ReportWire

Tag: United States Department of the Treasury

  • Read the full transcript of Kelly O’Grady’s interview with Treasury Secretary Scott Bessent here

    [ad_1]

    U.S. Treasury Secretary Scott Bessent addressed his department’s ongoing investigation into Federal Reserve Chair Jerome Powell and the administration’s new $1,000 “Trump Accounts” for children born during President Trump’s second term in an interview Wednesday with “CBS Saturday Morning” co-host Kelly O’Grady. Read the full transcript of their conversation below.

    KELLY O’GRADY: Thank you so much, Secretary, for sitting down with us. I want to start on the Trump accounts. Okay? So let’s start broad and quick. What, for families viewing, is your one-sentence pitch on the Trump accounts? 

    SECRETARY SCOTT BESSENT: Well, for the families who have children between January 1st, 2025, and December 31, 2028, you got $1,000 coming from the government that’s going to be invested into an index fund. But for all families with children below age 18, sign up, Trumpaccounts.gov, they’re going to go live July 5th. So even if your child doesn’t get the thousand dollars from the government, you can contribute in tax free. And we’re going to have employers who are contributing, friends, family can contribute. We got some of America’s great philanthropists like Michael and Susan Dell, $6.25 billion, you got Ray Dalio, who adopted children, or sponsoring children in the state of Connecticut, Brad Gerstner, who, this really came from an idea at his dining room table, just announced he’s going to donate to all children below age five. So we think there are 25 million households who are there to sign up, we’ve gotten 600,000 signups just this week, so sign up, and the – start the program.

    O’GRADY: All right. That might have been more than one sentence, but I’ll let it slide because it was good. It was a good explanation, I like it. I want to press you, though on this, this question of the wealth gap, because we’ve heard from critics that, well, let’s say I’m a high-income-earning family, I can keep contributing to that over time as my child grows. But if I’m a low-income family, my child, when they turn 18, may only have $5,000 or so, give or take. So, how are you going to prevent the wealth gap from widening with this program? 

    BESSENT: Well, actually, I think that that is a terrible criticism, and it shows how out of touch anyone who says that is, because if they say only $5,000, these are families, huge number of families in America, wouldn’t have $500 to meet a medical emergency. So how can they say only $5,000? What the hell are they talking about? Doesn’t make any sense. You know, it’s just because President Trump has sponsored it. They don’t agree with it. The other thing, too, is a lot of the contributions, Michael and Susan Dell’s contribution, $6.25 billion across America, is not going to the top 20% economic zip codes. So philanthropists can actually choose. They can choose by zip codes. They can choose by school district. They can do it by economic quintiles. States can get in on the action. So and again, you don’t want a wealth gap. 

    O’GRADY: No. 

    BESSENT: You don’t want a wealth gap. Go to Venezuela. Go to Cuba. Nobody has anything.

    O’GRADY: Okay. So, you know, I cover business, right? So let’s, let’s talk a little bit though about those, those lower income families that maybe don’t have the financial literacy, because I’m going to be honest, it took me a long time to get where I was. What are some of the safeguards in this program that will help educate folks so that when someone does turn 18, you know they are able to utilize this in the right way and benefit? 

    BESSENT: Sure. Great. Great question. I’ve been a big proponent of financial literacy over the years. We are pressing the states. We think, you know, states should be in charge of education. But I believe that by virtue of the accounts existing, we’re going to have a great real-time laboratory. The people are going to want to get up to speed, because you’re going to be able to look at it on your phone. You can sign up on your phone, you can watch the account on your phone. So all of a sudden it’s not some abstract intangible that like, this is what goes on at the corner of Wall Street and Broad Street.  

    O’GRADY: [LAUGHS] Bears. Bulls. Yeah. 

    BESSENT: Yes. And so, but we’re going to push a big amount of financial literacy out of Treasury. We’re going to continually encourage people to update and I think families are going to be very interested. I – we studies have shown that the main impediment is getting the account open, that people who don’t save, they don’t have a vehicle to save is what – my deep, dark secret is I have a Dr. Pepper for breakfast. Not allowed to do it in the house with the children. 

    O’GRADY: Wait, that’s your, that’s your breakfast, Secretary? [LAUGHS] 

    BESSENT: Yeah. [LAUGHS]

    O’GRADY: Breaking news. [LAUGHS] 

    BESSENT: Don’t tell Bobby Kennedy. 

    O’GRADY: All right, all right, all right, well – 

    BESSENT: Don’t tell Bobby Kennedy. But, I, but I, end up at the Circle K on Meeting Street in Charleston, South Carolina. A lot of young workers there. I’m dressed like this. They come up to me, they’re all playing the lottery. And, they say, Mister, if I win the lottery, will you manage my money? And I said, the best thing you can do is not play the lottery. But I couldn’t tell them what else to do with it. Now, you could say, put it in your child’s account and it’ll, it’ll grow over the years. 

    O’GRADY: So I do want to pick up on on that, right. And we’ll get back to the Trump accounts in a minute. But that’s a future thing, right, to your point. There are people in this country like the ones that you just spoke about that are feeling crunched now. And I’ve heard your administration and you say we have a great economy, but you do have folks that aren’t feeling it. The president has said, just give us time. Give us time. Can you tell the American people how long they have to wait? 

    BESSENT: Oh, I, I think, it’s starting to kick in right now. And they should feel crunched. The Biden administration blew out working Americans. Stated inflation was 22-23%, but a friend of mine, Jason Trennert, Strategas Partners, says, something called the Common Man Index. And that’s what working families have. So it’s groceries, insurance, cars, special used cars, rent. And that was up in the 30s. So yes, but they are crunched. So what we’re trying to do, we’re trying to control costs. I think inflation is going to be back toward the Fed target 2%. Rents are down. Energy’s down.

    President’s pushing down prescription drug costs. The other side of that is going to be the real wage growth. We’ve had real wage growth every month that the President’s been in office, as part of the one big beautiful bill, the President’s signature policies, no tax on tips, no tax on overtime, no tax on Social Security, deductibility of American-made auto loans, or the interest on those, that began, it was retroactive for 2025. I’m also the IRS commissioner, we did not give withholding guidance. So we’re going to have substantial tax refunds this year. 

    O’GRADY: I–I actually do want to pick up on that though, because the tax refunds, that is, for folks who are struggling, everyone looks forward to April, not doin– not doing the taxes certainly in my house but the tax refund. The thing though that I’m concerned about and I want your thoughts, if we were to have a shutdown, if Democrats do decide to withhold their votes over ICE funding, how is the IRS going to deal with that during tax season?  

    BESSENT: Well, I think, A, I can’t imagine that the Democrats would be as irresponsible to close us down. And as you said, the Democrats’ shut down. They – they would be irresponsible to close down for the length that they did last time. But I can tell you we’re ready. We have continuous plans in place. It will not affect tax season at all. As a matter of fact, I could say that the cold weather we’ve seen the past two days is more of a hindrance than the shutdown would be at the IRS. So we are fulsome, robust and prepared.  

    O’GRADY:  All right. I do like to hear that, I like my tax refund. You mentioned, you know, inflation, the 2% target. I immediately go, up, the Fed’s target and I would be remiss if I didn’t ask you about the Fed because we do have an interest rate decision this week. 

    BESSENT: Today.  

    O’GRADY: Today. That is right. In a few hours here, the Department of Justice is investigating Fed Chair Powell, what message should that send to future Fed chairs as the president is about to announce who will succeed Powell?

