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Trump teases tariffs on imported furniture

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Trump teases tariffs on imported furniture

President Donald Trump has announced an investigation into tariffs on foreign-made furniture, which could affect prices and manufacturing in the U.S.

Updated: 7:31 AM EDT Aug 23, 2025

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President Donald Trump said on Friday that new tariffs on foreign-made furniture are coming later this year following an investigation.”Within the next 50 days, that Investigation will be completed, and Furniture coming from other Countries into the United States will be Tariffed at a Rate yet to be determined,” the president wrote on Truth Social. “This will bring the Furniture Business back to North Carolina, South Carolina, Michigan, and States all across the Union.”A White House official clarified that the president is referencing a previously announced investigation that “will assess the national security risks arising from the United States’ increasing dependence on imported timber, lumber, and derivative products like paper, furniture, and cabinetry.”Nevertheless, the president’s comments on Friday sank some furniture stocks, from Wayfair to Williams-Sonoma. An industry coalition, called “Furniture for America,” expressed concerns about steeper tariffs earlier this year in written comments to the Commerce Department.”There is no rational relationship between imports of wood products or furniture and the national security of the United States,” the coalition wrote. “Second, no amount of tariffs will bring back American furniture manufacturing back to its prior levels. Tariffs will harm manufacturing still being done in the United States.” The White House said new tariffs on this sector would not stack on top of so-called “reciprocal” tariffs that are already targeting a wide range of countries, including major furniture suppliers like China and Vietnam. Federal data suggests those tariffs may be starting to show up in some furniture prices for consumers. The latest Consumer Price Index shows that, while overall inflation held steady between June and July 2025, furniture and bedding prices increased by 0.9 percent month-to-month. Some experts have identified this as an early warning sign, while conceding that the impact of tariffs on prices has generally been less severe than anticipated, perhaps because many businesses are absorbing added costs instead of passing them on to consumers. It remains to be seen how Trump’s latest batch of tariffs on most trading partners that took effect earlier this month will impact these trends.

WASHINGTON —

President Donald Trump said on Friday that new tariffs on foreign-made furniture are coming later this year following an investigation.

“Within the next 50 days, that Investigation will be completed, and Furniture coming from other Countries into the United States will be Tariffed at a Rate yet to be determined,” the president wrote on Truth Social. “This will bring the Furniture Business back to North Carolina, South Carolina, Michigan, and States all across the Union.”

A White House official clarified that the president is referencing a previously announced investigation that “will assess the national security risks arising from the United States’ increasing dependence on imported timber, lumber, and derivative products like paper, furniture, and cabinetry.”

Nevertheless, the president’s comments on Friday sank some furniture stocks, from Wayfair to Williams-Sonoma.

An industry coalition, called “Furniture for America,” expressed concerns about steeper tariffs earlier this year in written comments to the Commerce Department.

“There is no rational relationship between imports of wood products or furniture and the national security of the United States,” the coalition wrote. “Second, no amount of tariffs will bring back American furniture manufacturing back to its prior levels. Tariffs will harm manufacturing still being done in the United States.”

The White House said new tariffs on this sector would not stack on top of so-called “reciprocal” tariffs that are already targeting a wide range of countries, including major furniture suppliers like China and Vietnam.

Federal data suggests those tariffs may be starting to show up in some furniture prices for consumers.

The latest Consumer Price Index shows that, while overall inflation held steady between June and July 2025, furniture and bedding prices increased by 0.9 percent month-to-month. Some experts have identified this as an early warning sign, while conceding that the impact of tariffs on prices has generally been less severe than anticipated, perhaps because many businesses are absorbing added costs instead of passing them on to consumers.

It remains to be seen how Trump’s latest batch of tariffs on most trading partners that took effect earlier this month will impact these trends.

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August 23, 2025

Inflation undershoots to jumbo cuts: What 10 European Central Bank members said this week

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After the European Central Bank cut interest rates for the third time this year — and inflation fell below target — all eyes are now on policymakers’ next move.

A slew of Governing Council members spoke to CNBC’s Karen Tso at the International Monetary Fund’s annual meeting in Washington, D.C. this week. We asked them about the inflation outlook, the chances of a jumbo 50-basis-point interest cut in December, and more.

Mārtiņš Kazāks, Bank of Latvia

On a 50-basis-point rate cut: “Well, everything should be on the table, you know, given what the data tells us. But we will have that discussion in December, and we will have the discussion then early next year, and from meeting to meeting … With us approaching the 2% target, and with the economy being quite weak for the rates, the way is down at 3.25, we are still quite considerably in the restrictive territory.

“So easing up the pressure from the rates, of course, is what we would need to do, and this is what we would do. But of course, you know, we need to see the data … There is both 0% cut, 25 basis point cut, you know, and there is also perhaps a bigger cut possibility, but that will all depend upon data.”

Pierre Wunsch, National Bank of Belgium

'I'm not excluding anything' — but it's better to be gradual, says ECB's Wunsch on rate cuts

“Well, if you say you’re data dependent, you are data dependent. I don’t want to anticipate on what the data are going to tell us. There might be discussion, indeed, on whether we need to remove restriction faster than we thought, or not. Again, depending on the data. A 50-point move would be a big move, so I think it would only be justified if we have data, which would be, you know, going down on inflation. But probably also in terms of GDP growth going in the wrong direction, which is not really what we see today.

“… I’m not excluding anything, but we’ve started quite early in cutting rates. I think it’s good if we can be … gradual and not create volatility in the market that would be unwarranted.”

Mario Centeno, Bank of Portugal

ECB’s Centeno says a half-point interest rate cut should be on the table in December

“Data will tell, but the truth is that the print of inflation in September was very low, way lower than what we were expecting. This was true for headline but also for core. So we have converged, inflation is as close to 2% in the medium term as it can be, and we need to take that into our story.

“After that, we need to look at the incoming data, the trends in the data that we have been observing. And certainly, 50 basis points can be on the table, because we continue to be data dependent, and the data we are getting points in that direction.”

Klaas Knot, Netherlands central bank

ECB’s Knot says the central bank should worry about undershoots as much as it does about overshoots

“Are we risking a structural undershoot of our inflation target? I don’t think so. And why not? Well, look at wages. Wages are still running at a pace which is double the pace that would be consistent with the return to a 2% inflation target and half a percent productivity growth.

“Unfortunately, we don’t have more productivity growth in the euro area, so as long as wages are still at that elevated level, yes, there could be a temporary undershoot of our target, but I don’t think the risk of a structural, longer-term undershoot is all that significant.

“The 1.7 [September inflation print] is a temporary blip. It’s entirely due to base effects and it will likely disappear from the data again in the coming months. So we really take a medium-term orientation for our policy, and that statement [about returning inflation to 2%] is meant to assure that, yes, on the medium term, we are committed and we are dedicated to bring[ing] inflation back to 2%, our target.”

Robert Holzmann, Austrian National Bank

ECB's Holzmann says a soft landing in Europe appears to be guaranteed

“I’m sure some of my colleagues will go for a big cut, others not. In my case, I will say I will look at the data.

“If things really get as bad as some claim, we can have another 25 [basis point cut], [but] 50? I would say at the moment with the data, no.”

Joachim Nagel, German central bank

ECB’s Nagel says speculation over jumbo interest rate cuts is not helpful

On rate cuts: “This discussion about 25 or maybe something different is not helpful. We are living in a very uncertain environment so we have to wait for the new data and then we have to decide.

“We did what we did [at the October meeting], and this is based on the way we conducted monetary policy over the past, so we keep our flexibility in every direction.”

On inflation: “I think we shouldn’t become too complacent here. There was the [below target] September data … maybe there’s also a certain probability that the upcoming data for October, November, December might go in the other direction. So as I said, we should keep our flexibility here, data-dependent approach, I think this is the best strategy that really worked well over the last two and a half years.”

François Villeroy de Galhau, Bank of France

French central bank governor: Reasonably confident soft landing will be achieved

On inflation: “Victory is in sight, but we shouldn’t be complacent.”

On the chance of an economic soft landing: “I think we can have a reasonable degree of confidence. Remember two years ago there were many fears on both sides of the Atlantic that we would have a recession, and that the so-called sacrifice ratio, the price to pay in terms of growth for coming back to the inflation target, would be vey high. It’s not the case.

“I think that our path credibility played a significant role, because we were credible, inflation expectations remained well-anchored, and so the level of interest rates in this last episode of disinflation was much lower than, remember 50 years ago, the Volcker episode.”

Olli Rehn, Bank of Finland

ECB's Rehn: Direction of travel for rate cuts is clear

On the economy: “I think we have both good news and worse news from Europe. The good news is that disinflation is on track. That’s important. It’s improving the real incomes of our households and citizens. Also, employment has remained, overall, quite robust. On the other hand, we see a weakened growth outlook, and we see that productivity growth is the Achilles heel of Europe. So it’s been one factor that prompted us to decide rate cuts last week, to cut rates by 25 basis points in Europe, because disinflation is on track, and because we are seeing a weakened growth outlook, which is also increasing disinflationary pressures.”

On rate cuts: “The direction is clear. We are continuing the rate-cutting cycle. The speed and scale of rate cuts depends on the incoming data. And we are looking, in particular, [at] three factors, three variables in this regard. First, the inflation output; second, underlying inflation, i.e. neutralized from energy and food prices, and third, the strength of monetary policy transmission. That’s data dependency. For me, it is not, certainly, any kind of data-point dependency. It’s even more, I would say, analysis dependency.”

Gediminas Šimkus, Bank of Lithuania

ECB clearly moving toward direction of easing monetary policy, says Bank of Lithuania's chairman

On rate cuts: “We are clearly moving … towards the direction of easing monetary policy. So what, at this point, I can clearly say that, in the coming meetings … [we are] definitely going to see some cuts. But what are the cuts? How big they are, or if they are, it will depend on the data that we have at the moment of the decision.

” … I don’t think these super cuts, you know, are somehow grounded, unless we see, we clearly see, we really see something unexpected and bad and expected in the data. And so far, we didn’t think that … this would be a case. But the October decision for me is literally what we mean by meeting, by meeting, dependent on data decision. As the data showed: we need to take this decision. We made it.”

