graduates have been taking the hit: they are struggling to find entry-level roles in white-collar sectors like tech and professional services, and the youth unemployment rate has climbed to 10.5%, the highest since 2016. But the effect has hit older workers, too, more than a quarter of unemployed Americans have been out of work for over six months, the highest since the mid-2010s outside of the pandemic years.
Exposure to AI does not mean job loss
It’s not surprising, then, that many workers assume AI must already be responsible. But Gimbel argues one of the biggest misconceptions is conflating exposure to AI with displacement. Radiologists illustrate the point. Once seen as automation’s prime victims, they are more numerous and better paid than ever, even as their workflows rely heavily on AI-powered imaging tools.
“Exposure to AI doesn’t mean your job disappears,” she said. “It might mean your work changes.”
The same applies to coders and writers, who dominate AI adoption rates on platforms like Claude, the researchers found. Using the tools doesn’t automatically train away your livelihood—it could simply reshape how the work is done.
Molly Kinder, Gimbel’s co-author at Brookings, added another layer: geography. Americans are used to thinking about automation as something that devastates factory towns in the heartland. With generative AI, Kinder said, the geography is flipped.
“This is not your grandparents’ automation,” Kinder told Fortune. “GenAI is more likely to disrupt—positively or negatively—big cities with clusters of knowledge and tech jobs, not the industrial heartland.”
In her view, cities like San Francisco, Boston, and New York, dense with coders, analysts, researchers, and creatives, are far more exposed to generative AI than smaller towns. But whether that exposure turns into devastation or growth depends on the future.
“If humans remain in the loop, those cities could reap the most benefits,” Kinder said. “If not, they’ll feel the worst pain.”
The key, she emphasizes, is that exposure doesn’t tell us whether jobs will actually be eliminated, rather, it only tells us which tasks could change. The real story will depend on whether companies treat AI as a helper or as a replacement.
Lightning strikes, not a house fire
Kinder, like Gibbel, stressed that diffusion takes time. Even as AI systems improve quickly, most organizations haven’t redesigned their workflows around them.
“Even though it feels like AI is getting so good, turning that into change in the workplace is time-consuming,” she said. “It’s messy. It’s uneven.”
That’s why the Yale-Brookings analysis is deliberately broad. “It can tell if the house is on fire,” Kinder explained. “It can’t pick up a stove fire in the kitchen. And right now, the labor market as a house is not on fire.”
That doesn’t mean there’s nothing to see here, however.
Kinder called today’s changes, like the ones the Stanford study picked up, “lightning strikes” in specific industries like software development, customer service, and creative work. These early jolts serve as canaries in the coal mine. But they haven’t aggregated into the kind of disruption that reshapes official job statistics.
“Our paper does not say there’s been no impact,” she said. “A translator might be out of work, a creative might be struggling, a customer service rep might be displaced. Those are real. But it’s not big enough to add up to the economy-wide apocalypse people imagine.”
Both Kinder and Gimbel said they expect the first clear, systemic effects to take years, not months, to appear.
What comes next
If and when real displacement arrives, both authors believe it will come from embedded AI in enterprise workflows, not from individual workers casually using chatbots.
“That’s when you’ll see displacement,” Kinder said. “Not when one worker turns to a chatbot, but when the business redesigns the workflow with AI.”
That process is beginning, as more companies integrate AI APIs into core systems. But organizational change is slow.
“Three years is nothing for a general-purpose technology,” Kinder said. “GenAI has not defied gravity. It takes time to redesign workflows, and it takes time to diffuse across workplaces. It could end up being phenomenally transformative, but it’s not happening overnight.”
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Eva Roytburg
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How the government shutdown disrupts critical economic data
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The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.For the time being, the Fed, economists, and investors will likely focus more on private data.On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.
NEW YORK —The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy.
The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed.
If the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.
The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.
“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.”
The Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available.
A key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day.
“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.
The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.
A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%.
On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money.
So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high.
Many businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces.
For the time being, the Fed, economists, and investors will likely focus more on private data.
On Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics.
The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.
“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.
The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17.
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Anti-Foreigner Sentiments and Politicians Are on the Rise as Japan Faces a Population Crisis
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TOKYO (AP) — Outside a train station near Tokyo, hundreds of people cheer as Sohei Kamiya, head of the surging nationalist party Sanseito, criticizes Japan’s rapidly growing foreign population.
As opponents, separated by uniformed police and bodyguards, accuse him of racism, Kamiya shouts back, saying he is only talking common sense.
“Many Japanese are frustrated by these problems, though we are too reserved to speak out. Mr. Kamiya is spelling them all out for us,” said Kenzo Hagiya, a retiree in the audience who said the “foreigner problem” is one of his biggest concerns.
The populist surge comes as Japan, a traditionally insular nation that values conformity and uniformity, sees a record surge of foreigners needed to bolster its shrinking workforce.
In September, angry protests fueled by social media misinformation about a looming flood of African immigrants quashed a government-led exchange program between four Japanese municipalities and African nations.
Even the governing party, which has promoted foreign labor and tourism, now calls for tighter restrictions on foreigners, but without showing how Japan, which has one of the world’s fastest-aging and fastest-dwindling populations, can economically stay afloat without them.
Kamiya says his platform has nothing to do with racism
“We only want to protect the peaceful lives and public safety of the Japanese,” he said at the rally in Yokohama, a major residential area for foreigners. Japanese people tolerate foreigners who respect the “Japanese way,” but those who cling to their own customs are not accepted because they intimidate, cause stress and anger the Japanese, he said.
Kamiya said the government was allowing foreign workers into the country only to benefit big Japanese businesses.