    BESSENT: I think that the message is that independence does not mean no accountability. I’ve been calling for the Fed to do an internal investigation on numerous things since last spring, and they’ve chosen not to do it. The Fed has a very special relationship with the American people because it is the most powerful unappointed group in the U.S., and because of that, they have to be like Caesar’s wife, they have to be beyond reproach. So, if I, if I want a new chair for my office at Treasury, it comes from an appropriation. The Fed, if they overspend on a building, $700 million, a billion, a billion and a half, they just print magic money. So they can print their own money, so you have a responsibility. But again, President has great reverence for the Fed’s independence. But independence does not mean no accountability.

    O’GRADY: Is there – would it be crazy for someone to worry that there would be more accountability, more oversight if interest rates don’t go the way that the president, this president, or, by the way, any future president, wants? 

    BESSENT: Not at all. Because, again, the president’s well aware that it’s a committee, and the committee has 12, 12 voters, the chair’s just one vote. 

    O’GRADY: Fair point. I did want to ask you, you know, something that we’ve heard from our viewers is that there isn’t enough focus on what’s going on here in the U.S, that there’s a focus on, on other countries. And I want to pick up on Venezuela. It’s one that’s been in the news. The oil sales. We’ve recently had an oil sale. Can you confirm where that money has gone from that recent Venezuelan oil sale? 

    BESSENT: Well, it’s going back to the Venezuelan people.

    O’GRADY: Okay. 

    BESSENT: But again, this is very important for the American people because the, the Venezuelan oil is very heavy crude, but very, very necessary for refineries in the southern part of the U.S. So our gasoline prices are driven by that. So the more supply that comes in to those refineries, lower gasoline prices are going to come here. 

    O’GRADY: And that’s fair. I always, on that – when I’m looking at the CPI index, I always look at what energy is doing – 

    BESSENT: Yup. 

    O’GRADY: – because that is a big driver of where things go. Just a couple more questions for you. 

    BESSENT: Of course. 

    O’GRADY: I did want to ask, go back to the Trump accounts for a second. You know, let’s say, 2043. Someone has a baby right now. They sign up for an account. 18 years from now, if that person, when they, they receive that money in that account, if they aren’t able to go out and pay for college, to go buy a home eventually, if it hasn’t really meaningfully changed their ability to do that, would you call this a failure? Or is there a different way that the Treasury measures success in this particular program? 

    BESSENT: Well, first of all, again, as I said, so many Americans couldn’t even meet a $500 emergency. So maybe people just put it away and it’s a rainy day fund. You know, it can be a component. I worked three jobs to put myself through college, so maybe I would just be working two if that happened. And, but again, I think the success of this is going to be, as you just said, on foreign policy, maybe a lot of Americans, like with Venezuela, don’t understand how it affects them. For many Americans, Wall Street is just – 38% of the households who don’t have stocks, Wall Street is this abstract notion. All of a sudden they have participated for 18 years, that, in the financial markets. So as it – it’s a constant financial education.

    O’GRADY: Hm. Yeah I mean – that’s, that’s sort of the reason why I have a job. So I hear you on that. Last question for you, I always like to end on a little bit of a light note when we can. Okay. I have heard you describe yourself as a ninja when it comes to business. So can you level with me? Elon Musk black eye, right hook or left?

    BESSENT: Whoever did it is left-handed.

    O’GRADY: Ah! Are you left-handed, Secretary?

    BESSENT: That’s for the next interview.

    O’GRADY: [laughs]

    BESSENT: But I, I, I think his son X may be. And he said, X, they, uh, did it, so – 

    O’GRADY: He may have a UFC fighter on his hands, then. 

    BESSENT: I think he’d just taken X to UFC – 

    O’GRADY: Yeah. 

    BESSENT: – a couple of weeks before. 

    O’GRADY: All right, Secretary, so appreciate your time today. Thank you. 

    BESSENT: Good to see you.

    In:

    [ad_2]

    Source link

  • Bessent touts Trump Accounts as rainy day fund and slams critics as

    [ad_1]

    U.S. Treasury Secretary Scott Bessent on Wednesday touted the benefits of the Trump administration’s new savings program for U.S. children, telling “CBS Saturday Morning” co-host Kelly O’Grady that the “Trump Accounts” could serve as “a rainy day fund” when those kids reach adulthood.

    The program, created under the Republicans’ “big, beautiful bill” tax and spending law, calls for the federal government to start tax-preferred investment accounts for about 25 million children born between Jan. 1, 2025, and Dec. 31, 2028. The U.S. will seed each account with $1,000, which will be invested in the stock market. 

    “You got $1,000 coming from the government that’s going to be invested into an index fund,” Bessent said, adding that “even if your child doesn’t get $1,000 from the government, you can contribute …in tax free. And we’re going to have employers who are contributing.”

    Philanthropists Michael and Susan Dell have pledged to contribute $250 per child to many of the new accounts, while companies including Bank of America and JPMorgan Chase announced Wednesday that they’ll also chip in $1,000 to accounts opened by the financial giants’ employees.

    “So many Americans couldn’t even [handle a] $500 emergency,” Bessent told O’Grady. “So maybe people just put it away and it’s a rainy day fund. You know, it can be a component” of a bigger purchase or investment. 

    The accounts will remain invested for children until they turn 18, when they can tap the money to pay for qualified expenses, such as education, buying a home or starting a business. 

    Bessent said the accounts, which are limited to contributions of $5,000 per year per child, have drawn 600,000 signups this week alone. Families with children under 18 may also open accounts, although they won’t get the seed money from the federal government.

    Closing the wealth gap?

    Trump Accounts have raised some concerns that they could widen the U.S. wealth gap  — which recently hit an all-time high — because higher-income families could stash the maximum of $5,000 per year in a child’s account, while lower-income households might struggle to contribute funds. 

    Bessent rejects such criticism, noting that the Dells’ $6.2 billion contribution won’t include the wealthiest 20% of U.S. zip codes. 

    “It shows how out of touch anyone who says that is, because if they say only $5,000, these are families — a huge number of families in America — wouldn’t have $500 [for] a medical emergency. So how can they say only $5,000? What the hell are they talking about? It doesn’t make any sense. It’s just because President Trump has sponsored it, they don’t agree with it.”

    Bessent added that philanthropists who want to donate funds for a Trump Account can direct the money to lower-income parts of the U.S. “They can choose by zip codes. They can choose by school district. They can do it by economic quintiles,” he said. 

    The accounts are likely to also help educate Americans about investing, especially the 38% of households that don’t own stocks, Bessent added, noting the importance of financial literacy.

    “For many Americans …  Wall Street is this abstract notion,” Bessent told O’Grady. “All of a sudden they have participated for 18 years in the financial markets. So it’s a constant financial education.”

    Addressing affordability

    Asked about affordability issues that many Americans say they are facing, Bessent blamed the Biden administration for driving up inflation. He also credits President Trump for boosting wage growth, pushing down prescription drug costs and introducing tax cuts through the “big beautiful” bill.

    “What we’re trying to do, we’re trying to control costs,” Bessent said. “I think inflation is going to be back toward the Fed target of 2%.”

    Many Americans have negative views about the cost of living in the U.S., according to a December CBS News poll.

    The Trump administration has introduced a flurry of proposals in recent weeks, in addition to the Trump Accounts, aimed at easing affordability pressures. They include promises to cap credit card interest rates at 10% and ban institutional investors from buying single-family homes. 

    Experts, however, have questioned whether these proposals will achieve their intended objectives.