Boris Vujčić, Croatian National Bank

Let's wait for more inflation readings to see 'what's really going on': ECB's Vujčić

On the economy: “Well, in Europe, it does not look as good as it did six months ago or three months ago. It’s true that the current PMIs, particularly, are showing the slowing down of the economy. Much of it, I’m afraid, is structural. Part of it is cyclical … Of course, we are now on the way down with our rates, which will help the cyclical component … but the structural one is something that will have to be addressed in [the] medium term.”

On rate cuts: “I’m completely open to any discussion in December. Personally, I don’t know what the decision will be, nor I think we should know at the moment, because we should wait if we are data dependent, we should not now talk about 25 [basis points] versus 50, or maybe a pause in December. Anything can happen depending on the incoming data.”

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October 24, 2024

Why bond yields are rising and what stock investors should do about that

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Bond traders are at it again, pushing Treasury yields higher and signaling the Federal Reserve was too heavy-handed when it cut interest rates by a half-percentage point last month. The recently rising yields have put pressure on the stock market — and specifically, names in our portfolio tied to housing. The 10-year Treasury yield — which influences all kinds of consumer loans, including mortgage rates — rose again Wednesday, reaching a session-high 4.26%. That’s a level not seen since late July when the yield had started to turn lower in anticipation of the Fed rate cut, which came on Sept. 18. Since then, though, the 10-year yield has been working its way higher. On the shorter end of the yield curve, the 2-year chart follows a similar pattern. US10Y US2Y 3M mountain Three month performance The hope when the Fed started cutting rates was that shorter-duration Treasurys would move lower at a greater pace than longer-dated ones, providing relief to borrowers and investors. That’s not what has been happening lately. The 2-year and 10-year yields have recently been moving higher together. Rates are like gravity for stocks — the higher the rates, the greater the competition for investment dollars. Elevated, risk-free government bond yields become an enticing way to get returns when compared to the volatility of stocks. A higher 10-year Treasury yield also halts relief on mortgage rates. The average 30-year fixed-rate mortgage, while more than 1 percentage point lower than a year ago, has moved higher three weeks in a row. In Freddie Mac’s latest weekly survey , the 30-year fixed rate was 6.44%. The Fed cutting rates represents an easing of monetary policy, which allows the economy to grow quicker and easier and makes debt more affordable. The downside of those dynamics is that a hotter economy also raises the prospects of sparking inflation again, just as it has started to moderate. Bond traders are worried about rekindling inflation because economic numbers have been coming in stronger since central bankers met in September. The market odds on a quarter-point Fed cut next month remain basically a lock, according to the CME FedWatch tool . But after that, the chances of a December cut are dwindling. A troublesome rebound in inflation, however, is not what we’re calling for, and it’s not what we’re basing the Club’s investment decisions on. Another dynamic pushing bond yields higher is concern over what happens to the national debt and trade deficit under a new presidential administration. Whether the move up in yields is a bet on next month’s election or reflects a that view that regardless of who wins, fiscal policy will remain loose, is anyone’s guess. Both presidential candidates do seem to agree on one thing: The cost of living is too high. A large, unavoidable line item on consumers’ balance sheets is housing costs, which have been one of the stickiest areas of inflation. For home prices to come down, we need more housing supply and lower mortgage rates to incentivize builders and to motivate sellers and buyers. Lots of would-be sellers are sitting on historically low mortgage rates and are reluctant to move, which drives home prices higher. Would-be buyers are reluctant to pay those higher home prices on top of elevated mortgage rates. Increased housing formation based on the Fed lowering rates is key to our investment cases for three stocks in the Club portfolio: Stanley Black & Decker , Home Depot and Best Buy . The bond yields rising and mortgage rates creeping up have pushed back the benefits of the Fed’s easing, as we explained in Tuesday’s small addition of more Home Depot shares. Ultimately, however, fighting the Fed has proved a fool’s errand in the long run — so, we do expect rates to eventually come down. In addition, the management teams at Stanley Black & Decker, Home Depot and Best Buy are executing effectively on the things within their control. Sure, they will benefit from lower rates — but rates alone are not why we own positions. We’re in them because the fundamentals are improving, which will only come further into focus when rates come down. Bottom line The rise in bond yields is not sustainable, in our view, because shorter-duration Treasury yields are bound to come down if the Fed applies enough pressure. The longer end of the curve should then come down and provide the needed relief on mortgage rates. When that happens, you will want to already have the rate-sensitive stocks on the books. We may have been early. But we’re ready. To give up on these names now, right when the Fed has broadcasted that the rate-cutting cycle is in effect, would be a mistake. By the time it becomes clear that the 10-year yield has peaked, you will likely have missed a significant part of the move. (Jim Cramer’s Charitable Trust is long SWK, HD, BBY. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Cars drive past the Federal Reserve building on September 17, 2024 in Washington, DC.

Anna Moneymaker | Getty Images News | Getty Images

Bond traders are at it again, pushing Treasury yields higher and signaling the Federal Reserve was too heavy-handed when it cut interest rates by a half-percentage point last month. The recently rising yields have put pressure on the stock market — and specifically, names in our portfolio tied to housing.

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October 23, 2024

CNBC Daily Open: With an unchanged PPI, the Fed’s near the finish line

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A television station broadcasts the Federal Reserve’s interest-rate cut on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, Sept. 18, 2024.

Michael Nagle | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Winning week for markets
All major U.S. indexes rose Friday on the back of encouraging inflation data and positive earnings from big banks. That gave them a winning week. Asia-Pacific markets mostly traded higher Monday. China’s Shanghai Composite rose around 2% in choppy trading. Over the weekend, Beijing reported a lower-than-expected consumer inflation rate and producer prices falling for September.

Tesla’s Cybercab and Robovan
Tesla shares slumped 8.8% after the company’s “We, Robot” event disappointed investors. At the Thursday night event, CEO Elon Musk unveiled the Cybercab, a two-seater with no steering wheels or pedals, and the Robovan, an autonomous vehicle that has a big capacity. But Musk offered little other details, causing analysts to cast doubt on the company.

More assurances from China
In a press briefing held Saturday, Chinese Minister of Finance Lan Fo’an told reporters the space for Beijing to increase its budget deficit is “rather large,” but the government is still discussing stimulus plans, according to a CNBC translation of the Chinese. Lan also announced measures to support employment and the real estate industry.

Banks’ earnings in good shape
JPMorgan Chase, the biggest bank in the U.S., reported third-quarter earnings and revenue that beat estimates. Net interest income grew 3% from a year ago and helped revenue to increase 6%. Wells Fargo had a decent third quarter. The bank beat estimates for earnings, but unlike JPMorgan, revenue was below expectations and NII decreased.

[PRO] Earnings will show market direction
After the deluge of data such as September’s jobs reports and consumer price index report, earnings will determine the path of markets for the near term. Big banks dominate third-quarter reports this week. It’s Bank of America and Goldman Sachs’ turn on Tuesday, while Morgan Stanley announces its earnings on Wednesday.

The bottom line

It seems like September’s hotter-than-expected inflation reading was indeed a blip.

With a snap of its fingers, the producer price index assuaged worries over inflation remaining stubborn. The index, which measures wholesale prices – and thus generally prefigures changes in the CPI – was unchanged in September from August, defying expectations from a Dow Jones survey of a 0.1% increase.

In fact, last week’s inflation figures looked so promising that Goldman Sachs think the Federal Reserve has just about brought inflation down to its 2% target without crashing the economy, as CNBC’s Jeff Cox reports.

While consumer sentiment dipped slightly in October, according to the University of Michigan’s Survey of Consumers, “long run business conditions lifted to its highest reading in six months,” wrote Joanne Hsu, the survey’s director.

JPMorgan Chase’s third-quarter earnings may be the first taste of that. The biggest bank in America beat estimates on both revenue and earnings. As banks generally reflect the health of the broader economy, it’s a signal things aren’t all bad despite dipping consumer confidence.

Admittedly, earnings reflect what has already happened. Investors care more about what’s going to happen. But consumers are “fine and on strong footing,” as JPMorgan’s CFO Jeremy Barnum told reporters.

Markets cheered the string of positive news.

On Friday, the S&P 500 added 0.61%, the Dow Jones Industrial Average rose 0.97% and the Nasdaq Composite was up 0.33%.

That capped off a winning week for Wall Street – their fifth in a row. The S&P and Nasdaq climbed 1.1%, while the Dow did a bit better with its 1.2% increase for the week.

“What we’re seeing … is a broadening of the market,” said Craig Sterling, head of U.S. equity research at Amundi US.

It’s a reminder that subduing inflation is just a stop toward investors’ real endgame of a healthy stock market.

– CNBC’s Jeff Cox, Samantha Subin and Brian Evans contributed to this story.

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October 13, 2024

CNBC Daily Open: With a stagnant PPI, the Fed’s nearly at the finish line

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Jerome Powell, chairman of the US Federal Reserve, during the National Association of Business Economics (NABE) annual meeting in Nashville, Tennessee, US, on Monday, Sept. 30, 2024.

Seth Herald | Bloomberg | Getty Images

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Winning week for markets
All major U.S. indexes rose Friday on the back of encouraging inflation data and positive earnings from big banks. That gave them a winning week. Europe’s Stoxx 600 index climbed 0.55% to end the week higher. Separately, in August, the U.K. economy expanded 0.2% on a monthly basis after stagnating in June and July, according to flash data from U.K. officials.

Tesla’s Cybercab and Robovan
Tesla shares slumped 8.8% after the company’s “We, Robot” event disappointed investors. At the Thursday night event, CEO Elon Musk unveiled the Cybercab, a two-seater with no steering wheels or pedals, and the Robovan, an autonomous vehicle that has a big capacity. But Musk offered little other details, causing analysts to cast doubt on the company.

More assurances from China
In a press briefing held Saturday, Chinese Minister of Finance Lan Fo’an told reporters the space for Beijing to increase its budget deficit is “rather large,” but the government is still discussing stimulus plans, according to a CNBC translation of the Chinese. Lan also announced measures to support employment and the real estate industry.

Banks’ earnings in good shape
JPMorgan Chase, the biggest bank in the U.S., reported third-quarter earnings and revenue that beat estimates. Net interest income grew 3% from a year ago and helped revenue to increase 6%. Wells Fargo had a decent third quarter. The bank beat estimates for earnings, but unlike JPMorgan, revenue was below expectations and NII decreased.