“Why do foreigners come first when the Japanese are struggling to make ends meet and suffering from fear?” Kamiya asked. “We are just saying the obvious in an obvious way. Attacking us for racial discrimination is wrong.”
Kamiya’s anti-immigrant message is gaining traction
All five candidates competing in Saturday’s governing Liberal Democratic Party leadership vote to replace outgoing Shigeru Ishiba as prime minister are vowing tougher measures on foreigners.
One of the favorites, former Economic Security Minister Sanae Takaichi, a hardline ultra-conservative, was criticized for championing unconfirmed claims that foreign tourists abused deer at a park in Nara, her hometown.
Takaichi later said she wanted to convey the growing sense of anxiety and anger among many Japanese about ”outrageous” foreigners.
During the July election campaign, far-right candidates insulted Japan’s about 2,000 Kurds, many of whom fled persecution in Turkey.
A Kurdish citizen, who escaped to Japan as a child after his father faced arrest for complaining about military hazing, said he and his fellow Kurds have had to deal with people calling them criminals on social media.
Japan has a history of discrimination against ethnic Koreans and Chinese, dating from the colonialist era in the first half of the 20th century.
Some of that discrimination persists today, with insults and attacks targeting Chinese immigrants, investors and their businesses.
Hoang Vinh Tien, 44, a Vietnamese resident who has lived in Japan for more than 20 years, says foreigners are often underpaid and face discrimination, including in renting apartments. He says he has worked hard to be accepted as part of the community.
“As we hear about trouble involving foreigners, I share the concerns of the Japanese people who want to protect Japan, and I support stricter measures for anyone from any country, including Vietnam,” Hoang said.
Rising foreigner numbers, but not nearly enough to bolster the economy
Japan’s foreign population last year hit a new high of more than 3.7 million. That’s only about 3% of the country’s population. Japan, which also promotes inbound tourism, aims to receive 60 million visitors in 2030, up from 50 million last year.
The foreign workforce tripled over the past decade to a record 2.3 million last year, according to Ministry of Health, Labor and Welfare statistics. An increase of 300,000 from a year earlier was twice the projected pace. Many work in manufacturing, retail, farming and fishing.
Even as the foreign population surged, only about 12,000 foreigners were arrested last year, despite alarmists’ claims that there would be a crimewave, National Police Agency figures show.
The pro-business ruling Liberal Democratic Party in 1993 launched a foreign trainee program and has since drastically expanded its scope in phases. But the program has been criticized as an exploitive attempt to make up for a declining domestic workforce. It will be renewed in 2027 with more flexibility for workers and stricter oversight for employers.
Many Japanese view immigrants as cheap labor who speak little Japanese, allow their children to drop out of school and live in high-crime communities, says Toshihiro Menju, a professor at Kansai University of International Studies and an expert on immigration policies.
He says the prejudice stems from Japan’s “stealth immigration system” that accepts foreign labor as de facto immigrants but without providing adequate support for them or an explanation to the public to help foster acceptance.
A Sanseito supporter in her 50s echoed some of these views but acknowledged that she has never personally encountered trouble with foreigners.
Meanwhile, Japan faces real economic pain if it doesn’t figure out the immigration issue.
The nation will need three times more foreign workers, or a total of 6.7 million people, than it currently allows, by 2040 to achieve 1.24% annual growth, according to a 2022 Japan International Cooperation Agency study. Without these workers, the Japanese economy, including the farming, fishing and service sectors, will become paralyzed, experts say.
It is unclear whether Japan can attract that many foreign workers in the future, as its dwindling salaries and lack of diversity makes it less attractive.
A growing party that’s part of a changing political landscape
Sanseito started in 2020 when Kamiya began attracting people on YouTube and social media who were discontent with conventional parties.
Kamiya, a former assembly member in the town of Suita, near Osaka, focused on revisionist views of Japan’s modern history, conspiracy theories, anti-vaccine ideas and spiritualism.
Kamiya said he’s “extremely inspired by the anti-globalism policies” of U.S. President Donald Trump, but not his style. He invited a conservative activist and Trump ally Charlie Kirk to Tokyo for talks days before his assassinationhas been also connecting with far-right parties such as the Alternative for Germany party (AfD) and Britain’s Reform UK.
His priority, he said in an interview with The Associated Press, is to further expand his support base, and he hopes to field more than 100 candidates in future elections.
Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Photos You Should See – Sept. 2025
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Associated Press
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US Consumer Confidence Declines Again as Americans Fret Over Prices, Job Market
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WASHINGTON (AP) — U.S. consumer confidence declines again in September as Americans’ pessimism over a inflation and weakening job market grew again.
The Conference Board said Tuesday that its consumer confidence index fell by 3.6 points to 94.2 in September, down from August’s 97.8. That’s a bigger drop than analysts were expecting and the lowest reading since April, when President Donald Trump rolled out his sweeping tariff policy.
A measure of Americans’ short-term expectations for their income, business conditions and the job market fell to 73.4, remaining well below 80, the marker that can signal a recession ahead.
Consumers’ assessments of their current economic situation dipped by 7 points to 125.4.
Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Photos You Should See – Sept. 2025
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Asian shares trade mostly higher after Wall Street snaps its 3-day losing streak
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Shares were mostly higher Monday in Asia after Wall Street broke its three-day losing streak, trimming its losses for last week.
China factory data are due out on Tuesday and a quarterly business sentiment survey by the Bank of Japan comes on Wednesday.
The next big event for Wall Street could be a looming shutdown of the U.S. government, with a deadline set for this week. But such political impasses have had limited impact on the market before.
U.S. jobs data also will be in the spotlight.
U.S. futures edged higher early Monday and oil prices fell.