    Demanding Fed “accountability” 

    Bessent also touched on the independence of the Federal Reserve and defended the Department of Justice’s ongoing investigation into Federal Reserve Chair Jerome Powell, dismissing concerns that the probe could weaken the central bank’s traditional independence.

    “I think that the message is that independence does not mean no accountability,” Bessent said. “I’ve been calling for the Fed to do an internal investigation on numerous things since last spring, and they’ve chosen not to do it.”

    Earlier this month, the Justice Department served the central bank with grand jury subpoenas tied to a criminal investigation into Powell’s June 2025 testimony before a Senate committee regarding a project to renovate several Fed buildings in Washington, D.C.

    Powell responded in a video message, calling the investigation a pretext for weakening the Fed’s independence in setting interest rates. Mr. Trump has already identified several candidates to replace the central bank chief when his term expires in May. 

    Bessent said Wednesday that the Fed must be “beyond reproach” in its dealings, characterizing it as the “most powerful, unappointed group in the U.S.”

    Addressing the DOJ investigation, Bessent said the central bank should be held accountable for its actions.

    “[The] president has great reverence for the Fed’s independence,” he said. “But independence does not mean no accountability.”

    Edited by

    Alain Sherter and

    Aimee Picchi

    In:

    [ad_2]

    Source link

  • U.S. Treasury Secretary pushes for Minnesota fraud crackdown as tensions over ICE efforts flare

    [ad_1]


    U.S. Treasury Secretary Scott Bessent announced the creation of a new IRS task force and other measures to combat fraud, underscoring the Trump administration’s focus on Minnesota amidst the immigration crackdown.

    “Minnesota is going to be the protocols, procedures and investigative techniques and collaboration. Minnesota is going to be the genesis for a national rollout,” Bessent said. “Treasury will deploy all tools to bring an end to this egregious, unchecked fraud and hold perpetrators to account.”

    According to Bessent, the IRS task force will specifically probe financial institutions that facilitate wire transfers, as evidence from the Feeding Our Future trial showed some suspects sent money to banks in Kenya and China. Bessent added that four Twin Cities-based businesses are under investigation, but did not share their names. The department is also requiring all financial institutions in Hennepin and Ramsey counties to report any overseas transfer of $3,000 or more.

    “Think of the absurdity of money being wired from Minnesota by these individuals that could have come from government programs or from excess benefits,” Bessent added. “This should not be wired out of the country and we are going to be cracking down on that.”

    Bessent’s visit also comes on the heels of Attorney General Pam Bondi’s announcement that a team of prosecutors is headed to Minnesota “to reinforce our U.S. Attorney’s Office and put perpetrators of this widespread fraud behind bars.” 

    “We will deliver severe consequences in Minnesota and stand ready to deploy to any other state where similar fraud schemes are robbing American taxpayers,” Bondi said.

    Reached for comment, Minnesota Attorney General Keith Ellison’s office said it “categorically rejects the premise that the ‘underlying reason’ Trump has ordered the outsized presence of ICE in Minnesota is because of fraud,” and said “Ellison does have extensive experience in successfully fighting fraud.”

    “What Donald Trump knows about fraud isn’t fighting it, it’s actually letting fraudsters out of prison,” Ellison’s office added.

    The Associated Press and

    Jonah Kaplan

    contributed to this report.

    [ad_2]

    CBS Minnesota

    Source link

  • What will companies do without pennies? We asked McDonald’s, Wendy’s, Kroger and other top retailers.

    [ad_1]

    The penny appears to have run out of luck.  

    The U.S. Mint in Philadelphia pressed its last circulating penny on Wednesday, after President Trump earlier this year directed the Treasury Department to stop minting new one-cent coins, citing the rising cost of production.

    So, what will companies do if they’re short on change? Here’s what several major chains and retailers told CBS News.

    McDonald’s

    McDonald’s told CBS News that in some locations, customers paying with cash may no longer receive exact change because pennies are increasingly unavailable. Instead, the chain will round totals to the nearest 5 cents for cash transactions.

    This means that if a customer pays with cash at one of these locations, and their order comes out to $10.22, they will pay $10.20. However, if an order comes out to $10.23, then the cash-paying customer will owe $10.25.

    Digital and card payments remain unaffected, McDonald’s said.

    Auntie Anne’s, Cinnabon, Jamba, Carvel

    GoTo Foods, the Georgia-based parent company of Auntie Anne’s, Cinnabon, Jamba and Carvel, among other brands, told CBS News it’s “recommending that franchisees round cash transactions in the guest’s favor.”

    Wendy’s

    Wendy’s is taking a similar approach, telling CBS News: “We have given guidance to our restaurants to round cash transactions down to the nearest nickel if they are experiencing penny shortages.” 

    The company also emphasized that digital orders and card payments are not impacted.

    Kroger

    Kroger told CBS News that “we kindly ask customers to consider providing exact change” if using cash.

    The supermarket chain said it would continue to accept pennies for payment.

    Kwik Trip

    The Midwestern convenience chain has said it will round cash transactions down to the nearest nickel to deal with the penny shortage.

    Giant Eagle

    Pennsylvania-based Giant Eagle supermarkets held a one-day event where customers could exchange their pennies for gift cards worth double the value of the coins, CBS News Pittsburgh reported.

    Giant Eagle said the exchange program will allow the company to collect more pennies to help provide exact change to customers who wish to pay in cash for their purchases.

    “This proactive step allows the company to maintain accuracy and fairness while it awaits formal guidance from the U.S. government regarding future rounding practices,” Giant Eagle said.  

    Sheetz

    The convenience store chain Sheetz has encouraged cashless payments. However, one store offered a promotion where customers who brought in a dollar’s worth of pennies received a free drink.

    Edited by

    Melissa Gaffney

    [ad_2]

    Source link

  • U.S. debt tops $38 trillion for the first time, worsened by government shutdown

    [ad_1]

    The U.S. gross national debt has surpassed $38 trillion for the first time, U.S. Treasury Department data shows.

    The country’s mounting debt comes as the government remains closed, disrupting the economy as hundreds of thousands of federal workers go unpaid. 

    Government shutdowns can boost the national debt because they delay economic activity and postpone fiscal decisions, while pausing federal programs and starting them up again can also increase costs. The Office of Management and Budget estimated that a 2013 U.S. government shutdown cost $2 billion in lost worker productivity. 

    “Reaching $38 trillion in debt during a government shutdown is the latest troubling sign that lawmakers are not meeting their basic fiscal duties,” Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a nonpartisan nonprofit focused on fiscal policy, said in a statement. 

    “If it seems like we are adding debt faster than ever, that’s because we are. We passed $37 trillion just two months ago, and the pace we’re on is twice as fast as the rate of growth since 2000,” he added.

    The longest shutdown in U.S. history, the 35-day stalemate in 2018, cost the economy $11 billion, largely to a reduction in spending by federal workers, according to the Congressional Budget Office. 

    In September, 81% of voters surveyed by the Peterson Foundation highlighted the national debt an issue of concern. According to economists, the growing mountain of debt leads to higher interest costs for the U.S. government. 

    Interest payments on the nation’s debt are forecast to rise from $4 trillion over the past decade to $14 trillion over the next 10 years, curtailing public and private spending in key economic sectors, the Peterson Foundation said. 

    Rising U.S. debt could also undermine investor confidence in the economy, David Kelly, chief global strategist with J.P. Morgan Asset Management, said in a report earlier this month. 

    Credit rating agency Moody’s downgraded the U.S. credit rating in May from its top rating of Aaa to Aa1, reflecting investor concerns about the government’s growing debt. The two other major credit rating agencies, Standard & Poor’s and Fitch Ratings, have also lowered the U.S. rating. 