[PRO] Earnings will show market direction
After the deluge of data such as September’s jobs reports and consumer price index report, earnings will determine the path of markets for the near term. Big banks dominate third-quarter reports this week. It’s Bank of America and Goldman Sachs’ turn on Tuesday, while Morgan Stanley announces its earnings on Wednesday.

The bottom line

It seems like September’s hotter-than-expected inflation reading was indeed a blip.

With a snap of its fingers, the producer price index assuaged worries over inflation remaining stubborn. The index, which measures wholesale prices – and thus generally prefigures changes in the CPI – was unchanged in September from August, defying expectations from a Dow Jones survey of a 0.1% increase.

In fact, last week’s inflation figures looked so promising that Goldman Sachs think the Federal Reserve has just about brought inflation down to its 2% target without crashing the economy, as CNBC’s Jeff Cox reports.

While consumer sentiment dipped slightly in October, according to the University of Michigan’s Survey of Consumers, “long run business conditions lifted to its highest reading in six months,” wrote Joanne Hsu, the survey’s director.

JPMorgan Chase’s third-quarter earnings may be the first taste of that. The biggest bank in America beat estimates on both revenue and earnings. As banks generally reflect the health of the broader economy, it’s a signal things aren’t all bad despite dipping consumer confidence.

Admittedly, earnings reflect what has already happened. Investors care more about what’s going to happen. But consumers are “fine and on strong footing,” as JPMorgan’s CFO Jeremy Barnum told reporters.

Markets cheered the string of positive news.

On Friday, the S&P 500 added 0.61%, the Dow Jones Industrial Average rose 0.97% and the Nasdaq Composite was up 0.33%.

That capped off a winning week for Wall Street – their fifth in a row. The S&P and Nasdaq climbed 1.1%, while the Dow did a bit better with its 1.2% increase for the week.

“What we’re seeing … is a broadening of the market,” said Craig Sterling, head of U.S. equity research at Amundi US.

It’s a reminder that subduing inflation is just a stop toward investors’ real endgame of a healthy stock market.

– CNBC’s Jeff Cox, Samantha Subin and Brian Evans contributed to this story.

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October 13, 2024

The Federal Reserve just cut interest rates by a half point. Here’s what that means for your wallet

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People shop at a grocery store on August 14, 2024 in New York City.

Spencer Platt | Getty Images

The Federal Reserve announced Wednesday it will lower its benchmark rate by a half percentage point, or 50 basis points, paving the way for relief from the high borrowing costs that have hit consumers particularly hard.

The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.

Wednesday’s cut sets the federal funds rate at a range of 4.75%-5%.

A series of interest rate hikes starting in March 2022 took the central bank’s benchmark to its highest in more than 22 years, which caused most consumer borrowing costs to skyrocket — and put many households under pressure.

Now, with inflation backing down, “there are reasons to be optimistic,” said Greg McBride, chief financial analyst at Bankrate.com.

However, “one rate cut isn’t a panacea for borrowers grappling with high financing costs and has a minimal impact on the overall household budget,” he said. “What will be more significant is the cumulative effect of a series of interest rate cuts over time.”

“There are always winners and losers when there is a change in interest rates,” said Stephen Foerster, professor of finance at Ivey Business School in London, Ontario. “In general, lower rates favor borrowers and hurt lenders and savers.”

“It really depends on whether you are a borrower or saver or whether you currently have locked-in borrowing or savings rates,” he said.

From credit cards and mortgage rates to auto loans and savings accounts, here’s a look at how a Fed rate cut could affect your finances in the months ahead.

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. Because of the central bank’s rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — near an all-time high.

Going forward, annual percentage rates will start to come down, but even then, they will only ease off extremely high levels. With only a few cuts on deck for 2024, APRs would still be around 19% in the months ahead, according to McBride.

“Interest rates took the elevator going up, but they’ll be taking the stairs coming down,” he said.

That makes paying down high-cost credit card debt a top priority since “interest rates won’t fall fast enough to bail you out of a tight situation,” McBride said. “Zero percent balance transfer offers remain a great way to turbocharge your credit card debt repayment efforts.”

Mortgage rates

Although 15- and 30-year mortgage rates are fixed, and tied to Treasury yields and the economy, anyone shopping for a new home has lost considerable purchasing power in the last two years, partly because of inflation and the Fed’s policy moves.

But rates are already significantly lower than where they were just a few months ago. Now, the average rate for a 30-year, fixed-rate mortgage is around 6.3%, according to Bankrate.

Jacob Channel, senior economist at LendingTree, expects mortgage rates will stay somewhere in the 6% to 6.5% range over the coming weeks, with a chance that they’ll even dip below 6%. But it’s unlikely they will return to their pandemic-era lows, he said.

“Though they are falling, mortgage rates nonetheless remain relatively high compared to where they stood through most of the last decade,” he said. “What’s more, home prices remain at or near record highs in many areas.” Despite the Fed’s move, “there are a lot of people who won’t be able to buy until the market becomes cheaper,” Channel said.

Auto loans

Even though auto loans are fixed, higher vehicle prices and high borrowing costs have stretched car buyers “to their financial limits,” according to Jessica Caldwell, Edmunds’ head of insights.

The average rate on a five-year new car loan is now more than 7%, up from 4% when the Fed started raising rates, according to Edmunds. However, rate cuts from the Fed will take some of the edge off the rising cost of financing a car — likely bringing rates below 7% — helped in part by competition between lenders and more incentives in the market.

“Many Americans have been holding off on making vehicle purchases in the hopes that prices and interest rates would come down, or that incentives would make a return,” Caldwell said. “A Fed rate cut wouldn’t necessarily drive all those consumers back into showrooms right away, but it would certainly help nudge holdout car buyers back into more of a spending mood.”

Student loans

Federal student loan rates are also fixed, so most borrowers won’t be immediately affected by a rate cut. However, if you have a private loan, those loans may be fixed or have a variable rate tied to the Treasury bill or other rates, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down over a one- or three-month period, depending on the benchmark, according to higher education expert Mark Kantrowitz.

Eventually, borrowers with existing variable-rate private student loans may be able to refinance into a less expensive fixed-rate loan, he said. But refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.

Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.

As a result of Fed rate hikes, top-yielding online savings account rates have made significant moves and are now paying more than 5% — the most savers have been able to earn in nearly two decades — up from around 1% in 2022, according to Bankrate.

If you haven’t opened a high-yield savings account or locked in a certificate of deposit yet, you’ve likely already missed the rate peak, according to Matt Schulz, LendingTree’s credit analyst. However, “yields aren’t going to fall off a cliff immediately after the Fed cuts rates,” he said.

Although those rates have likely maxed out, it is still worth your time to make either of those moves now before rates fall even further, he advised.

One-year CDs are now averaging 1.78% but top-yielding CD rates pay more than 5%, according to Bankrate, as good as or better than a high-yield savings account.

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September 18, 2024

India’s central bank chief plays down fears of a deposit crunch

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Despite widespread bullishness on India, with its stock market highs and healthy bank balance sheets, a shortage of deposits is causing some uneasiness in the country’s financial sector.

Speaking to CNBC in an exclusive interview, Reserve Bank of India (RBI) Governor Shaktikanta Das discussed the issue of slowing growth in bank deposits underperforming an expansion in loans.

There is not cause for concern currently, Das said, but there could be trouble ahead if the situation persists.

“So there is a gap of 350 to 400 basis points,” he said, referencing the difference between credit and deposit growth. Annual figures from August put loan growth at 13.6% with deposit growth at 10.8%, according to Reuters.

“If it persists, then naturally the ability of the banks to continue their lending will get affected,” Das added in the interview Friday.

When lending outpaces deposits, net interest margins — or the difference between what a bank earns on loans and pays out for deposits — take a hit. This could have ramifications for share prices, with many global institutional investors owning shares in Indian banks. In severe cases, it can lead to liquidity issues for banks if they have trouble meeting withdrawal demands.

Das noted that the loans could be being deposited elsewhere, remaining in the banking system, and wouldn't be drawn on the money that might be finding its way into potentially riskier investments, such as debt funds or equity markets.

"If people are going into the capital markets, it is their decision ... we have nothing to say on that," he said.

Axis AMC CIO: Banking earnings to "be more muted" this year

Das added that there was scope for banks to increase their deposits, however. "I am happy to note that most of the banks are today really working on their drawing boards, and they are working on coming out with new products for deposit mobilization."

Speaking on the same subject, Ashish Gupta, CIO at Axis Mutual Fund, said he sees a muted earnings picture for Indian banks compared to the last two years — partly due to this credit-deposit gap.

"I think that is clearly going to be visible. You will see earnings growth for the banks slow down," he told CNBC's Street Signs Asia."

He backed the view that deposit growth would be slower compared to the last couple of years, and highlighted that future rate cuts by the RBI would also have a negative impact on banks' profit margins.

The Chhatrapati Shivaji Terminus railway station in Mumbai, India.

How to invest in India, the world's fastest-growing major economy

India's GDP slowed to 6.7% in the second quarter compared to last year's 8.2%, piling pressure on the central bank to reverse a recent hiking cycle. Markets are currently pricing in a near-95% chance of a rate cut at the RBI's December meeting, with less conviction for the next meeting in October. Das highlighted there will be new members of the Monetary Policy Committee at its October meeting.

"We will discuss and decide in the MPC, but so far as growth and inflation dynamics are concerned, two things I would like to say. One, the growth momentum continues to be good, India's growth story is intact and, so far as inflation outlook is concerned, we have to look at the month-on-month momentum," he said.

He said the decision whether or not to cut rates in October will be based on that.

We are not artificially keeping the Indian Rupee strong, says RBI Governor

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September 16, 2024

The Dark Prince’ iOS Review – Much Better Than Switch, but Lacking in Two Ways – TouchArcade

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Back in December, I reviewed Square Enix’s monster collecting RPG Dragon Quest Monsters: The Dark Prince on Switch. I loved my time with it despite its many technical issues. I expected it to hit PC like Dragon Quest Treasures, another Nintendo Switch exclusive, but I didn’t expect a mobile release. Square Enix’s newest release of Dragon Quest Monsters: The Dark Prince on iOS, Android, and Steam brings all prior paid DLC into the game at a lower entry point, but removes one feature. This is the online real-time multiplayer battles. Beyond that, Dragon Quest Monsters: The Dark Prince on Steam and mobile is already a massively better experience just on value with its lower price point and the content included, but is the game worth your time in this crowded release period and with its premium price? That’s what I aim to answer with my Dragon Quest Monsters: The Dark Prince mobile review also covering the game on Steam Deck.