Tokyo’s Nikkei was the regional outlier, giving up 1% to 44,892.52.
Chinese markets advanced, with the Hang Seng in Hong Kong adding 1.5% to 26,518.03, while the Shanghai Composite index gained 0.1% to 3,832.65.
Australia’s S&P/ASX 200 rose 0.7% to 8,545.70, while the Kospi in South Korea surged 1.3% to 3,430.57.
On Friday, U.S. stocks trimmed their losses for the week after a report showed that inflation is behaving roughly as economists expected, even if it’s still high.
The S&P 500 rose 0.6% to 6,643.70. The Dow Jones Industrial Average gained 0.7% to 46,247.29, while the Nasdaq composite added 0.4% to 22,484.07. All three indexes pulled closer to the all-time highs they set at the start of the week.
Stocks got some help from the report showing inflation in the United States accelerated to 2.7% last month from 2.6% in July, according to the measure of prices that the Federal Reserve likes to use. While that’s above the Fed’s 2% target, it was precisely what economists had forecast.
That offered some hope that the Fed could continue cutting interest rates in order to give the economy a boost. Without such cuts, growing criticism that stock prices have become too expensive by rising too quickly would become even more powerful.
The Fed just delivered its first rate cut of the year last week but is not promising more because they could worsen inflation.
Another report said sentiment among U.S. consumers was weaker than economists expected. The survey from the University of Michigan said consumers are frustrated with high prices, but their expectations for inflation over the coming 12 months also ticked down to 4.7% from 4.8%.
One factor threatening to push inflation higher, adding to consumer woes, is President Donald Trump’s tariffs, and he announced more late Thursday. They include taxes on imports of some pharmaceutical drugs, kitchen cabinets and bathroom vanities, upholstered furniture and heavy trucks starting on Oct. 1.
Details were sparse about the coming tariffs, as is often the case with Trump’s pronouncements on his social media network. That left analysts unsure of their ultimate effects, and the announcement created ripples in the U.S. stock market instead of huge waves.
Paccar, the company based in Bellevue, Washington, that’s behind the market-dominant Peterbilt and Kenworth truck brands, revved 5.2% higher, for example.
Big U.S. pharmaceutical companies nudged higher. Eli Lilly rose 1.4%, and Pfizer added 0.7%.
In other trading early Monday, U.S. benchmark crude oil lost 49 cents to $65.23 per barrel. Brent crude, the international standard, declined 42 cents to $68.80 per barrel.
Reports that the OPEC plus oil producing nations might raise their production limits next month have added to worries over oversupply, analysts said.
The U.S. dollar slipped to 148.93 Japanese yen from 149.51 yen. The euro rose to $1.1727 from $1.1703.
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Private equity sees profits in power utilities as electric bills rise, Big Tech seeks more energy
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Private investment firms that are helping finance America’s artificial intelligence race and the huge buildout of energy-hungry data centers are getting interested in the local utilities that deliver electricity to regular customers — and the servers that power AI.
Billions of dollars from such firms are now flowing toward electric utilities in places including New Mexico, Texas, Wisconsin and Minnesota that deliver power to more than 150 million customers across millions of miles of power lines.
“The reason is very simple: because there’s a lot of money to be made,” said Greg Brown, a University of North Carolina at Chapel Hill professor of finance who researches private equity and hedge funds.
Private investment firms that have done well investing in infrastructure over the last 15 years now have strong incentives to add data centers, power plants and the services that support them at a time of rapid expansion and spiking demand ignited by the late 2022 debut of OpenAI’s ChatGPT, Brown said.
BlackRock’s CEO Larry Fink said as much in a July interview on CNBC, saying infrastructure is “at the beginning of a golden age.”
“We believe that there’s a need for trillions of dollars investing in infrastructure related to our power grids, AI, the whole digitization of the economy” and energy, Fink said.
In recent weeks, private equity firm Blackstone has sought regulatory approval to buy out a pair of utilities, Albuquerque-based Public Service Company of New Mexico and Lewisville, Texas-based Texas New Mexico Power Co.
Wisconsin earlier this year granted the buyout of the parent of Superior Water, Light and Power and the owner of Northern Indiana Public Service Co. last year sold a 19.9% stake in the utility to Blackstone.
However, a fight has erupted in Minnesota over the buyout of the parent of Duluth-based Minnesota Power and the outcome could determine how such firms expand their holdings in an industry that’s a nexus between regular people, gargantuan data centers and the power sources they share.
Under the proposed deal, a BlackRock subsidiary and the Canada Pension Plan Investment Board would buy out the publicly traded Allete, parent of Minnesota Power, which provides power to 150,000 customers and owns a variety of power sources, including coal, gas, wind and solar.
Both sides of the fight have attracted influential players ahead of a possible Oct. 3 vote by the Minnesota Public Utilities Commission. Raising the stakes is the potential that Google could build a data center there, a lucrative prospect for whoever owns Minnesota Power.
Opponents of the acquisition suspect that BlackRock is only interested in squeezing bigger profits from regular ratepayers. Allete makes the opposite argument, that BlackRock can show more patience because it is free of the short-term burdens of publicly traded companies.
Opponents also worry that a successful Minnesota Power buyout will launch more such deals around the U.S. and drive up electric bills for homes.
“It’s no secret that private equity is extremely aggressive in chasing profits, and when it comes to utilities, the profit motive lands squarely on the backs of ratepayers who don’t have a choice of who they buy their electricity from,” said Karlee Weinmann of the Energy and Policy Institute, which pushes utilities to keep rates low and use renewable energy sources.
The buyout proposals come at a time when electricity bills are rising fast across the U.S., and growing evidence suggests that the bills of some regular Americans are rising to subsidize the rapid buildout of power plants and power lines to supply the gargantuan energy needs of Big Tech’s data centers.