    Maya MacGuineas, president of the Committee for a Responsible Federal Budget and a prominent voice on the nation’s fiscal policies, also expressed concern at the national debt topping $38 trillion.

    “The reality is that we’re becoming distressingly numb to our own dysfunction. We fail to pass budgets, we blow past deadlines, we ignore fiscal safeguards and we haggle over fractions of a budget while leaving the largest drivers untouched,” she said in a statement. “Social Security and Medicare, for example, are just seven years from having their trust funds depleted — and you don’t hear anything from our political leaders on how to avoid such a disaster.”

    [ad_2]

    Source link

  • Treasury Department may issue $1 Trump coin for 250th anniversary of U.S. independence

    [ad_1]

    The Treasury Department said it is working on a $1 coin featuring President Trump’s image to mark the 250th anniversary of U.S. independence next year, although the design isn’t final.  

    A U.S. Treasury official on Friday shared a preliminary design of the coin featuring Mr. Trump.

    “No fake news here. These first drafts honoring America’s 250th Birthday and @POTUS are real,” U.S. Treasurer Brandon Beach wrote in a social media post on Friday, which included drawings of the coin. “Looking forward to sharing more soon, once the obstructionist shutdown of the United States government is over.”

    U.S. Treasurer Brandon Beach shared the draft of a design of a commemorative $1 coin featuring President Trump’s likeness that the agency may issue to mark the 250th anniversary of U.S. independence. 

    @TreasurerBeach/X


    The obverse, or heads, side of the coin features Mr. Trump’s profile, while the tails side depicts the president with his fist raised and a U.S. flag flying behind him, which is reminiscent of the photo taken after a failed assassination attempt on the president in Pennsylvania last year. The tails side also has the words “fight fight fight” emblazoned over Mr. Trump’s image. 

    In a statement to CBS News, a Treasury spokesperson said the mockup of the coin shared in Beach’s post reflects a draft and that the design isn’t final. The White House didn’t immediately return requests for comment. 

    “While a final $1 dollar coin design has not yet been selected to commemorate the United States’ semiquincentennial, this first draft reflects well the enduring spirit of our country and democracy, even in the face of immense obstacles,” the spokesperson said. “We look forward to sharing more soon.”

    While federal law prohibits the U.S. Treasury from issuing currency with the image of either a living former or current president, there may be more leeway with commemorative coins produced by the U.S. Mint. Currency is produced by the Bureau of Engraving and Printing, while commemorative coins are produced by the U.S. Mint, which is part of the Treasury Department. 

    Regulations also state there must be a two-year period after the death of a former or current president before issuing currency with their likeness. Historically, the restriction is to avoid the appearance of a monarchy, according to the Federal Reserve Bank of San Francisco. 

    Under a 2021 law, the Treasury is authorized to issue $1 commemorative coins to mark the nation’s 250th anniversary. 

    The U.S. Mint has also recently issued commemorative quarters, with the agency announcing in December that it would feature five famous women — all deceased — on the 25-cent coins. They include Ida B. Wells, Juliette Gordon Low, Dr. Vera Rubin, Stacey Park Milbern and Althea Gibson. 

    One coin is on the way out, with the Treasury planning to halt production of the penny because its production costs exceed its face value.

    Aimee Picchi

    Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

    [ad_2]

    Source link

  • How does the Fed influence mortgage rates? Here’s what to know as policymakers consider trimming borrowing costs.

    [ad_1]

    The Federal Reserve is widely expected to lower its benchmark interest rate this week for the first time since December of 2024. A rate cut would give Americans a sliver of relief on a wide range of loans, but would it bring down mortgage rates?

    Average rates for a 30-year fixed-rate mortgage fell to 6.35% this week, its lowest level in nearly a year, as financial markets have preemptively priced in a Fed cut when policymakers meet Sept. 16-17. 

    Borrowing costs on 15-year fixed-rate mortgages — popular with homeowners refinancing their home loans — also fell. The average rate slipped to 5.5% from 5.6% last week. A year ago, it was 5.27%.

    With that in mind, experts say homeowners should not expect an immediate drop in mortgage costs should the central bank officially cut its rate on Thursday. 

    Here’s what to know about how monetary policy affects mortgage rates.

    What influence does the Fed have on mortgage rates?

    The Federal Reserve does not directly impact mortgage rates. Instead, it sets what is known as the federal funds rate — what banks charge each other for overnight loans.

    “The Fed is setting short-term interest rates,” Jake Krimmel, a senior economist at Realtor.com, told CBS MoneyWatch. “Things like the mortgage rates are longer-term interest rates.” 

    While Fed rate cuts directly affect short-term interest rates, such as on certificates of deposit (CDs) and high-yield savings accounts, they also impact the broader lending environment, experts note. 

    Adjustable-rate mortgages, for instance, are more sensitive to changes in the federal funds rate because they are tied to the Secured Overnight Financing Rate (SOFR), a short-term market index. 

    Fixed-rate mortgages, meanwhile, tend to move in the same direction as the bond market, particularly the 10-year Treasury note, because they are both long-term instruments with relatively stable risk, according to the Brookings Institute, a nonprofit public policy organization. 

    “They’re maybe not pressed up against one another, but they’re sort of moving in the same direction,” said Krimmel.

    The upshot is that conventional mortgage loans have terms of 15 to 30 years (adjustable-rate loans have shorter terms), so investors are more focused on the longer-term economic conditions reflected in Treasury rates than in the Fed’s short-term lending horizon. 

    Yields on the 10-year Treasury note bounced around this year due to concerns over tariffs and what the One Big Beautiful Bill Act would mean for the economy, Stephen Kates, an analyst at personal finance website Bankrate, told CBS MoneyWatch. Lenders use the yield on 10-year Treasurys as a guide to pricing home loans. The yield was at 4% Thursday afternoon.

    “Investor sentiments, how bonds are being bought and sold, expectations of inflation are all going to impact those longer-term rates,” Kates said.

    What impact could a Fed cut have on mortgage rates?

    Experts say lenders have already been lowering their rates ahead of a likely rate cut by the Fed. The average rate on both 30-year mortgages and 15-year mortgages have inched down at the same time that several fed governors and Fed Chair Jerome Powell have signaled support for slashing interest rates, Krimmel pointed out.

    Kates agreed. “A lot of the decrease that we’ve seen in the last four to six weeks has been in anticipation by some of this cut,” he said.

    Banks and other enders often lower their rates in anticipation of a Fed cut. In September 2024, for example, mortgage rates declined to a two-year low ahead of what turned out to be an unusually large 0.50 percentage point reduction by Fed officials. This is why the rate offers you see now, at the start of the month, may not look much different from those you see later in September, once the cut is official.

    Fed interest rate policy is just one of the factors that can affect the cost of home loans, note experts. A range of other factors can also play a role, including the rate of inflation, job growth, consumer spending and housing demand, as well as global events and other government policies. 

    Because financial markets are forward-looking, any statements made by Powell on the direction of monetary policy could have more of an impact on the housing market than a rate cut itself, according to Krimmel.

    “That might be where there is actually some action with the bond markets or with mortgage rates, because he might give some hints about where the Fed is headed in the future,” he said.

    The Associated Press

    contributed to this report.

    Mary Cunningham

    Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.

    [ad_2]

    Source link

  • Secretary Yellen meets with Chinese Premier Li in Beijing:

    Secretary Yellen meets with Chinese Premier Li in Beijing:

    [ad_1]

    Treasury Secretary Janet Yellen and Chinese Premier Li Qiang sounded a hopeful note on bilateral relations at the start of their Sunday meeting in Beijing.