If you aren’t familiar with Dragon Quest Monsters itself, it is a spin-off series of the main Dragon Quest games featuring turn-based combat, but instead of the main player fighting, you capture, breed, and raise monsters to fight for you. When I played Dragon Quest Treasures, I enjoyed it, but was told that it is a “Monsters-lite” game so when Dragon Quest Monsters: The Dark Prince was announced for Switch, I was excited to play it. I ended up loving it as you can see from my review linked above, but I think it is a very strong monster collecting RPG with turn-based combat regardless of if you like Dragon Quest or not. What made Dragon Quest Monsters: The Dark Prince more interesting, is in how it feels like a side story and prequel to Dragon Quest IV. Dragon Quest Monsters: The Dark Prince also had a seasonal feature where the monsters changed depending on the season and area you’re in.

When it comes to the story, Dragon Quest Monsters: The Dark Prince, the bits from IV already made it more interesting than the usual spin-off, but I found myself focusing more on getting my own dream monster party rather than worrying about the narrative. I’m super pleased with how well thought out the mechanics are and how the large zones, hundreds of monsters, and combat made me want to keep playing it more even on Switch when I first beat it let alone now on iPhone, iPad, and Steam Deck. Beyond the normal turn-based battles and recruiting new monsters, Synthesis in Dragon Quest Monsters: The Dark Prince is like Shin Megami Tensei’s fusion, and there is just so much you can do with skills here. The seasons here don’t just change monsters, but also areas you can explore with map changes. This means a water body that you can’t cross will be frozen in one season letting you access a new secret.

Combat in games like this can get monotonous so I’m glad to see the many quality of life features here like the tactics menu that plays out similar to the original Persona 3, direct commands, and more. You aren’t here to just defeat enemies, but also scout them to bring to your party and become stronger. I didn’t end up testing the online multiplayer on Switch much, so I can’t comment on how big a loss that is here, but it is a game mode being cut nonetheless. If you did play it on Switch, keep that in mind as it is the only area the mobile and Steam versions are lacking compared to Switch.

Dragon Quest Monsters: The Dark Prince already shipped with a lot of content, but the DLC only elevated the experience. This DLC was sold in the Digital Deluxe Edition or as standalone DLC for the base game. Just the DLC was over $25 on Switch, so having the full base game with all DLC included for $24 on mobile makes it an amazing deal, but I’ll get to that in a bit. This DLC included The Mole Hole, Coach Joe’s Dungeon Gym, and Treasure Trunks. The Mole Hole was a dungeon that lets you scout (recruit) monsters you’ve fought before and it made min-maxing a lot easier during the game. The DLC was also good to speed things up since you could also easily scout monsters who only appear during a specific season or through synthesis.

The Coach Joe’s Dungeon Gym DLC has randomly generated maps and they are meant to be postgame challenges rather than experienced while playing the game. The final DLC is just a chest that can be opened once an hour with 10 items in total. This is like a cheat DLC if you may. I didn’t think it was good to have useful game modes or content in paid DLC, but that isn’t a problem anymore with all of it included on iOS, Androidl, and Steam in the base asking price.

Now let’s get to the mobile port features. With Square Enix, you can never be sure what features will make it into the final game. Dragon Quest Monsters: The Dark Prince does not have controller support. This is beyond disappointing since the game is literally a console title ported to mobile. I tried 6 different controllers without any luck to be sure. Aside from controller support, Dragon Quest Monsters: The Dark Prince on iOS has cloud saves and a few graphics options. The cloud saves work well.

When it comes to controls, I was surprised at how well Dragon Quest Monsters: The Dark Prince felt with touch controls. It uses a floating joystick on the left for movement and a jump button mainly while exploring. The one minor issue you might run into is some touch targets being a bit small on the non Plus/Max phones. These aren’t an issue on iPads at all though. The controls feel good, but Square Enix should’ve left full controller support in since this is a console game ported to mobile after all.

One of my only real issues with Dragon Quest Monsters: The Dark Prince on Switch was on the technical side. The frame rate was rough at launch with visuals not being great either. The former got addressed to some degree unlike Pokemon Scarlet & Violet, but the latter never got fixed. On iPhone 15 Pro, iPhone 12, and even iPad Pro, I had no major issues with the visuals or performance. There are some hiccups on iPhone 15 Pro when running at the highest graphics quality setting and moving through some locations, but it isn’t remotely as bad as on Switch. The game feels massively better to play on iOS. Check out the comparison below for the low and high graphics options on iPhone 15 Pro:

There aren’t specific visual or frame rate settings on mobile outside of the resolution option in display settings. This lets you play at low, medium, or high graphical quality options. These presets also affect other settings like the frame rate limit and post-processing. This setting can only be changed from the title screen on mobile while you can adjust it on the fly on PC. I stuck to the high setting on all my iPhones. Dragon Quest Monsters: The Dark Prince sadly has some minor performance issues even on iPhone 15 Pro as I mentioned above. The low setting seems unusable with how blurry it gets. On my 2020 iPad Pro, the high preset has more regular frame drops than iPhone, and it also seems to be running with some tweaked settings. Overall, even the older iPad Pro runs it well, but not as good as iPhone 15 Pro as expected. Every device I tested on including the iPhone 12 ran it a lot better than Nintendo Switch.

Visually, it looks a lot cleaner than Switch even on older iOS devices when played at high. Square Enix didn’t just do a bare-bones port here. It has fullscreen support during gameplay on my iPhone 15 Pro, and even has a pattern or artwork to fill the screen during areas with pre-rendered or static 16:9 elements. This pattern or artwork is mainly used on my iPad Pro since it doesn’t support fullscreen there for gameplay. This also applies to Steam Deck to make up for that aspect ratio in parts. I’m glad to see Square Enix put in the work here to make sure it still looks good regardless of aspect ratio.

Dragon Quest Monsters: The Dark Prince Steam Deck impressions

On Steam Deck, regardless of my settings, I couldn’t get Dragon Quest Monsters: The Dark Prince to run at a locked 90fps even at the low preset when played at 800p. I decided to opt for a 60fps target, and that was a lot easier to achieve. One oddity is the game not letting you adjust resolution when playing on Steam Deck normally. You can do this by forcing the resolution from the game’s properties before launching it. Dragon Quest Monsters: The Dark Prince on PC lets you adjust graphical quality (low, medium, high), anti-aliasing (off, low, medium, high), maximum frame rate (30 to uncapped), toggle v-sync, and adjust display mode (windowed, fullscreen, borderless). If you play at 60fps, I recommend setting your Steam Deck OLED refresh rate to 60 to avoid jitter as well.

Having now played Dragon Quest Monsters: The Dark Prince on iOS, iPadOS, Steam Deck, Switch OLED, and Switch Lite, there’s no doubt that the Switch version is the worst of the lot despite the online mode being removed from mobile and Steam. The massive increase in performance and better visuals with all DLC included at a much lower asking price only makes it better. One thing to note is that the game is marked as Steam Deck Playable and not Verified because Valve says some in-game text is small and may be difficult to read. I didn’t have any issues with this, and I feel like Valve has marked games with smaller text as Verified before. Either way, you can safely buy this one to play on Steam Deck.

If you skipped Dragon Quest Monsters: The Dark Prince on Switch, the new mobile and Steam ports are the way to go. While the mobile version lacking controller support is disappointing, it is still a game I see myself playing regularly with its improvements over switch and fantastic core gameplay loop. Having all the DLC included means you will have enough content to last you even longer. If you do value controller support in a game like this, the Steam Deck is the way to go. Hopefully we see Square Enix keep bringing more Dragon Quest games to mobile in the future. Right now, the iOS version of Dragon Quest Monsters: The Dark Prince is easily one of the best mobile releases of the year.

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Mikhail Madnani

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September 15, 2024

Don’t expect ‘immediate relief’ from the Federal Reserve’s first rate cut in years, economist says. Here’s why

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Recent signs of cooling inflation are paving the way for the Federal Reserve to cut rates when it meets next week, which is welcome news for Americans struggling to keep up with the elevated cost of living and sky-high interest charges.

“Consumers should feel good about [an interest rate reduction] but it’s not going to deliver sizable immediate relief,” said Brett House, economics professor at Columbia Business School.

Inflation has been a persistent problem since the Covid-19 pandemic, when price increases soared to their highest levels in more than 40 years. The central bank responded with a series of interest rate hikes that took its benchmark rate to the highest level in decades.

The spike in interest rates caused most consumer borrowing costs to skyrocket, putting many households under pressure.

“The cumulative progress on inflation — evidenced by the CPI now at 2.5% after having peaked at 9% in mid-2022 — has given the Federal Reserve the green light to begin cutting interest rates at next week’s meeting,” said Greg McBride, chief financial analyst at Bankrate.com, referring to the consumer price index, a broad measure of goods and services costs across the U.S. economy.

However, the impact from the first rate cut, expected to be a quarter percentage point, “is very minimal,” McBride said.

“What borrowers can be optimistic about is that we will see a series of rate cuts that cumulatively will have a meaningful impact on borrowing costs, but it will take time,” he said. “One rate cut is not going to be a panacea.”

Markets are pricing in a 100% probability that the Fed will start lowering rates when it meets Sept. 17-18, with the potential for more aggressive moves later in the year, according to the CME Group’s FedWatch measure.

That could bring the Fed’s benchmark federal funds rate from its current range, 5.25% to 5.50%, to below 4% by the end of 2025, according to some experts.

The federal funds rate, which the U.S. central bank sets, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.

Rates for everything from credit cards to car loans to mortgages will be affected once the Fed starts trimming its benchmark. Here’s a breakdown of what to expect:

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — near an all-time high.

For those paying 20% interest — or more — on a revolving balance, annual percentage rates will start to come down when the Fed cuts rates. But even then they will only ease off extremely high levels, according to McBride.

“The Fed has to do a lot of rate cutting just to get to 19%, and that’s still significantly higher than where we were just three years ago,” McBride said.

The best move for those with credit card debt is to switch to a 0% balance transfer credit card and aggressively pay down the balance, he said. “Rates won’t fall fast enough to bail you out.”