Mark Ellis, a former utility executive-turned-consumer advocate who gave expert testimony against the Minnesota Power buyout, said he’s talked to private equity firms that want to get into the business of electric utilities.
“It’s just a matter of what’s the price and will the regulator approve it,” Ellis said. “The challenge is they’re not going to come up for sale very often.”
That’s because electric utilities are seen as valuable long-term investments that earn around 10% returns not on the electricity they deliver, but the upcharge that utility regulators allow on capital investments, like upgrading poles, wires and substations.
That gives utility owners the incentive to spend more so they can make more money, critics say.
The fight over Minnesota Power resembles some of the battles erupting around the U.S. where residents don’t want a data center campus plunked down next to them.
Building trades unions and the administration of Democratic Gov. Tim Walz, who appointed or reappointed all five utility commissioners, are siding with Allete and BlackRock.
On the other side are the state attorney general’s office and the industrial interests that buy two-thirds of Minnesota Power’s electricity, including U.S. Steel and other owners of iron ore mines, Enbridge-run oil pipelines and pulp and paper mills.
In its petition, Allete told regulators that, under BlackRock’s ownership, Minnesota Power’s operations, strategy and values wouldn’t change and that it doesn’t expect the buyout price — $6.2 billion, including $67 a share for stockholders at a 19% premium — to affect electric rates.
In essence, Allete — which solicited bids for a buyout — argues that BlackRock’s ownership will benefit the public because, under it, the utility will have an easier time raising the money it needs to comply with Minnesota’s law requiring utilities to get 100% of their electricity from carbon-free sources by 2040.
Allete has projected needing to spend $4.3 billion on transmission and clean energy projects over five years.
However, opponents say Allete’s suggestion that it’ll struggle to raise money is unfounded, and undercut by its own filings with the U.S. Securities and Exchange Commission in which it says it is “well positioned” to meet its financing needs.
It hasn’t been smooth sledding for BlackRock.
In July, an administrative law judge, Megan J. McKenzie, recommended that the commission reject the deal, saying that the evidence reveals the buyout group’s “intent to do what private equity is expected to do – pursue profit in excess of public markets through company control.”
In recent days, a utility commission staff analysis echoed McKenzie’s concerns.
They suggested that private investors could simply load up Minnesota Power’s parent with massive debts, borrow at a relatively low interest rate and turn a fat profit margin from the utility commission granting a generous rate of return.
“For the big investors in private equity, this is a win-win,” the staff wrote. “For the ratepayers of the highly leveraged utility, this represents paying huge profits to the owners if the private equity ‘wins’ and dealing with a bankrupt utility provider if it loses – it is a lose-lose.”
NOTE: The above video first aired on April 22, 2025.
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Follow Marc Levy on X at: https://x.com/timelywriter
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Ken Griffin has a warning for Trump and the GOP: ‘I would not underestimate how grating a 3% inflation rate could be’ on Americans | Fortune
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For Citadel CEO Ken Griffin, the political implications of still-elevated inflation are not lost on him.
Inflation has come down a lot from 9% in 2022 to 2.9% in the government’s latest CPI report. Core PCE prices, the Fed’s favorite gauge of inflation, rose 2.9% in August, matching July’s climb.
But inflation has been sticky as tariffs take hold, and Griffin predicted inflation will continue to be in the mid-2% to 3% range next year, still above the Fed’s 2% target.
“The American voters have been exhausted of inflation,” he told CNBC on Thursday.
In 2024, the high cost of living was a focal point in Trump’s reelection campaign, and Biden-era inflation hurt Democrats. They lost the White House and Congress, while Trump won all seven swing states.
Many voters blamed Democratic policies—including stimulus spending—for sustained, high costs, exit polls found.
“There’s no doubt that the president and the Republicans came to power on the back of frustration with inflation,” Griffin said. “I would not underestimate how grating a 3% inflation rate could be to tens of millions of American households.”
Inflation could feature heavily in midterm elections next year, as the Republican Party looks to defend narrow majorities in the House and Senate. And voters are souring on Trump’s economy.
A recent Reuters/Ipsos poll showed only 28% of respondents approved of Trump’s handling of their cost of living. A YouGov/Economist poll put Trump’s approval rating on the economy at an all-time low of 35%.
One indicator of affordability has been a thorn in Trump’s side: high mortgage rates. Yet as Trump looks to the Fed for homeowner relief, many worry about political influence over the independent body.
Trump has been criticized lately for pressuring the Federal Reserve and threatening its independence. Critics argue that his efforts to appoint loyalists to the Fed, public calls to lower interest rates, and attempts to remove a sitting governor represent a clear move to sway monetary policy for political purposes.
Griffin advised that continued Fed independence would be in Trump’s interest.
“If I were the president, I would let the Fed do their job,” he said. “I would let the Fed have as much perceived and real independence as possible, because the Fed often has to make choices that are pretty painful to make.”
The Federal Open Market Committee cut interest rates by a fourth of a percent earlier this month to buoy a slowing labor market. The move comes after months of continued pressure from the Trump administration on Fed Chair Jerome Powell and other committee members to cut rates.
Still, President Donald Trump has been vocal about cutting rates further, even though the move likely will risk further price increases.
Griffin warned that erosion of Fed independence could lead to Americans conflating the White House and central bank.
“If the president’s perceived as being in control of the Fed, then what happens when those painful choices have to be made?”
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Tariffs, government spending, gas prices—what’s driving inflation right now? – MoneySense
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Here’s what you need to know about the state of inflation in Canada.