    The U.S.-China relationship can only move forward with direct and open communication, Yellen told Li, after arriving in the Chinese capital from the southern city of Guangzhou.

    “The meeting was frank and productive and builds on progress made by President Biden and President Xi at the Woodside Summit last November to deepen bilateral discussions,” a readout from the Treasury Department said, adding that Yellen discussed a level playing field for both American and Chinese workers and business as well as the impacts of Chinese industrial overcapacity on American workers and firms. 

    Overcapacity refers to a situation where Chinese government support to industries fuels production capacity but risks a surge of exports at depressed prices to the global market, undercutting international competitors.

    China US Yellen
    Treasury Secretary Janet Yellen, left, meets Chinese Premier Li Qiang at the Great Hall of the People in Beijing, China, on April 7, 2024.

    Tatan Syuflana / AP


    “As the world’s two largest economies, we have a duty to our own countries and to the world to responsibly manage our complex relationship and to cooperate and show leadership on addressing pressing global challenges,” Yellen said. “I have returned to China at President Biden’s direction following the Woodside Summit to build on the foundation that we have laid.”

    Li, in welcoming Yellen, said “China sincerely hopes that the two countries will be partners, not adversaries”.

    He added that Chinese internet users have closely followed the details of her trip since her appearance in Guangzhou, showing “expectation and hope for the China-US relationship to continue to improve”.

    In Guangzhou, Yellen had a series of meetings including hours of discussions with her counterpart, Vice Premier He Lifeng.

    Washington is especially concerned about this phenomenon in new industries such as electric vehicles and solar energy.

    Yellen’s trip marks her second visit to China in less than a year.

    “While we have more to do, I believe that, over the past year, we have put our bilateral relationship on more stable footing,” she said in opening remarks to Premier Li as she begins two days of high-level talks in Beijing.

    Rather than ignoring differences, this has meant “understanding that we can only make progress if we directly and openly communicate with one another”, the Treasury chief said.

    [ad_2]

    Source link

  • Are I-bonds a good investment now? Here’s what to know.

    Are I-bonds a good investment now? Here’s what to know.

    [ad_1]

    Soaring interest rates in the U.S. have boosted the cost of everything from mortgages to credit cards, socking households still hurting from the high inflation. The silver lining? It’s also significantly boosted interest rates on savings accounts and CDs.

    Another investment savers may want to consider that has benefited from the upward drift in rates is Series I savings bonds, known as “I-bonds.” The U.S. Department of Treasury raised the rate on I-bonds last week to 5.27%, up from 4.35% in January. 

    For more on where savers can get a bigger bang for their buck, See Managing Your Money:

    I-bonds today have “a great interest rate,” WalletHub CEO Odysseas Papadimitriou, the CEO of WalletHub, told CBS MoneyWatch, while noting that buyers should be comfortable holding them for at least five years. That’s because an investor loses the interest generated from the bond over the three months prior to selling it if it’s cashed out before the five-year mark. 

    I-bonds are a good investment as long as inflation remains high, Papadimitriou said. But if the Fed continues to pause its interest rate hike like it did in September, the lure of I-bonds could vanish, he said. 

    “It’s very hard to predict the future,” Papadimitriou said. “If someone had a crystal ball and say ‘Oh look, inflation is going to keep going up for the next few years and it’s not going to come down,’ then maybe an I-bond is a good idea.”

    Typically a niche investment vehicle, I-bonds have exploded in popularity in the last two years as inflation has soared. I-bonds have a minimum amount someone must invest and a maturity date like regular bonds, but their interest rate adjusts twice a year. 

    The Treasury Department changes the interest rate on November 1 and May 1, and the rate is calculated based on the rate of inflation over the previous six months. When the new interest rate is announced, it applies to every I-bond issued prior to the announcement date and is good for six months, until the next rate is set. 

    Buying I-bonds can still a good option for people seeking a safe place to grow their money or if they have a major expense approaching in the next several years, such as a wedding or funding a child’s college education, said Elizabeth Ayoola, a personal finance expert at NerdWallet. She added that it may only make sense if you’re willing to leave your money in an I-bond for five years, given that the interest penalty vanishes at that point.

    “The main key is, how long do you want your money tied up,” she said. “It’s also ideal for people who have a low risk tolerance and are scared that something could happen to their money in the (stock) market.” 

    I-bonds earn interest every month and compound it every six months. However, the interest isn’t actually paid out until the bondholder cashes out the bond, or at the end of its 30-year lifetime.

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

    [ad_2]

    Source link

  • White House blames Republicans for U.S. credit rating downgrade

    White House blames Republicans for U.S. credit rating downgrade

    [ad_1]

    White House blames Republicans for U.S. credit rating downgrade – CBS News


    Watch CBS News



    Fitch Ratings downgraded the U.S. government’s top credit rating on Tuesday. The White House in a statement said they disagreed with the decision and blamed Republicans, who they say were “cheerleading default.” CBS News senior White House correspondent Weijia Jiang reports.

    Be the first to know

    Get browser notifications for breaking news, live events, and exclusive reporting.


    [ad_2]

    Source link

  • Fitch downgraded U.S. debt, and the stock market slid. Here’s what it means.

    Fitch downgraded U.S. debt, and the stock market slid. Here’s what it means.

    [ad_1]

    America’s sovereign debt is considered the gold standard by investors and nations across the globe, with Treasuries viewed as a source of safe and stable returns. But on Tuesday, that sense of security was shaken when credit agency Fitch Ratings cut the nation’s debt from its highest level. 

    The decision roiled markets on Wednesday, with the Dow falling almost 1% and the tech-heavy Nasdaq shedding about 2% of its value. Treasury prices also fell on the downgrade, which Fitch attributed to the nation’s swelling debt, serious fiscal challenges and what it described as a “steady deterioration in standards of governance” in the U.S.

    The ratings cut, the first for U.S. debt in more than a decade, immediately drew objection from the Biden administration, with Treasury Secretary Janet Yellen saying she “strongly disagrees” with Fitch’s rationale. Indeed, the timing of the downgrade may seem puzzling given that the U.S. isn’t currently in a political deadlock over spending, as lawmakers were during debt ceiling negotiations earlier this year, or facing another imminent crisis. 

    The “timing surely caught everyone off guard,” noted Edward Moya, senior market strategist at OANDA, in a note to investors, adding that Fitch had previously warned it could downgrade the nation’s debt. Here’s what experts are saying about the impact of the downgrade. 

    Why did Fitch downgrade U.S. debt? 

    Fitch, which cut the U.S. credit rating a notch from to “AA+”, from its previous “AAA” level, cited long-term challenges facing the nation.

    The agency, which along with rivals like Moody’s and Standard & Poor’s evaluates the creditworthiness for governments and businesses, pointed to the bitter partisan gridlock that has prevailed in Washington in recent decades. 

    “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.

    The most recent of these standoffs came earlier this year over the so-called debt ceiling, when the U.S. risked defaulting as Democrats and Republicans battled over how much the federal government can borrow to pay its debts. Within days of a potentially catastrophic default, GOP lawmakers and President Joe Biden struck a deal to avert a crisis.

    Why did the downgrade happen now?

    Fitch also cited factors including the nation’s “complex budgeting process” and lack of medium-term financial planning. Of course, none of these are immediately pressing issues. But market observers noted that Fitch had warned two months ago that it was considering a downgrade. The firm also cut its rating after a recent Treasury Department announcement that it plans to increase borrowing.