Mortgage rates

While 15- and 30-year mortgage rates are fixed and mostly tied to Treasury yields and the economy, they are partly influenced by the Fed’s policy. Home loan rates have already started to fall, largely due to the prospect of a Fed-induced economic slowdown.

As of Sept. 11, the average rate for a 30-year, fixed-rate mortgage was around 6.3%, nearly a full percentage point drop from where rates stood in May, according to the Mortgage Bankers Association.

But even though mortgage rates are falling, home prices remain at or near record highs in many areas, according to Jacob Channel, senior economist at LendingTree.

“This cut isn’t going to totally reshape the economy, and it’s not going to make doing things like buying a house or paying off debt orders of magnitude easier,” he said.

Auto loans

“Auto loan rates will head lower, too, but you shouldn’t expect the blocking and tackling around car shopping to change anytime soon,” said Matt Schulz, chief credit analyst at LendingTree.

The average rate on a five-year new car loan is now around 7.7%, according to Bankrate.

While anyone planning to finance a new car could benefit from lower rates to come, the Fed’s next move will not have any material effect on what you get, said Bankrate’s McBride. “Nobody is upgrading from a compact to an SUV on a quarter-point rate cut.” The quarter percentage point difference on a $35,000 loan is about $4 a month, he said.

Consumers would benefit more from improving their credit scores, which could pave the way to even better loan terms, McBride said.

Student loans

Federal student loan rates are also fixed, so most borrowers won’t be immediately affected by a rate cut. However, if you have a private loan, those loans may be fixed or have a variable rate tied to the T-bill or other rates, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down as well.

Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less expensive fixed-rate loan, according to higher education expert Mark Kantrowitz.

However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, he said, “such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.” Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.

As a result of the Fed’s string of rate hikes in recent years, top-yielding online savings account rates have made significant moves and are now paying well over 5%, with no minimum deposit, according to Bankrate’s McBride.

With rate cuts on the horizon, those “deposit rates will come down,” he said. “But the important thing is, what is your return relative to inflation — and that is the good news. You are still earning a return that’s ahead of inflation, as long as you have your money in the right place.”

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September 13, 2024

Here are the three most important things to watch in the market this week

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It was a rough start to the historically weak month of September on Wall Street. Economic growth concerns and investor trepidation ahead of Tuesday’s presidential debate and the Federal Reserve’s policy meeting later in the month sank the market. For the week: The S & P 500 gave back over 4% in its worst weekly performance in a year; the Nasdaq plunged more than 5.5%; and the Dow Jones Industrial Average dropped roughly 3%. The sharp selling Friday was partly due to Club name Broadcom ‘s 10% post-earnings stock decline. The chipmaker beat on the quarter but disappointed with guidance , and shares were slammed. It’s a familiar occurrence this earnings season. We thought Broadcom stock was unfairly punished and saw Friday’s weakness as a buying opportunity. Friday’s trading was also complicated by the government’s release of softer monthly job data . August nonfarm payrolls grew by 142,000, well short of expectations of 161,000. The unemployment rate ticked down, as expected, to 4.2%. while wages ticked up slightly more than expected to 3.8% year over year. The employment report sparked worries that the expected soft landing might be in jeopardy. We don’t think so, and Jim Cramer on Friday questioned why big tech stocks, which are not that correlated to the economy, are taking the brunt of the selling. He also said that, unfortunately, the only way to justify the Fed cutting interest rates is to get weak numbers like the nonfarm payrolls reading. The market sees 125 basis points, or 1.25 percentage points, of Fed rate cuts across the year’s three remaining policy meetings, according to the CME FedWatch tool , starting with a 25-basis-point reduction at their Sept. 17-18 gathering. The Fed also meets Oct. 31-Nov. 1 and Dec. 12-13. In the week ahead, investors get two reads on inflation that could sway the Fed, a few stragglers on the earnings front, and a chance to see Democrat Kamala Harris and Republican Donald Trump debate in the lead-up to November’s presidential election. Inflation, inflation : The August consumer price index (CPI) is out Wednesday, and the August producer price index (PPI) is out Thursday. CPI carries more weight because it measures the prices that consumers are paying at the point of sale, which is what the Fed is concerned with most when thinking about interest rate policy. Economists, according to FactSet, are looking for a 2.6% year-over-year increase for headline CPI and a 3.2% year-over-year increase at the core level, which strips out food and energy prices due to their inherent volatility. In addition to the headline and core readings, we are still keeping a close watch on the shelter component. How much Americans pay for housing is a big part of the overall index and the most problematic area for the Fed. That’s because shelter has proven much more sticky than other areas of price inflation. It also remains at a much higher level than the other components of the index. Economists are expecting a year-over-year increase of 1.7% on headline PPI and a 2.4% advance in the core rate. PPI tracks the prices producers pay, also referred to as input costs. While the Fed is more concerned about consumer prices, the PPI is still a crucial report to monitor because input costs dictate selling prices as companies look to protect profit margins. We certainly don’t want to see anything too hot that will spark fears that either corporate profit margins are being squeezed, or that price hikes are coming. Inflation-weary shoppers have only just started to see prices moderate and would be hard-pressed to absorb another round of increases. Consumer resilience is the key to avoiding a recession given two-thirds of the nation’s economy is driven by private consumption. Earnings : No Club stocks are set to report, however, outside the Club, there are two big tech companies and two consumer-related names releasing their results this week After Monday’s close, we get Oracle , which will provide yet another look into the state of data center spending and demand for AI infrastructure. On Thursday morning, we hear from Signet Jewelers , providing a look into the state of consumer discretionary spending. Kroger also reports earnings, which will give us an idea as to the state of food costs. After Thursday’s close, Adobe is out with results, and we’ll be hoping to glean some valuable information in terms of consumer and enterprise demand for generative AI offerings. The debate : Vice President Harris and former President Trump are set to face off Tuesday at the National Constitution Center in Philadelphia. The debate, hosted by ABC News, gives Americans their first chance to see the two candidates square off. The first presidential debate was between President Joe Biden and Trump before Biden dropped out of the race. Pillars of Trump and Harris’ economic plans are starting to emerge from capital gains taxes to corporate tax rates. According to the latest RealClear Politics polling average, Harris has a small lead over Trump. Week ahead Monday, Sept. 9 After the bell earnings: Oracle (ORCL) Tuesday, Sept. 10 After the bell: GameStop (GME), Dave & Buster’s (PLAY), Petco (WOOF) Presidential debate Wednesday, Sept. 11 8:30 a.m. ET: Consumer price index Before the bell: Manchester United (MANU), Designer Brands (DBI) Thursday, Sept. 12 8:30 a.m. ET: Producer price index 8:30 a.m. ET: Initial jobless claims Before the bell: Signet Jewelers (SIG), Kroger (KR) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Traders work on the floor of the New York Stock Exchange during afternoon trading on September 05, 2024 in New York City.

Michael M. Santiago | Getty Images

It was a rough start to the historically weak month of September on Wall Street. Economic growth concerns and investor trepidation ahead of Tuesday’s presidential debate and the Federal Reserve’s policy meeting later in the month sank the market.

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September 8, 2024

Home Sweet Home’ iOS Review – A Great Start, but Needs More Work – TouchArcade

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Harvest Moon: Home Sweet Home has been a very interesting game to follow pre-release. I say this not only because it is a premium mobile-first Harvest Moon game, but also because the reactions from my friends who are longtime fans of the series have gone from apathy to interest with every bit of gameplay shown. Harvest Moon: Home Sweet Home launched recently on iOS and Android as a mobile-exclusive entry in Natsume’s Harvest Moon series, and I’ve been playing it for about a week and a half now on iPhone 15 Pro and iPad Pro for review. Harvest Moon: Home Sweet Home is a very good farming simulation game, but one that is held back by a few issues right now.

A lot of fans of the Harvest Moon series of games from Marvelous have been around since the SNES or N64 days, but I only got into it on 3DS with Story of Season. Back then, I had no idea about the name change and that Marvelous’ releases would be called Story of Seasons while Harvest Moon would be the name used by Natsume going forward. I’m making that clear now because I don’t want people confused about what Harvest Moon: Home Sweet Home is and also to give you my history with the series before getting into how I feel about Harvest Moon: Home Sweet Home ($17.99).

If you’re new to farming and life simulation games, Harvest Moon: Home Sweet Home takes you back from the city to a calming village where you fish, farm, interact with many NPCs, partake in festivals (that need to be unlocked), and even find a companion. The village of Alba, your new home, is dense and cozy (sorry but I had to), and I’m glad it isn’t a big open location because those usually result in a lot of empty spaces when it comes to life simulation games. If you’ve played many in the genre, think of Harvest Moon: Home Sweet Home as one that focuses more on the characters with a bit less depth when it comes to farming.

After a short tutorial explaining the basics of movement and a bit of farming, you unlock the map and main menu letting you save just about anywhere (this is very important for a mobile game), and this is where you get into the flow of Harvest Moon: Home Sweet Home where you try and finish quests for NPCs, upgrade your tools, gather, mine (this unlocks a bit later), and of course farm through the game’s main chapters.

The more I played Harvest Moon: Home Sweet Home, the more I realized that the developers understood what makes life and farming simulation games great, but fell short in some ways. These may or may not affect newcomers to the genre, but those who have played many recent games will find them lacking. The potential partners are likely the weakest aspect of Harvest Moon: Home Sweet Home. They just aren’t as interesting as other games in the genre. If you don’t care about that aspect, Harvest Moon: Home Sweet Home is quite a polished entry in the genre.

Approaching Harvest Moon: Home Sweet Home from a general life simulation game enthusiast’s perspective feels different though. While other platforms are spoiled for choice with tons of games from big and small developers, we don’t really see much like that on mobile, but that doesn’t make up for some of the flaws here, especially at a much higher price point. I think this is a very solid base that the developers can build on to the point where it would even be a great fit for PC and consoles. The only “mobile” aspect of Harvest Moon: Home Sweet Home right now is the touch control option.

Visually, aside from the performance and load times that I will cover below, Harvest Moon: Home Sweet Home looks very good. Some characters look generic, but the interface, farm, building layout, and everything looks good. I also appreciate that Harvest Moon: Home Sweet Home supports fullscreen on iPhone 15 Pro and iPad Pro. It really feels like a game properly tailored to mobile with its visuals and controls.