A modest increase in inflation leaves policy-makers focused on the bigger picture
Statistics Canada says the annual rate of inflation came in at 1.9% in August, up from 1.7% in July. The Bank of Canada is responsible for maintaining price stability in Canada and sets a target of 2% for annual inflation.
“I mean, 1.9% is actually pretty good,” said Mostafa Askari, chief economist at the Institute of Fiscal Studies and Democracy and the University of Ottawa. Askari said a brief month-to-month increase in inflation isn’t much to worry about on its own. He said policy-makers should watch trends over six months or longer before reacting to movement in price figures.
Canadians see relief at the pumps and in mortgages, but food prices stay sticky
Randall Bartlett, deputy chief economist at Desjardins, said the big factor easing inflation right now is the termination of the consumer carbon price. `Because the carbon levy was in place for consumers in 2024, the Liberals’ move to end the policy in April has meant lower prices at the gas pumps in recent months, skewing data in the year-over-year comparisons.
Shelter inflation is also diminishing as the pace of population growth slows, easing competition for apartments and reducing rent prices in many cities. Canadians shopping for a new mortgage today are also seeing rates closer to 4% on a five-year fixed loan. Rates were well over 5% this time last year.
One area where consumers are still feeling the pinch is food inflation, which StatCan pegged at 3.4% in August. That rate is still well below the double-digit yearly gains seen during the height of the inflationary period of a few years ago.
Askari said consumers are feeling the cumulative impact of years of inflation pushing prices higher, particularly at the grocery store. Prices tend to rise quickly on the way up but are “sticky” on the way down, if they ease at all, he said.
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Tariffs and weather shifts keep food prices volatile, but inflation relief is on the horizon
Another force affecting grocery inflation is Canada’s retaliatory tariffs against the United States. Some counter tariffs—which are paid by Canadian firms importing U.S. goods—were imposed on inputs for manufactured products and are baked into the final cost of a good or absorbed into a company’s margins.
Those costs show up more readily in perishable goods bought at the grocery store, like Florida orange juice. But fresh food prices are also vulnerable to shifts in weather and growing conditions around the world. Askari said this makes it difficult to say with absolute certainty how much price hikes are tied to tariff impacts.
Canada dropped most of its retaliatory tariffs on the United States at the start of the month. Combined with the elimination of the consumer carbon price, Bartlett expects the end of counter tariffs will leave headline inflation a full percentage point lower in 2026 than it would have been with those two policies in place. But he also expects previous impacts from counter tariffs will persist in the inflation readings for September and gradually fade through the rest of the year.
Deficit spending isn’t always inflationary; context matters, experts argue
Conservative Leader Pierre Poilievre has accused the federal government of running deficits that fuel inflation. “Deficits drive up inflation, grocery prices, housing costs, and interest rates,” he said in question period on Sept. 17. Experts say the impact of federal spending on inflation is less clear than that.
Askari said that when government spending results in more money in the pockets of Canadians or businesses, it drives up spending demand in the economy. More demand, without an associated boost in supply, can drive up inflation.
When government spending is aimed at increasing supply, however—by expanding the stock of housing, for example—that can take pressure out of inflation, Askari said. “In principle, deficit spending could put pressure on prices. Calling every government spending inflationary is not correct,” he said.
Canada’s economy contracted in the second quarter, and most economists expect a modest recovery to start in the third quarter. Bartlett said this reflects an economy that’s operating below its potential—there’s slack in the economy, in other words—so a bit of fiscal stimulus could “shore up” the economy without triggering a sharp spike in inflation.
There are limits, however. Bartlett said the size of the deficit the federal Liberals have telegraphed is coming in the upcoming fall budget may, in fact, be higher than warranted, given the state of the economy. Ottawa’s planned capital investments could be inflationary in the near-term if they lead to a surge in demand for construction labour and materials, Bartlett said.
But those same spending plans could take steam out of inflation in the future if they help to boost productivity in the economy in the medium or longer term, he added. “The proof in the pudding is going to be in the tasting, in terms of how effective this infrastructure investment is,” Bartlett said.
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The Canadian Press
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Private equity sees profits in power utilities as electric bills rise and Big Tech seeks more energy
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HARRISBURG, Pa. — Private investment firms that are helping finance America’s artificial intelligence race and the huge buildout of energy-hungry data centers are getting interested in the local utilities that deliver electricity to regular customers — and the servers that power AI.
Billions of dollars from such firms are now flowing toward electric utilities in places including New Mexico, Texas, Wisconsin and Minnesota that deliver power to more than 150 million customers across millions of miles of power lines.
“The reason is very simple: because there’s a lot of money to be made,” said Greg Brown, a University of North Carolina at Chapel Hill professor of finance who researches private equity and hedge funds.
Private investment firms that have done well investing in infrastructure over the last 15 years now have strong incentives to add data centers, power plants and the services that support them at a time of rapid expansion and spiking demand ignited by the late 2022 debut of OpenAI’s ChatGPT, Brown said.
BlackRock’s CEO Larry Fink said as much in a July interview on CNBC, saying infrastructure is “at the beginning of a golden age.”
“We believe that there’s a need for trillions of dollars investing in infrastructure related to our power grids, AI, the whole digitization of the economy” and energy, Fink said.
In recent weeks, private equity firm Blackstone has sought regulatory approval to buy out a pair of utilities, Albuquerque-based Public Service Company of New Mexico and Lewisville, Texas-based Texas New Mexico Power Co.
Wisconsin earlier this year granted the buyout of the parent of Superior Water, Light and Power and the owner of Northern Indiana Public Service Co. last year sold a 19.9% stake in the utility to Blackstone.