    “Fitch’s downgrade followed the announcement by the U.S. Treasury on Monday, July 31 that it plans to borrow a higher-than-expected $1 trillion in the third quarter and will release the details of its plans on Wednesday,” noted Marc Dizard, chief investment strategist for PNC Asset Management Group, in a report. 

    What does Wall Street think about the downgrade?

    Stocks fell on Wednesday, but Wall Street economists and analysts expect the short-term impact to be muted. 

    “The market reaction so far is a far cry from that in the summer of 2011, when S&P became the first of the three main rating agencies to downgrade its rating of US sovereign debt,” analysts with Capital Economics told investors.

    When S&P cut the U.S. credit rating in 2011, the S&P 500 dropped about 15% with in a month, it noted. Investors may be more focused on Friday’s jobs report, which will inform the Federal Reserve’s decision on whether or not to boost interest rates at its September meeting, the group added. 

    Alec Phillips, chief political economist at Goldman Sachs, told clients that the “downgrade contains no new fiscal information.” Notably, Fitch’s outlook is based on projections from the Congressional Budget Office — not new information that might indicate an near-term deterioration in the the U.S. financial stability. 

    What does the Biden administration say about the cut? 

    Treasury chief Janet Yellen on Wednesday pushed back against the downgrade, calling it “flawed” and “based on outdated data.”

    “Fitch’s decision is puzzling in light of the economic strength we see in the United States,” she added, citing data such as the nation’s low unemployment rate of 3.6% and the 13 million jobs created since January 2021. 

    Have the other credit agencies changed their ratings? 

    Not yet. Moody’s has maintained its rating on U.S. debt at “Aaa.” S&P’s rating remains at AA+, where it left the rating after cutting it in 2011, according to LPL Financial.

    Still, some analysts say that downgrades from other ratings agencies could be in the cards.

    “[C]ontinued fiscal expansion/deficits could result in additional downgrades from rating agencies,” noted Lawrence Gillum, chief fixed income strategist for LPL Financial, in a report. “So, until the U.S. government gets its fiscal house in order, we’re likely going to see additional downgrades.”

    Will Fitch’s downgrade impact people’s investments? 

    Although markets dropped on Wednesday, Wall Street analysts said they don’t believe Fitch’s cut alone is likely to have a near-term impact on financial markets. 

    “While not necessarily wrong in its assessment, the rating downgrade will likely not have an impact on U.S. government debt or markets broadly,” Gillum of LPL said.

    He added, “The U.S. remains the safe haven during times of market stress and the downgrade will likely not change that.”

    Even so, the downgrade, especially if followed by additional ratings agencies, could undermine investors’ faith in U.S. debt and the stability of markets more broadly in the long-term, experts note.

    [ad_2]

    Source link

  • U.S. Treasury chief Janet Yellen pushes China over

    U.S. Treasury chief Janet Yellen pushes China over

    [ad_1]

    Beijing — U.S. Treasury Secretary Janet Yellen, in Beijing for meetings with top Chinese officials and American companies that do business in the country, said the U.S. welcomes healthy economic competition with China, but only if it’s fair. Yellen also said she was concerned about new export controls announced by China on two critical minerals used in technologies like semiconductors.

    “We are still evaluating the impact of these actions,” she said, “but they remind us of the importance of diversified supply chains.”

    Her message to company representatives, including from corporate giants such as Boeing and Bank of America that have significant operations in China, was that the U.S. government understands it’s not been an easy time.

    “I’ve been particularly troubled by punitive actions that have been taken against U.S. firms,” the Treasury chief said, referring to raids carried out in the spring by police on three companies that the Chinese government — without offering any evidence — said were suspected of spying.


    Chinese authorities raided 3 firms gathering information on Chinese companies for investors

    02:37

    But in spite of some friction and chilly Beijing-Washington relations overall, U.S.-China trade is booming. It reached an all-time high in 2022, with everything from iPhones to solar panels and soybeans creating an eye-watering $700 billion in trade.

    At that level, the economic ties are crucial to both countries, and as Yellen told the second-most powerful man in China on Friday afternoon, they need protecting. 

    CHINA-US-DIPLOMACY
    Chinese Premier Li Qiang shakes hands with U.S. Treasury Secretary Janet Yellen during a meeting at the Great Hall of the People in Beijing, China, July 7, 2023.

    MARK SCHIEFELBEIN/POOL/AFP/Getty


    She defended “targeted actions” taken by the U.S., a reference to limits on the export of some advanced processor chips and other high-tech goods to China, saying they were necessary for national security reasons.

    “You may disagree,” she told Chinese Premier Li Qiang. “But we should not allow any disagreement to lead to misunderstandings that needlessly worsen our bilateral economic and financial relationships.”


    U.S. aims to limit China’s access to cloud services ahead of Yellen trip

    04:57

    China’s Finance Ministry said in a statement Friday that it hoped the U.S. would take “concrete actions” to improve the two countries’ economic and trade ties going forward, stressing that there would be “no winners” in a trade war or from the two massive economies “decoupling.”

    Li, who had met Yellen previously, seemed to be in a receptive mood, telling Yellen in welcoming remarks that a rainbow had appeared as her plane landed from the U.S., and “there is more to China-U.S. relations than just wind and rain. We will surely see more rainbows.”

    The goal of Yellen’s trip is to pave the way for more bilateral talks, but she has a tough message to deliver, too: That the U.S. is not prepared to soften its stance on some of the things the Chinese are most angry about, including the controls on the sale of sophisticated U.S. technology to China.  

    Elizabeth Palmer


    Elizabeth Palmer

    Elizabeth Palmer has been a CBS News correspondent since August 2000. She has been based in London since late 2003, after having been based in Moscow (2000-03). Palmer reports primarily for the “CBS Evening News.”

    [ad_2]

    Source link

  • Estimated debt ceiling deadline pushed to June 5 as negotiations continue

    Estimated debt ceiling deadline pushed to June 5 as negotiations continue

    [ad_1]

    Estimated debt ceiling deadline pushed to June 5 as negotiations continue – CBS News


    Watch CBS News



    Treasury Secretary Janet Yellen announced Friday that the estimated deadline that the government could begin to default on its debts has been pushed back from June 1 to June 5, giving negotiators an extra four days to reach a deal on raising the nation’s debt ceiling. House Speaker Kevin McCarthy has expressed optimism that it will get done in time. CBS News congressional correspondent Scott MacFarlane has the latest.

    Be the first to know

    Get browser notifications for breaking news, live events, and exclusive reporting.


    [ad_2]

    Source link

  • Debt ceiling: 3 ways your finances could be affected

    Debt ceiling: 3 ways your finances could be affected

    [ad_1]

    The so-called debt ceiling — the amount the U.S. government can borrow to honor its spending obligations — may seem like an abstract political issue for congressional leaders to deal with, but millions of Americans could suffer very real-world financial hits if the conflict drags on.

    On Thursday, the federal government reached the debt limit of $31.4 trillion, prompting U.S. Treasury Secretary Janet Yellen to invoke “extraordinary measures” that will allow the country to avoid an unprecedented default for at least the next few months. 

    Because U.S. debt is considered the bedrock of the global financial system — party due to its stability — a default could undermine economies worldwide. At home, many Americans would likely see a decline in their wealth as the stock market recoiled, bringing down the value of their 401(k) plans. Social Security beneficiaries and others dependent on government programs might not get their monthly checks.