While Harvest Moon: Home Sweet Home does look nice visually for the most part, it is lacking when it comes to the character designs. This applies to your own character with customization options that should’ve been more detailed and also the main NPCs in the town. A lot of them feel lifeless even during cut-scenes. Barring that, I like the aesthetic a lot, and Harvest Moon: Home Sweet Home looks excellent on my iPhone and iPad. The one disappointment is in performance. Right now, Harvest Moon: Home Sweet Home is capped at 30fps on my iPhone 15 Pro and iPad Pro. I was expecting above 60fps let alone 60fps, but it isn’t possible to play at a higher frame rate now. The load times are also not as fast as they should be.

On the audio side, I was pleased with the music and sounds in Harvest Moon: Home Sweet Home. Nothing stood out to the point where I’d listen to it outside the game, but it sounded good and the music changes were appropriate to the gameplay.

When Harvest Moon: Home Sweet Home was announced as a mobile-exclusive game, I was curious how it would control. The developers have done a fantastic job with the touch controls here letting you play by tapping to move, dragging to move, and more. Interacting with objects or characters, farming, and navigating menus all feel good. Some text and touch targets feel a bit too small on iPhone, but they are fine on iPad. I would’ve loved some haptic feedback on iPhone though for using tools and even fishing. Maybe this can be added in a future update.

If you’ve played the two best life simulation games on mobile: Stardew Valley and My Time at Portia, Harvest Moon: Home Sweet Home feels closer to the former, but it isn’t as polished. I dislike bringing up other games in the same genre to compare, but I’m doing it here specifically for the mobile port. Those two games were built for PC/console and brought over to mobile while Harvest Moon: Home Sweet Home was built for mobile and yet it doesn’t feel as tailored to the platform in its features.

Harvest Moon: Home Sweet Home is a mobile-exclusive game, and while I appreciate the touch control scheme, it has a few issues right now when it comes to features. The lack of cloud saves is beyond disappointing. When I first downloaded Harvest Moon: Home Sweet Home on my iPhone, I played it for about three hours before picking up my iPad to see how it feels there. I found no way to get the save across, and still haven’t been able to move saves across devices. The lack of controller support is also disappointing for a game like this. The developers did a great job with touch controls, but it would be nice to have controller support for when I play on iPad. I would also like some quality of life features for movement, like we’ve seen in recent games in the genre.

As a newcomer to Natsume’s new Harvest Moon games but a fan of all the recent Story of Seasons and other life simulation games, Harvest Moon: Home Sweet Home ended up being worth playing, but it needs a few updates and features to be truly essential at full price. I have no issues with developers wanting to charge premium prices on mobile, but Harvest Moon: Home Sweet Home lacking basic features like cloud saves and controller support definitely makes it harder to recommend alongside a few other design issues. If the developers continue working on this, it will be one of the best in the genre on mobile, and I’m glad to see them take a chance on a premium mobile life simulation game because that is very rare.

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Mikhail Madnani

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September 3, 2024

5 top money moves to consider before the Federal Reserve’s first rate cut since 2020

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Last week, Federal Reserve Chair Jerome Powell all but confirmed that an interest rate cut is coming soon.

“The time has come for policy to adjust,” the central bank leader said in his keynote address at the Fed’s annual retreat in Jackson Hole, Wyoming.

For Americans struggling to keep up with sky-high interest charges, a likely quarter-point cut in September may bring some welcome relief — especially with the right preparation. (A more aggressive half-point move has a roughly a 1-in-3 chance of happening, according to the CME’s FedWatch measure of futures market pricing.)

“If you are a consumer, now is the time to say: ‘What does my spending look like? Where would my money grow the most and what options do I have?'” said Leslie Tayne, an attorney specializing in debt relief at Tayne Law in New York and author of “Life & Debt.”

Currently, the federal funds rate is at the highest level in two decades, in a range of 5.25% to 5.50%.

If the Fed cuts rates in September, as expected, it would mark the first time officials lowered its benchmark in more than four years, when they slashed them to near zero at the beginning of the Covid-19 pandemic.

“From a consumer perspective, it’s important to note that lower interest rates will be a gradual process,” said Ted Rossman, senior industry analyst at Bankrate.com. “The trip down is likely to be much slower than the series of interest rate hikes which quickly pushed the federal funds rate higher by 5.25 percentage points in 2022 and 2023.”

Here are five ways to prepare for this policy shift:

1. Strategize paying down credit card debt

People shop at a store in Brooklyn on August 14, 2024 in New York City.

Spencer Platt | Getty Images

With a rate cut, the prime rate lowers, too, and the interest rates on variable-rate debt — most notably credit cards — are likely to follow, reducing your monthly payments. But even then, APRs will only ease off extremely high levels.

For example, the average interest rate on a new credit card today is nearly 25%, according to LendingTree data. At that rate, if you pay $250 per month on a card with a $5,000 balance, it will cost you more than $1,500 in interest and take 27 months to pay off.

If the central bank cuts rates by a quarter point, you’ll save $21 altogether and be able to pay off the balance one month faster. “That’s not nothing, but it is far less than what you could save with a 0% balance transfer credit card,” said Matt Schulz, chief credit analyst at LendingTree.

Rather than wait for a small adjustment in the months ahead, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a lower-rate personal loan, Tayne said.

2. Lock in a high-yield savings rate

Since rates on online savings accounts, money market accounts and certificates of deposit are all poised to go down, experts say this is the time to lock in some of the highest returns in decades.

For now, top-yielding online savings accounts are paying more than 5% — well above the rate of inflation.

Although those rates will fall once the central bank lowers its benchmark, a typical saver with about $8,000 in a checking or savings account could earn an additional $200 a year by moving that money into a high-yield account that earns an interest rate of 2.5% or more, according to a recent survey by Santander Bank in June. The majority of Americans keep their savings in traditional accounts, Santander found, which FDIC data shows are currently paying 0.46%, on average.

Alternatively, “now is a great time to lock in the most competitive CD yields at a level that is well ahead of targeted inflation,” said Greg McBride, Bankrate’s chief financial analyst. “There is no sense in holding out for better returns later.”

Currently, a top-yielding one-year CD pays more than 5.3%, according to Bankrate, as good as a high-yield savings account.

3. Consider the right time to finance a big purchase

If you’re planning a major purchase, like a home or car, then it may pay to wait, since lower interest rates could reduce the cost of financing down the road.

“Timing your purchase to coincide with lower rates can save money over the life of the loan,” Tayne said.

Although mortgage rates are fixed and tied to Treasury yields and the economy, they’ve already started to come down from recent highs, largely due to the prospect of a Fed-induced economic slowdown. The average rate for a 30-year, fixed-rate mortgage is now just under 6.5%, according to Freddie Mac.

Compared with a recent high of 7.22% in May, today’s lower rate on a $350,000 loan would result in a savings of $171 a month, or $2,052 a year and $61,560 over the lifetime of the loan, according to calculations by Jacob Channel, senior economic analyst at LendingTree.

However, going forward, lower mortgage rates could also boost homebuying demand, which would push prices higher, McBride said. “If lower mortgage rates lead to a surge in prices, that’s going to offset the affordability benefit for would-be buyers.”

What exactly will happen in the housing market “is up in the air” depending on how much mortgage rates decline in the latter half of the year and the level of supply, according to Channel.

“Timing the market is virtually impossible,” he said.

4. Assess the right time to refinance

For those struggling with existing debt, there may be more options for refinancing once rates drop.

Private student loans, for example, tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down as well.

Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less-expensive fixed-rate loan, according to higher education expert Mark Kantrowitz.

Currently, the fixed rates on a private refinance are as low as 5% and as high as 11%, he said.

However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, he added, “such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.” Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Be mindful of potential loan-term extensions, cautioned David Peters, founder of Peters Professional Education in Richmond, Virginia. “Consider maintaining your original payment after refinancing to shave as much principal off as possible without changing your out-of-pocket cash flow,” he said.

Similar considerations may also apply for home and auto loan refinancing opportunities, depending in part on your existing rate.

5. Perfect your credit score

Those with better credit could already qualify for a lower interest rate.

When it comes to auto loans, for instance, there’s no question inflation has hit financing costs — and vehicle prices — hard. The average rate on a five-year new car loan is now nearly 8%, according to Bankrate.

But in this case, “the financing is one variable, and it’s frankly one of the smaller variables,” McBride said. For example, a reduction of a quarter percentage point in rates on a $35,000, five-year loan is $4 a month, he calculated.

Here, and in many other situations, as well, consumers would benefit more from paying down revolving debt and improving their credit scores, which could pave the way to even better loan terms, McBride said.

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August 26, 2024

How to position yourself to benefit from the Fed’s first rate cut in years, according to financial experts

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The Federal Reserve could start lowering interest rates as soon as next month, based on the latest inflation data.

“We think that the time is approaching,” Fed Chair Jerome Powell said at a press conference after the last Federal Open Market Committee meeting in July.

For Americans struggling to keep up with sky-high interest charges, a likely September rate cut may bring some welcome relief — even more so with the right planning.

“If you are a consumer, now is the time to say: ‘What does my spending look like? Where would my money grow the most and what options do I have?'” said Leslie Tayne, an attorney specializing in debt relief at Tayne Law in New York and author of “Life & Debt.”

Fed officials signaled they expect to reduce the benchmark rate once in 2024 and four times in 2025.

That could bring the benchmark fed funds rate from the current range of 5.25% to 5.50% to below 4% by the end of next year, according to some experts.

The federal funds rate is the one at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the rates they see every day on things such as private student loans and credit cards.

Here are five ways to position your finances for the months ahead:

1. Lock in a high-yield savings rate

Since rates on online savings accounts, money market accounts and certificates of deposit are all poised to go down, experts say this is the time to lock in some of the highest returns in decades.

For now, top-yielding online savings accounts are paying more than 5% — well above the rate of inflation.

Although those rates will fall once the central bank lowers its benchmark, a typical saver with about $8,000 in a checking or savings account could earn an additional $200 a year by moving that money into a high-yield account that earns an interest rate of 2.5% or more, according to a recent survey by Santander Bank in June. The majority of Americans keep their savings in traditional accounts, Santander found, which FDIC data shows are currently paying 0.45%, on average.

Alternatively, “now is a great time to lock in the most competitive CD yields at a level that is well ahead of targeted inflation,” said Greg McBride, chief financial analyst at Bankrate.com. “There is no sense in holding out for better returns later.”