However, a fight has erupted in Minnesota over the buyout of the parent of Duluth-based Minnesota Power and the outcome could determine how such firms expand their holdings in an industry that’s a nexus between regular people, gargantuan data centers and the power sources they share.
Under the proposed deal, a BlackRock subsidiary and the Canada Pension Plan Investment Board would buy out the publicly traded Allete, parent of Minnesota Power, which provides power to 150,000 customers and owns a variety of power sources, including coal, gas, wind and solar.
Both sides of the fight have attracted influential players ahead of a possible Oct. 3 vote by the Minnesota Public Utilities Commission. Raising the stakes is the potential that Google could build a data center there, a lucrative prospect for whoever owns Minnesota Power.
Opponents of the acquisition suspect that BlackRock is only interested in squeezing bigger profits from regular ratepayers. Allete makes the opposite argument, that BlackRock can show more patience because it is free of the short-term burdens of publicly traded companies.
Opponents also worry that a successful Minnesota Power buyout will launch more such deals around the U.S. and drive up electric bills for homes.
“It’s no secret that private equity is extremely aggressive in chasing profits, and when it comes to utilities, the profit motive lands squarely on the backs of ratepayers who don’t have a choice of who they buy their electricity from,” said Karlee Weinmann of the Energy and Policy Institute, which pushes utilities to keep rates low and use renewable energy sources.
The buyout proposals come at a time when electricity bills are rising fast across the U.S., and growing evidence suggests that the bills of some regular Americans are rising to subsidize the rapid buildout of power plants and power lines to supply the gargantuan energy needs of Big Tech’s data centers.
Mark Ellis, a former utility executive-turned-consumer advocate who gave expert testimony against the Minnesota Power buyout, said he’s talked to private equity firms that want to get into the business of electric utilities.
“It’s just a matter of what’s the price and will the regulator approve it,” Ellis said. “The challenge is they’re not going to come up for sale very often.”
That’s because electric utilities are seen as valuable long-term investments that earn around 10% returns not on the electricity they deliver, but the upcharge that utility regulators allow on capital investments, like upgrading poles, wires and substations.
That gives utility owners the incentive to spend more so they can make more money, critics say.
The fight over Minnesota Power resembles some of the battles erupting around the U.S. where residents don’t want a data center campus plunked down next to them.
Building trades unions and the administration of Democratic Gov. Tim Walz, who appointed or reappointed all five utility commissioners, are siding with Allete and BlackRock.
On the other side are the state attorney general’s office and the industrial interests that buy two-thirds of Minnesota Power’s electricity, including U.S. Steel and other owners of iron ore mines, Enbridge-run oil pipelines and pulp and paper mills.
In its petition, Allete told regulators that, under BlackRock’s ownership, Minnesota Power’s operations, strategy and values wouldn’t change and that it doesn’t expect the buyout price — $6.2 billion, including $67 a share for stockholders at a 19% premium — to affect electric rates.
In essence, Allete — which solicited bids for a buyout — argues that BlackRock’s ownership will benefit the public because, under it, the utility will have an easier time raising the money it needs to comply with Minnesota’s law requiring utilities to get 100% of their electricity from carbon-free sources by 2040.
Allete has projected needing to spend $4.3 billion on transmission and clean energy projects over five years.
However, opponents say Allete’s suggestion that it’ll struggle to raise money is unfounded, and undercut by its own filings with the U.S. Securities and Exchange Commission in which it says it is “well positioned” to meet its financing needs.
It hasn’t been smooth sledding for BlackRock.
In July, an administrative law judge, Megan J. McKenzie, recommended that the commission reject the deal, saying that the evidence reveals the buyout group’s “intent to do what private equity is expected to do – pursue profit in excess of public markets through company control.”
In recent days, a utility commission staff analysis echoed McKenzie’s concerns.
They suggested that private investors could simply load up Minnesota Power’s parent with massive debts, borrow at a relatively low interest rate and turn a fat profit margin from the utility commission granting a generous rate of return.
“For the big investors in private equity, this is a win-win,” the staff wrote. “For the ratepayers of the highly leveraged utility, this represents paying huge profits to the owners if the private equity ‘wins’ and dealing with a bankrupt utility provider if it loses – it is a lose-lose.”
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Follow Marc Levy on X at: https://x.com/timelywriter
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All bark, no bite: Trump’s latest trade war turns into another TACO salad for Wall Street | Fortune
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When President Donald Trump made his “Liberation Day” speech on April 2, announcing sweeping tariffs across a range of sectors, markets reacted sharply. Investors feared a replay of the disruptive trade battles of his first term, and stocks dropped as they tried to assess how new levies might ripple through global supply chains.
But six months on, the story looks different. Much of the initial panic has faded, replaced by recognition that the real economic impact of Trump’s tariffs has been softened by carve-outs, negotiated deals, and exemptions. In fact, stocks snapped out of a multi-day losing streak on Friday, reacting almost with disregard to the latest surprise from Trump’s social media account.
Now, as Trump tries to reignite the trade war with an overnight announcement of a slew of tariffs, including a 100% tariff on branded and patented pharmaceuticals and a 50% tariffs on furniture imports, markets are barely reacting.
Michael Browne, global investment strategist at Franklin Templeton, said that the markets regard tariffs as “over.”
“The real level of tariffs is much lower, which is one of the reasons the impact has been muted,” Browne told The Financial Times.
The other reason could be that consumers have proven far more resilient to higher prices than economists once expected.
Pharma scare eases quickly
At first, the news rattled European and Asian drugmakers. Zealand Pharma dropped nearly 3%, Novo Nordisk lost 1.6%, and India’s Sun Pharmaceutical and Divi’s Laboratories fell more than 3% in early trading. The Stoxx 600 Healthcare index swung between gains and losses before closing flat.