    “Not raising the debt ceiling can have significant consequences on the economy and on us,” Jill Schlesinger, CBS News business analyst, said on CBS Mornings. “We could see things like delaying Social Security checks. Maybe you won’t get your tax refund on time.”

    Here are three ways Americans could feel the impact of the debt ceiling crisis on their personal finances.

    Stock swoon

    If there’s one thing the stock market dislikes, it’s uncertainty. The longer negotiations over the debt ceiling continue in Congress, the more caution will be voiced by Wall Street about the potential for a worst-case-scenario outcome — an unprecedented default on U.S. debt.

    The last time Congress had a close call with the debt limit was in 2011, when the federal debt stood at $14 trillion and Republicans agreed to a deal to raise the ceiling just days before a default. But investors were rattled even without a default, with the brinkmanship causing stocks to plunge.

    “The last time we had a big impasse the stock market went down by 14% over 4 weeks,” Schlesinger noted, referring to the 2011 negotiations. 

    That would add to investors’ financial woes following last year’s stock market rout, when the S&P 500 plunged more than 19%. 

    Moody’s Analytics chief economist Mark Zandi in 2021 estimated that a U.S. government default would cause the stock market to plunge by one-third and erase $15 trillion in household wealth.

    Surging borrowing costs

    Stocks were’t the only financial asset impacted during the 2011 debt crisis. Because of the conflict, which caused the cost of borrowing to rise, debt-rating agency Standard & Poor’s downgraded U.S. debt for the first time. The lower rating undermined investor confidence in federal notes. 

    A default would likely push rates even higher, said Johns Hopkins University business lecturer Kathleen Day. “The cost to borrow for homes, cars and credit cards would explode,” she said in an email. “In short, default would cause mayhem.”

    Most Wall Street analysts and political pundits consider an outright default unlikely. Still, such an outcome cannot be ruled out, and would come at a time when consumers are already facing higher borrowing costs due to the Federal Reserve’s series of interest rate hikes last year. 

    A debt ceiling-related increase in interest rates could price more people out of the housing market or put big-ticket items such as car purchases out of reach. 

    Cuts to Social Security, Medicare 

    The debt limit fight poses several risks to seniors on Social Security and Medicare. Without a breakthrough in Congress the government might not be able to send out monthly benefit checks or pay for Medicare, the health insurance program for older Americans, if it no longer has money to fulfill its obligations. 

    However, not everyone agrees with this assessment. University of Texas at Austin economist James K. Galbraith, a former staff economist for the House Banking Committee and a former executive director of the Joint Economic Committee of Congress, recently wrote that Social Security, Medicare and other programs are mandated spending. That means by law the U.S. must pay for these benefits. 

    “The U.S. Treasury must follow the law. Debt ceiling or no, it cannot legally default on any obligation,” Galbraith noted. 


    U.S. hits its debt ceiling limit

    05:39

    Still, most Social Security recipients probably aren’t eager to test whether they’ll actually get their checks if the impasse continues. 

    Meanwhile, House Republicans have signaled that they want spending cuts in exchange for agreeing to lift the debt ceiling. Among the ideas that have been discussed is pushing back the retirement age for claiming Social Security benefits to 70, from 66 or 67 today, and delaying the age for claiming Medicare to 67, up from 65. 

    In essence, this would amount to major benefit cuts for Americans, given that they would lose out on two to three years of benefits in each program. Republicans say such cuts are necessary to keep the programs solvent. 

    Experts, however, say there are plenty of other options, such as raising the payroll tax or lifting the cap on earnings that are taxed for Social Security. Currently, income over $147,000 isn’t subject to the payroll tax.

    [ad_2]

    Source link

  • New documents show top Trump officials disregarded concerns by State Dept. officials in relaxing sanctions on Israeli

    New documents show top Trump officials disregarded concerns by State Dept. officials in relaxing sanctions on Israeli

    [ad_1]

    It was one of the final decisions Trump officials made before leaving office. On January 15, 2021, the Treasury Department eased sanctions on Israeli billionaire Dan Gertler, temporarily restoring his access to a web of companies and frozen bank accounts that U.S. officials say he used to bilk more than $1.3 billion in mining revenues from the Democratic Republic of Congo.

    Nearly two years later, CBS News has learned the sign-off came despite strong objections from some senior State Department officials, who, documents suggest, were denied an audience to make their case to then-Secretary of State Mike Pompeo.

    Mike Pompeo and Steven Mnuchin at the White House in 2019
    In this photo from Sept. 10, 2019, Secretary of State Mike Pompeo, left, and Treasury Secretary Steven Mnuchin brief reporters at the White House.

    Mark Wilson / Getty Images


    The Treasury Department must coordinate lifting sanctions with the State Department, among others. Nothing has surfaced indicating the State Department formally objected to easing the sanctions on Gertler and his companies. 

    The documents, obtained via a Freedom of Information Act request by the nonprofit watchdog group Citizens for Responsibility and Ethics in Washington (CREW), also shed further light on the intense lobbying campaign by Gertler and his attorneys, including former FBI Director Louis Freeh and former Trump private attorney Alan Dershowitz, who argued for relieving Gertler of sanctions.

    “I am not aware of any other case where sanctions were essentially removed without a clear factual basis justifying the removal,” said John Smith, who headed the Treasury Department’s Office of Foreign Asset Control in 2017 when Gertler was originally sanctioned. In Smith’s view, “what seemed to be absent in this case was a legal reason to remove these sanctions as opposed to a political basis.”

    Smith said while Gertler wasn’t technically de-listed, he was issued a license that in effect served the same purpose, and allowed the administration to grant him sanctions relief without public disclosure, which he said would have triggered scrutiny.

    Within weeks of inauguration, the Biden administration reimposed broad sanctions on Gertler, citing his “extensive public corruption.”

    Still, Smith said the businessman would have had access to any previously sanctioned bank accounts or property from the moment the license was issued. 

    Gertler declined a request for an interview. However, in response to a CBS News inquiry, a representative for Gertler said “no transactions whatsoever were made and Mr. Getler continued to operate as if no [license] had been granted and the sanctions remained in force.” 

    Dan Gertler
    Dan Gertler in 2012. 

    Simon Dawson/Bloomberg via Getty Images


    Gertler was first sanctioned in 2017 by the Treasury Department, which said the businessman leveraged his relationship with former Congolese President Joseph Kabila to serve as “a middleman” between multinational companies looking to do business with the mineral-rich Congolese state. The department said Gertler “amassed a fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals.” 

    As far back as 2001, Gertler has been accused of propping up the former regime in the Democratic Republic of Congo, or DRC by providing “money, weapons, and military training” in exchange for access to so-called blood or “conflict” diamonds, according to a United Nations report.

    Ambassador J. Peter Pham, who helped devise the sanctions package, told CBS News Gertler’s activities in the DRC extended beyond diamonds to rare metals like cobalt, which are crucial for electric vehicle production.

    “Without the DRC’s cobalt, we don’t have a ‘green tech’ revolution,” said Pham, who served as a special envoy in the Trump administration for the Great Lakes region of Africa. 

    Pham was strongly critical about Gertler’s central role in the mining activities in the DRC and raised those concerns at the State Department. 

    Dan Gertler tours a mine in the Democratic Republic of Congo
    Israeli billionaire Dan Gertler walks through the Katanga Mining Ltd. copper and cobalt mine complex during a tour of the operations in Kolwezi, Democratic Republic of Congo, on Aug. 1, 2012. 

    Simon Dawson/Bloomberg via Getty Images


    Gertler’s representative said he “has never accepted the basis upon which the sanctions were imposed on him, and denies any wrongdoing.” Nevertheless, the representative said “he has at all times abided by them in full, and will continue to do so.” 