Currently, a top-yielding one-year CD pays more than 5.3%, according to Bankrate, as good as a high-yield savings account.

2. Pay down credit card debt

With a rate cut, the prime rate lowers, too, and the interest rates on variable-rate debt — most notably credit cards — are likely to follow, reducing your monthly payments. But even then, APRs will only ease off extremely high levels.

For example, the average interest rate on a new credit card today is nearly 25%, according to LendingTree data. At that rate, if you pay $250 per month on a card with a $5,000 balance, it will cost you more than $1,500 in interest and take 27 months to pay off.

If the central bank cuts rates by a quarter point, you’ll save $21 and be able to pay off the balance one month faster. “That’s not nothing, but it is far less than what you could save with a 0% balance transfer credit card,” said Matt Schulz, chief credit analyst at LendingTree.

Rather than wait for a small adjustment in the months ahead, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a personal loan, Tayne said.

3. Consider the right time to finance a big purchase

If you’re planning a major purchase, like a home or car, then it may pay to wait, since lower interest rates could reduce the cost of financing down the road.

“Timing your purchase to coincide with lower rates can save money over the life of the loan,” Tayne said.

Although mortgage rates are fixed and tied to Treasury yields and the economy, they’ve already started to come down from recent highs, largely due to the prospect of a Fed-induced economic slowdown. The average rate for a 30-year, fixed-rate mortgage is now around 6.5%, according to Freddie Mac.

Compared to a recent high of 7.22% in May, today’s lower rate on a $350,000 loan would result in a savings of $171 a month, or $2,052 a year and $61,560 over the lifetime of the loan, according to calculations by Jacob Channel, senior economic analyst at LendingTree.

However, going forward, lower mortgage rates could also boost homebuying demand, which would push prices higher, McBride said. “If lower mortgage rates lead to a surge in prices, that’s going to offset the affordability benefit for would-be buyers.”

What exactly will happen in the housing market “is up in the air” depending on how much mortgage rates decline in the latter half of the year and the level of supply, according to Channel.

“Timing the market is virtually impossible,” he said.

4. Consider the right time to refinance

For those struggling with existing debt, there may be more options for refinancing once rates drop.

Private student loans, for example, tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means once the Fed starts cutting interest rates, the rates on those private student loans will come down as well.

Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less expensive fixed-rate loan, according to higher education expert Mark Kantrowitz.

Currently, the fixed rates on a private refinance are as low as 5% and as high as 11%, he said.

However, refinancing a federal loan into a private student loan will forgo the safety nets that come with federal loans, he added, “such as deferments, forbearances, income-driven repayment and loan forgiveness and discharge options.” Additionally, extending the term of the loan means you ultimately will pay more interest on the balance.

Be mindful of potential loan -term extensions, cautioned David Peters, founder of Peters Professional Education in Richmond, Virginia. “Consider maintaining your original payment after refinancing to shave as much principal off as possible without changing your out-of-pocket cash flow,” he said.

Similar considerations may also apply for home and auto loan refinancing opportunities, depending in part on your existing rate.

5. Perfect your credit score

Those with better credit could already qualify for a lower interest rate.

When it comes to auto loans, for instance, there’s no question inflation has hit financing costs — and vehicle prices — hard. The average rate on a five-year new car loan is now nearly 8%, according to Bankrate.

But in this case, “the financing is one variable, and it’s frankly one of the smaller variables,” McBride said. For example, a reduction of a quarter percentage point in rates on a $35,000, five-year loan is $4 a month, he calculated.

Here, and in many other situations, as well, consumers would benefit more from paying down revolving debt and improving their credit scores, which could pave the way to even better loan terms, McBride said.

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August 18, 2024

Harris responds to Trump Fed comments, will release economic plan in coming days

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U.S. Vice President and Democratic presidential candidate Kamala Harris speaks with members of the media before boarding Air Force Two at Detroit Metropolitan Wayne County Airport in Romulus, Michigan, U.S., August 7, 2024.

Elizabeth Frantz | Reuters

Vice President Kamala Harris on Saturday fiercely disagreed with former President Donald Trump‘s suggestion this week that U.S. presidents should have a say in the Federal Reserve’s interest rate decisions.

“I couldn’t … disagree more strongly,” Harris told reporters in Arizona, referring to the Republican presidential nominee’s comments. “The Fed is an independent entity, and as president, I would never interfere in the decisions that the Fed makes.”

With just 87 days until the election, the vice president also told reporters that she is preparing to unveil an official economic policy platform in the coming days.

“It’ll be focused on the economy and what we need to do to bring down costs and also strengthen the economy,” said Harris.

Harris’ comments drew a stark contrast between her and Trump, who said this week that the president should “have at least [a] say” in Fed policy.

“I think that in my case, I made a lot of money, I was very successful, and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman,” Trump said Thursday during a press conference at his Mar-a-Lago resort.

The Federal Reserve sets the stage for a rate cut — here’s what that means for your money

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Customer shopping for school supplies with employee restocking shelves, Target store, Queens, New York.

Lindsey Nicholson | UCG | Universal Images Group | Getty Images

Now, as the central bank sets the stage to lower interest rates for the first time in years when it meets again in September, consumers may see their borrowing costs start come down as well — some are already.

The federal funds rate, which the U.S. central bank sets, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates they see every day.

“The first cut will not make a meaningful difference to people’s pocketbooks but it will be the beginning of a series of rate cuts at the end the of this year and into next year that will,” House said.

That could bring the the Fed’s benchmark fed funds rate from the current range of 5.25% to 5.50% to below 4% by the end of next year, according to some experts.

From credit cards and mortgage rates to auto loans and student debt, here’s a look at where those monthly interest expenses stand as we move closer to that initial interest rate cut.

Credit cards

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to more than 20% today — nearing an all-time high.

At the same time, with households struggling to keep up with the high cost of living, credit card balances are also higher and more cardholders are carrying debt from month to month or falling behind on payments.

A recent report from the Philadelphia Federal Reserve showed credit card delinquencies at an all-time high, according to data going back to 2012. Revolving debt balances also reached a new high even as banks reported tightening credit standards and declining new card originations.

For those paying 20% interest — or more — on a revolving balance, annual percentage rates will start to come down when the Fed cuts rates. But even then they will only ease off extremely high levels, offering little in the way of relief, according to Greg McBride, chief financial analyst at Bankrate.com.

“Rates are not going to fall fast enough to bail you out of a bad situation,” McBride said.

The best move for those with credit card debt is to take matters into their own hands, advised Matt Schulz, chief credit analyst at LendingTree.

“They can do that by getting a 0% balance transfer credit card or a low-interest personal loan or by calling their card issuer and requesting a lower interest rate on a card,” he said. “That works more often that you might think.”

Mortgage rates

While 15- and 30-year mortgage rates are fixed and mostly tied to Treasury yields and the economy, they are partly influenced by the Fed’s policy. Home loan rates have already started to fall, largely due to the prospect of a Fed-induced economic slowdown.

The average rate for a 30-year, fixed-rate mortgage is now just below 7%, according to Bankrate.

“If we continue to get good news on things like inflation, [mortgage rates] could continue trending downward,” said Jacob Channel, senior economist at LendingTree. “We shouldn’t expect any gargantuan drops in the immediate future, but we might see rates trending back to their 2024 lows over the coming weeks and months,” he said.

“If all goes really well, we could even end the year with the average rate on a 30-year, fixed mortgage closer to 6% than 6.5% or 7%.”

At first glance, that might not seem significant, Channel added, but “in mortgage land,” a nearly 50 basis-point drop “is nothing to scoff at.”

Auto loans

Auto loans are fixed. However, payments have been getting bigger because the interest rates on new loans are higher, along with rising car prices, resulting in less affordable monthly payments.

The average rate on a five-year new car loan is now just shy of 8%, according to Bankrate.

However, here, “the financing is one variable, and it’s frankly one of the smaller variables,” McBride said. For example, a quarter percentage point reduction in rates on a $35,000, five-year loan is $4 a month, he calculated.

Consumers would benefit more from improving their credit scores, which could pave the way to even better loan terms, McBride said.

Student loans

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by the Fed’s moves. But undergraduate students who took out direct federal student loans for the 2023-24 academic year are paying 5.50%, up from 4.99% in 2022-23 — and the interest rate on federal direct undergraduate loans for the 2024-2025 academic year is 6.53%, the highest rate in at least a decade.

Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are already paying more in interest. How much more, however, varies with the benchmark.

Savings rates

While the central bank has no direct influence on deposit rates, the yields tend to be correlated to changes in the target federal funds rate.

As a result, top-yielding online savings account rates have made significant moves and are now paying as much as 5.5% — well above the rate of inflation, which is a rare win for anyone building up a cash cushion, according to Bankrate’s McBride.

But those rates will fall once the Fed lowers its benchmark, he added. “If you’ve been considering a certificate of deposit, now is the time to lock it in,” McBride said. “Those yields will not get better, so there is no advantage to waiting.”

Currently, a top-yielding one-year CD pays more than 5.3%, as good as a high-yield savings account.

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July 31, 2024

Watch: ECB President Christine Lagarde speaks after rate decision

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European Central Bank President Christine Lagarde is giving a press conference following the bank’s latest monetary policy decision. The central bank left interest rates unchanged on Thursday, after implementing a cut in June.

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July 18, 2024

Gold prices extend gains to hit new record on Fed rate cut optimism

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One kilogram gold bullion at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Friday, Dec. 22, 2023.

Bloomberg | Bloomberg | Getty Images

Gold prices continued to notch new records Wednesday, lifted by increasing conviction that the Federal Reserve will cut interest rates in September following comments from Fed Chair Jerome Powell.

Spot gold prices rose 0.5% to $2,482.29 per ounce, hitting an all-time high according to LSEG data. Gold futures climbed to $2,478.4 an ounce.

On Monday, Powell said the Fed won’t wait for inflation to reach the central bank’s 2% target before it begins cutting, due to the delay in policy effects. He said the Fed is looking for “greater confidence” that inflation will return to the 2% level. The monthly inflation rate dipped in June — the first time in over four years.

And that has given market watchers confidence. According to the CME FedWatch tool, traders are convinced the Fed will cut rates by September. As interest rates fall, gold tends to become more appealing compared to fixed-income assets such as bonds.

“The move has been ignited by signs of slowing inflation. That has been followed up by weak economic data,” ANZ’s senior commodity strategist Daniel Hynes wrote in a note.