Yet European equities as a whole closed higher, underscoring how investors now discount Trump’s tariff announcements.
The pan-European Stoxx 600 finished the day up 0.8%, with the CAC 40 in Paris up 0.97%, the DAX in Frankfurt up 0.87%, and Madrid’s IBEX 35 leading gains with a 1.3% rise.
JPMorgan strategists quickly told clients the pharma tariff was “largely avoidable” for companies that expand U.S. manufacturing.
“We continue to see a very manageable overall impact from tariffs to our large-cap coverage,” the note said, according to CNBC.
The resilience reflects the numerous carveouts from the pharma tariffs. Generics — which account for nine out of ten U.S. prescriptions — are excluded from the new levies. A U.S.–EU trade agreement limits duties on most European drug exports to 15%. And companies actively investing in U.S. manufacturing, such as Eli Lilly, AstraZeneca, Roche, GSK, and Amgen, are exempt as soon as they break ground on new facilities.
Analysts were quick to highlight those caveats.
“Many large-cap biopharmaceutical companies should not be exposed because they are engaged in some sort of U.S. facility construction activity,” Leerink Partners’ David Risinger told BioPharma Dive.
The White House pushed back on the “carve-out” framing, saying these are Section 232 national-security tariffs aimed at reshoring critical manufacturing.
The exemptions for companies “building” U.S. plants are temporary, intended to give firms runway to relocate production without immediately hiking prices, spokesperson Kush Desai told Fortune. He added that the 15% caps on many European (and Japanese) pharma exports reflect broader trade agreements that included “significant concessions that favor the U.S.,” not a softening of the tariff stance.
Resilient consumers
For investors, the reaction was familiar. Initial volatility gave way to a recognition that tariffs rarely land as broadly as advertised.
Imports account for only around 10% of the U.S. economy, giving businesses and consumers room to adjust. Many companies stocked up on goods ahead of deadlines, while others shifted to alternative suppliers.
“It may be that inflation comes through, but there is no sign of that yet,” Browne told Financial Times.
The muted market response also reflects a larger truth: consumers have been much more resilient than most economists expected. Commerce Department data released Thursday showed the U.S. economy grew at a 3.8% annual pace last quarter, its strongest stretch since 2023, powered by robust household spending and business investment.
Economists note that Americans’ willingness to keep shopping, even amid high borrowing costs, has repeatedly surprised forecasters.
As Boston wealth manager Gina Bolvin put it, the real lesson may be that “don’t fight the Fed” has become “don’t fight the U.S. consumer.”
TACO
Markets’ calm also reflects a trade they’ve come to rely on — what analysts call the TACO trade (Trump Always Chickens Out). After April’s “Liberation Day” shock, investors assumed Trump would follow his familiar pattern: issue sweeping tariff threats, then pull back once markets started to wobble. That confidence helped stocks rebound to record highs.
Exemptions have reinforced that bet. The effective average tariff rate has stayed well below headline figures, thanks to carve-outs fand exemptions for companies breaking ground on U.S. plants.
Economists caution that tariffs often take months to ripple through supply chains, so some price pressure could still emerge later this year. But so far, inflation data has remained stable, undercutting predictions that trade policy would deliver a consumer shock.
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Eva Roytburg
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Inflation held steady in August, in line with economist forecasts
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The core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, rose slightly in August, in line with economists’ expectations.
Inflation yardsticks such as the PCE index and the Consumer Price Index measure the change in prices over time of a typical basket of goods and services.
The core PCE, which excludes volatile fuel and food prices, shows a 2.9% in August on an annual basis, the same as July and in line with predictions from economists polled by financial data provider FactSet.
The PCE rose 2.7% on an annual basis, a slight increase from the 2.6% year-over-year increase in July and the highest since February, according to data released Friday by the Commerce Department.
Inflation has come down since rising prices prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023. But annual price gains have remained stubbornly above the central bank’s 2% target. The Consumer Price Index (CPI), another key measure of inflation that tracks the change in prices on everyday items, also ticked higher last month.
The ongoing strain of higher prices is taking a toll on Americans. A CBS News poll released earlier this month showed many are souring at the state of the economy. Two-thirds of the 2,344 U.S. adults polled said prices are still going up, with the same amount saying they expect prices to keep escalating in the coming months.
Last week, the Fed went ahead and reduced the rate for the first time this year, lowering borrowing costs to help a deteriorating U.S. job market. But it’s been cautious about cutting, waiting to see what impact President Donald Trump’s sweeping taxes on imports have on inflation and the broader economy.
For months, Trump has relentlessly pushed the Fed to lower rates more aggressively, calling Fed Chair Jerome Powell “Too Late” and a “moron” and arguing that there is “no inflation.”
It’s widely expected that the Fed will cut rates at its next meeting, which is scheduled for Oct. 28 – 29.
“This inline PCE today can keep the focus of the Fed on their full employment mandate, which will give them room to continue normalization of the Fed Funds rate,” Art Hogan, chief market strategist at investment firm B. Riley Financial, said in an email note.
Last month, Trump sought to fire Lisa Cook, a member of the Fed’s governing board, in an effort to gain greater control over the central bank. She has challenged her dismissal in court, and the Supreme Court will decide whether she can stay on the job while the case goes through the judicial system.
The Fed tends to favor the PCE inflation gauge that the government issued Friday over the better-known consumer price index. The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.
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Fed’s favored inflation gauge accelerates slightly in August
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WASHINGTON — The Federal Reserve’s favored inflation gauge accelerated slightly in August from a year earlier.
The Commerce Department reported Friday that its personal consumption expenditures (PCE) price index was up 2.7% in August from a year earlier, a tick higher from a 2.6% year-over-year increase in July and most since February.
Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, same as in July. The increases were what forecasters had expected.
Inflation has come down since rising prices prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023. But annual price gains remain stubbornly above the central bank’s 2% target.
Last week, the Fed went ahead and reduced the rate for the first time this year, lowering borrowing costs to help a deteriorating U.S. job market. But it’s been cautious about cutting, waiting to see what impact President Donald Trump’s sweeping taxes on imports have on inflation and the broader economy.
For months, Trump has relentlessly pushed the Fed to lower rates more aggressively, calling Fed Chair Jerome Powell “Too Late” and a “moron” and arguing that there is “no inflation.”
Last month, Trump sought to fire Lisa Cook, a member of the Fed’s governing board, in an effort to gain greater control over the central bank. She has challenged her dismissal in court, and the Supreme Court will decide whether she can stay on the job while the case goes through the judicial system.
The Fed tends to favor the PCE inflation gauge that the government issued Friday over the better-known consumer price index. The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.
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Trump has repeatedly said the U.S. has “no inflation.” He’s
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President Donald Trump frequently touts his battle against higher prices, often by saying the U.S. currently has “no inflation.”
On Sept. 19, while meeting reporters in the Oval Office, Trump referenced his tariff policy, saying, “Even people that were against the tariffs, now they see the way they’re working. And by the way, with no inflation, with no problem, we’re just building up cash and we’re using that cash to reduce taxes, reduce debt, and other things.”
It wasn’t the first time he said that. Since July 1, Trump has referred to the U.S. having “no inflation” 11 times at eight events — a radio interview, a bill signing, bilateral meetings with a foreign leader, gaggles with reporters, a Cabinet meeting, and a roundtable in Florida.
In a Sept. 12 interview with Fox News, he hedged slightly, saying, “We have almost no inflation anymore.”
By two measures — the inflation rate and the Federal Reserve’s target for “price stability” — the statement about no inflation is inaccurate.
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Trump’s statements about “no inflation” is also undercut by White House news releases, which on multiple occasions since July 1 have characterized the current level of inflation as beating expectations, not being zero. The news releases have used more cautious phrasing, describing inflation as “on target” and “low and stable.”
When we asked the White House for evidence to back up Trump’s statements, White House spokesperson Kush Desai echoed the news releases’ language, saying, “President Trump is right: The days of Joe Biden’s debilitating inflation crisis are over. Since President Trump took office, inflation has been tracking at a low and stable 2.3 percent annualized rate and real wages for American workers are up.”
Inflation today is far lower than its 2022 peak under Biden, when the consumer price index — a widely tracked Bureau of Labor Statistics inflation metric — hit a four-decade high of about 9% year-over-year.
But there’s a difference between lower inflation and no inflation.
“Consumer price inflation is not zero, under any plausibly complete definition covering all the goods and services Americans purchase,” said Gary Burtless, an economist at the Brookings Institution, a Washington, D.C., think tank.
Measuring by the inflation rate
Trump is wrong by the literal inflation rate. In August, the year-over-year consumer price index increase was 2.9%, just a hair lower than its 3% level when Trump began his second term.
Inflation eased after the 2022 peak, mostly on Biden’s watch. By the time Biden left office, inflation was down by about two-thirds from the 2022 peak.
Measuring by the Federal Reserve’s target for “price stability”
Has the inflation rate settled in at the Fed’s target? Here, too, the answer is no.
Historically, the Federal Reserve has aimed for “price stability” of about 2% rather than a literal 0% inflation rate. To measure whether inflation is close to that 2% benchmark, the Fed uses personal consumption expenditures, a measurement that’s slightly different from the consumer price index.
In July, the year-over-year change in personal consumption expenditures was about 2.6%, above the Fed’s 2% target.
If measuring “core inflation” by removing food and energy — an approach economists sometimes prefer, because it reduces the volatility of the index — the year-over-year change in personal consumption expenditures was about 3.5%.
Is the inflation rate falling?
Not only is the inflation rate not zero or 2%; it’s been creeping further and further away from those benchmarks.
From February to April, the inflation rate declined. But then, prices began to rise.
Three measures — the consumer price index, personal consumption expenditures and personal consumption expenditures minus food and energy — all reached their Trump second-term lows in April, then began rising. For the consumer price index minus food and energy, the inflection point came one month later, in May.
Except for a few wiggles, the inflation rate has climbed every month since — in May, June, July and August.
The inflation rates are now back to about where they were when Trump took office, but based on the trajectory, heading higher.
Many categories have seen steadily increasing inflation during Trump’s second term, too. These include electricity (up 6.2% from August 2024 to August 2025), used vehicles (up 6%), medical care (up 3.4%), groceries (up 2.7%) and durable goods (up 1.9%).
At least two major sectors have seen declining inflation rates this year — shelter (a broad category for housing) and tuition/child care — but they are outnumbered by sectors that have seen accelerating inflation. And both shelter and tuition/child care remain more expensive today than a year ago: 3.6% higher for shelter and 3.3% higher for tuition/child care.
“I think there could be some room for the administration to highlight less inflation, so far, than economists predicted in response to his tariff policies, but not to claim no inflation,” said Tara Sinclair, a George Washington University economist and former Treasury Department deputy assistant secretary for macroeconomics under Biden.
Our ruling
Trump said the U.S. currently has “no inflation.”
By two measures — the inflation rate and the Federal Reserve’s target for “price stability” — the statement is inaccurate.
The inflation rate is not zero; it’s currently at 2.9% year over year. That’s higher than the Fed’s 2% “price stability” target. of 2%. And the inflation rate has been accelerating rather than easing for the past four months.
We rate the statement False.
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