Gold prices have been breaching new highs in recent months due to its appeal as a safe-haven asset against the backdrop of escalating Middle East tensions, as well as central banks’ purchase of bullion.

“Gold’s ability to find support in any condition this year is worth highlighting,” said Vivek Dhar, Commonwealth Bank of Australia’s director of mining and energy commodities research.

“These drivers defied a stronger US dollar, which was largely driven by the market delaying expectations of Fed Fund rate cuts,” said the research analyst, adding that gold prices could rise above the bank’s forecast of $2,500 per ounce by the end of the year.

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July 16, 2024

Regional bank earnings reports may not matter as group rips higher on rate cut optimism

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July 16, 2024

3 money moves to make ahead of the Federal Reserve’s first rate cut in years

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Recent signs that inflation is easing have paved the way for the Federal Reserve to start lowering interest rates as soon as this fall.

The consumer price index, a key inflation gauge, dipped in June for the first time in more than four years, the Labor Department reported last week.

“With abundant signs of a cooling economy, the consumer price index for June certainly constitutes the ‘more good data’ on inflation that Fed Chair Jerome Powell has said we need to see before the Fed can begin cutting interest rates,” said Greg McBride, chief financial analyst at Bankrate.com.

With a fall rate cut looking more likely now, households may finally get some relief from the sky-high borrowing costs that followed the most recent series of interest rate hikes, which took the Fed’s benchmark rate to the highest level in decades.

Fed officials signaled they expect to reduce its benchmark rate once in 2024 and four additional times in 2025.

The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the rates they see every day on things such as private student loans and credit cards.

“If you are a consumer, now is the time to say, what does my spending look like? Where would my money grow the most and what options do I have?” said Leslie Tayne, an attorney specializing in debt relief at Tayne Law in New York and author of “Life & Debt.”

Here are three key strategies to consider:

1. Watch your variable-rate debt

With a rate cut, the prime rate lowers, too, and the interest rates on variable-rate debt — such as credit cards, adjustable-rate mortgages and some private student loans — are likely to follow, reducing your monthly payments.

For example, credit card holders could see a reduction in their annual percentage yield, or APR, within a billing cycle or two. But even then, APRs will only ease off extremely high levels.

Rather than wait for a small adjustment in the months ahead, borrowers could switch now to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a personal loan, Tayne said.

Olga Rolenko | Moment | Getty Images

Many homeowners with ARMs, which are pegged to a variety of indexes such as the prime rate, Libor or the 11^th District Cost of Funds, may see their interest rate go down as well — although not immediately as ARMs generally reset just once a year.

In the meantime, there are fewer options to provide homeowners with extra breathing room. “Your better move may be waiting to refinance,” McBride said.

Private student loans also tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means once the Fed starts cutting interest rates, the interest rates on those private student loans will start dropping.

Eventually, borrowers with existing variable-rate private student loans may also be able to refinance into a less expensive fixed-rate loan, according to higher education expert Mark Kantrowitz.

Currently, the fixed rates on a private refinance are as low as 5% and as high as 11%, Kantrowitz said.

2. Lock in savings rates

While borrowing will become less expensive, those lower interest rates will hurt savers.

Since rates on online savings accounts, money market accounts and certificates of deposit are all poised to go down, experts say this is the time to lock in some of the highest returns in decades.

For now, top-yielding online savings accounts and one-year CDs are paying more than 5% — well above the rate of inflation.

The opportunity to earn 5% annually on those cash investments may not last much longer.

Howard Hook

wealth advisor with EKS Associates

“One thing you may want to do is consider investing any idle cash you have into a higher-yielding money market fund,” said certified financial planner Howard Hook, a senior wealth advisor at EKS Associates in Princeton, New Jersey.

“Money market brokerage accounts usually pay higher rates than money market or savings accounts at banks,” he said in an emailed statement. “If the Fed is indeed looking to reduce rates five times over the next eighteen months (as currently projected), then the opportunity to earn 5% annually on those cash investments may not last much longer.”

3. Put off large purchases

If you’re planning a major purchase, like a home or car, then it may pay to wait, since lower interest rates could reduce the cost of financing down the road.

“Timing your purchase to coincide with lower rates can save money over the life of the loan,” Tayne said.

Although mortgage rates are fixed and tied to Treasury yields and the economy, they’ve already started to come down from recent highs, largely due to the prospect of a Fed-induced economic slowdown. The average rate for a 30-year, fixed-rate mortgage is now just above 7%, according to Bankrate.

However, lower mortgage rates could also boost homebuying demand, which would push prices higher, McBride said. “If lower mortgage rates lead to a surge in prices, that’s going to offset the affordability benefit for would-be buyers.”

When it comes to auto loans, there’s no question inflation has hit financing costs — and vehicle prices — hard. The average rate on a five-year new car loan is now nearly 8%, according to Bankrate.

But in this case, “the financing is one variable, and it’s frankly one of the smaller variables,” McBride said. For example, a quarter percentage point reduction in rates on a $35,000, five-year loan is $4 a month, he calculated.

In this case, and in many other situations as well, consumers would benefit more from improving their credit scores, which could pave the way to even better loan terms, McBride said.

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July 15, 2024

Here are 3 major reports that could drive the stock market in the week ahead

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Wall Street finished higher for the holiday-shortened trading week, with tech stocks leading the way. The Dow Jones Industrial Average gained under 1% for the week. The S & P 500 and Nasdaq , which both closed at record highs Friday — rising nearly 2% and 3.5%, respectively, for the week. The first week of July continued the strength seen in June, the second quarter, and the first half of 2024. The S & P 500 technology sector was the big winner this past week, with Apple and Broadcom as our top Club stocks. Consumer discretionary and communication services, featuring Club name Meta Platforms and Alphabet , were also strong. Energy led to the downside this week, followed by health care and industrials. Looking back on the week, short as it was given the early close on Wednesday and Thursday off, we got some notable updates on the economy and heard from Club holding Constellation Brands . The Corona and Modelo brewer’s quarterly results Wednesday were decent , and the stock initially popped on the news. We told members that we were taking some profits in Constellation shortly before the open . However, the troubled wine and spirits business remained a problem that management must address in the coming quarters. Shares finished Wednesday down more than 3%, though they recovered much of that on Friday for a relatively flat week. Helping Friday’s largely higher session was drop in bond yields – precipitated by an uptick in June’s unemployment rate to 4.1% and only modestly higher than expected nonfarm payrolls additions of 206,000. Wage inflation was right in line with expectations. Taken as a whole, the government’s monthly jobs report card supported the case of the Federal Reserve to cut interest rates at its September meeting. While market odds favor a second cut in December, the Fed projected after its June meeting just one rate cut this year. This past week also brought updates on the manufacturing sector. On Monday, June’s ISM Manufacturing purchasing managers index came in weaker than expected and pointed to a faster-than-expected contraction, and on Wednesday, May’s factory order numbers showed a monthly decline versus expectations for a small increase. The ISM’s services PMI for June, out Wednesday, also disappointed, as it showed a contraction in the services sectors. Economists had been expecting to see an expansion. These readings were also green lights for the Fed to start cutting rates. We hope everyone had a good July 4 th and has a restful weekend. You’ll want to take advantage of the lull because believe it or not, earnings season is back. Three of the four big money center banks report this coming Friday, including Club name Wells Fargo . The government also delivers key data on consumer and wholesale inflation. Economic data : The June consumer price index (CPI) is out on Thursday morning, and the June producer price index (PPI) is out on Friday morning. Of the two, CPI carries more weight given that it more closely represents what consumers are paying for a basket of goods from one year, or month, to the next, which is the Fed’s main concern. However, PPI is important to track because it tells us what is happening at the cost input level for corporations. That speaks to margin dynamics – and therefore, it can inform us on both profitability and potential price actions companies may need to take in the future to protect profitability. Within the CPI data, be sure to watch the shelter component, which has been a huge thorn in the Fed’s side. Shelter, a barometer of what people pay for housing, has proven a very sticky source of inflation – a problem because, for most Americans, it represents a large and unavoidable cost. For headline CPI, economists are looking for a 3.1% annual increase, according to FactSet as of Friday. Core CPI, which excludes food and energy prices, is expected to increase 3.5% year over year. If realized, that would represent a slight deceleration at the headline level but a slight acceleration at the core level. As for PPI, economists are looking for a 2.3% annual increase at the headline level and a 2.5% year-over-year rise at the core level. Those numbers would be slightly higher than what we saw in May. Earnings season : Within the portfolio, net interest income (NII) guidance is going to be a key watch item when Wells Fargo reports its quarter this coming Friday. At an industry conference Tuesday, CFO Michael Santomassimo reiterated guidance for NII to be down 7% to 9% year over year. We still think this outlook could be conservative since the Fed’s higher-for-longer policy is generally a tailwind to net interest income. However, other factors like muted loan demand have prevented Wells Fargo from raising its outlook this year. Recognizing strong recent runs in shares of Wells Fargo and our other Club bank Morgan Stanley , we took some profits this past Friday. Morgan Stanley is set to deliver its earnings on Tuesday, July 16. We’re also interested to hear management’s thoughts on the intended pace of share repurchases in the second half of the year, now that the results of the stress test are in. Wells Fargo – and our other bank name Morgan Stanely – both passed, indicating they have strong capital positions with excess money to return to shareholders. Other higher-level watch items in the Wells Fargo report include commentary on the state of consumer savings, an indication of further buying power, and the real estate market, which has been something we’ve been monitoring as the world finds a new normal post-Covid. Monday, July 8 No major events Tuesday, July 9 No major events Wednesday, July 10 No major events Thursday, July 11 8:30 a.m. ET: Consumer price index 8:30 a.m. ET: Initial jobless claims Before the bell earnings: PepsiCo (PEP), Delta Air Lines (DAL), Conagra Brands (CAG) Friday, July 12 8:30 a.m. ET: Producer price index Before the bell: Wells Fargo (WFC), JPMorgan Chase (JPM), Citigroup (C) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

U.S. flag is seen hanging on New York Stock Exchange building on Independence Day In New York, United States on America on July 4th, 2024.

Beata Zawrzel | Nurphoto | Getty Images

Wall Street finished higher for the holiday-shortened trading week, with tech stocks leading the way.

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July 6, 2024

Tag: Prices

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