    “Like pulling teeth”

    An email obtained by CREW and shared with CBS News says Freeh and Dershowitz were lobbying State Department officials on Gertler’s behalf as early as 2019.

    “They are seeking support and guidance for their forthcoming petition to Treasury to delist Gertler from the Global Magnitsky Act sanction, as imposed in December 2017 for corruption and bribery, e.g., undervaluing mining concessions and then reselling for a huge profit, which supported Kaliba’s continued oppressive reign,” wrote one State Department official to her colleagues.

    In the email, the official said Freeh, Dershowitz and other attorneys working for Gertler argued why he should be relieved of sanctions, including his readiness “to wield his influence in support of US interests in the DRC and against Russia and China.”

    Reached by phone, Dershowitz told CBS News he also met with Trump administration Treasury Secretary Steven Mnuchin “three or four times” on Gertler’s behalf and Mnuchin “seemed to have an open mind.” Dershowitz said the effort included circulating a video Gertler’s team produced showing the businessman’s humanitarian efforts in the DRC.

    “He had completely changed,” Dershowitz said of Gertler. “We were asking for a probationary period to prove that he could continue  to do business in a completely legitimate way.”

    Dershowitz, who said his role was limited to presenting the legal arguments in favor of easing Gertler’s sanctions, denied the issuance of the license was a snap decision made in the final days of the administration.  

    “It was a slow, grueling process, like pulling teeth,” he said. “Eventually though, we succeeded.”

    He said a breakthrough came when the Israeli government got involved, and raised “national security issues” that “went pretty high up” — though Dershowitz said he was “kept out of the loop” on such issues. 

    The New York Times previously reported the U.S. told Israel Gertler’s sanctions would be eased “out of reasons of American national security.” 

    The Embassy of Israel did not respond to a request for comment. 

    Pham said he was also lobbied by Freeh and his associate, and they did not present any national security reasons that would justify relaxing the sanctions on Gertler. 

    “They were speaking in generalities,” said Pham. “They couldn’t give me any specifics of what Gertler had done to change his stripes.”

    Through a spokesperson, Freeh denied any involvement in the licensing application and decision, saying he first learned of this from media reports, but did not respond to a question about the meeting with State Department officials.

    “U.S. credibility has been significantly damaged”

    On Nov. 2, 2020, Assistant Secretary of State Peter Haas, a career official, wrote to Pompeo asking for a meeting. According to the declassified State Department memo, department officials were notified in October 2020 by counterparts in the Treasury Department that it would approve Gertler’s license “absent State’s objection.” Markings on the memo suggest Pompeo declined to take the meeting.

    A second memo suggests Gertler was granted not one, but two licenses in the waning days of the Trump administration. The first, in November 2020, allowed Gertler to distribute “$10 million of his wealth through the DRC for what he claims are charitable purposes” and the second, in January 2021, provided him “sweeping sanctions relief.”

    The January 2021 license was first reported by another nonprofit watchdog group, The Sentry, and was issued at the same time Dershowitz was advising Trump on his impeachment legal defense in the wake of the Jan. 6 attack on the Capitol. Dershowitz said he never spoke with Trump about Gertler. 

    On Jan. 29, 2021, eight days after Joe Biden took office, Haas urged Pompeo’s successor, Secretary of State Antony Blinken to revoke the two licenses.

    “These licenses provide Gertler significant opportunities to exert malign influence in the DRC in a way that would undermine U.S. interests,” Haas wrote in a declassified memo, adding, “U.S. credibility has been significantly damaged.”

    The State Department declined to make Haas available for comment. In March, after Biden took office, the Department revoked the licenses.

    Gertler’s representative said he was “legally entitled to petition for delisting” and that the temporary license “was granted on its merits” and in accordance with the law. 

    In a request sent to the inspectors general at the State and Treasury Departments Friday, CREW asked for an investigation into whether Pompeo and Mnuchin may have violated sanctions laws and into any transactions Gertler executed while the licenses were in place.

    A spokesperson for Mnuchin told CBS News the former Treasury Secretary cannot discuss deliberations concerning any specific past action taken by the arm of the department that handles sanctions. A spokesperson for Pompeo did not respond to questions about his role. 

    Pham said he’s worried the U.S. government has sent a message to bad actors that they might be able to get relief if they hire the right lobbyists.  

    “It certainly took a bite out of the fear of sanctions,” he said.  

    [ad_2]

    Source link

  • Janet Yellen says FTX collapse shows cryptocurrencies are

    Janet Yellen says FTX collapse shows cryptocurrencies are

    [ad_1]

    Treasury Secretary Janet Yellen has told CBS News that the spectacular collapse of cryptocurrency exchange FTX, which sent shockwaves through the crypto world last week with its bankruptcy filing, should serve as a warning to Americans about investing their money in “extremely risky” financial products traded in a space lacking “appropriate supervision and regulation.”

    FTX, one of the world’s largest cryptocurrency exchanges, crumbled in the space of only about one week, and both the company and its former CEO, Sam Bankman-Fried, are now being investigated in the U.S. and other nations for possible securities violations. While the fallout from FTX’s collapse has largely been limited to the crypto finance markets, Yellen joined a rising chorus of experts and officials around the world suggesting the digital currency industry should face more regulation.

    “I think this is a space where investors and consumers should really be very careful,” Yellen told CBS News correspondent Nancy Cordes in a wide-ranging interview in Bali, where the Treasury Secretary was attending the G20 summit alongside President Biden. SHe  

    “We have very strong investor and consumer protection laws for most of our financial markets, but in some ways the crypto space has inadequate regulation.”

    janet-yellen-cordes-g20.jpg
    U.S. Treasury Secretary Janet Yellen, left, speaks with CBS News congressional correspondent Nancy Cordes in Bali, Indonesia, November 15, 2022, on the sidelines of the G20 summit.

    CBS News


    Yellen said the Biden administration had highlighted “regulatory holes that need to be filled for this to be a space where Americans can feel safe doing business,” and blamed the “absence of appropriate supervision and regulation” for the FTX collapse.

    Yellen stressed that she was not in a position to offer Americans specific advice on how they should or should not invest their money, but she called cryptocurrencies “extremely risky assets, and even dangerous in some ways,” and urged people to “be extremely careful about their activities in this space.”

    FTX’s creditors will be first in line to receive whatever assets a bankruptcy judge deems appropriate to distribute as the company seeks to restructure as part of its Chapter 11 filing. Investors in the Bahamas-based company, which had raised some $2 billion in venture capital, will be second in line. That means FTX account holders, who used the platform to trade bitcoin, solana and other digital currencies, may have to wait years to get their money back – if they ever do.

    A “strong, resilient economy” vs inflation

    The Treasury chief described the U.S. economy overall as strong and resilient and said she expected inflation to ease over the coming year with plenty of jobs on offer for Americans, but she warned that the global picture remained “uncertain.”

    “Many countries are really suffering from high energy and food prices, and we have those strains ourselves, but we have a strong, resilient economy,” Yellen told Cordes, calling the U.S. labor market “exceptionally strong.”


    Inflation showed signs of slowing in October

    05:17

    “We continue to create jobs at a very solid pace. Unemployment at almost 50-year lows, and two job openings for every American who’s looking for work,” she said, calling the economic circumstances for country’s households, banks and businesses “by and large solid.”  

    “I expect inflation to come down over time, and Americans are rightly concerned about that, but I believe they’ll be feeling better about it,” she said.

    Diesel “shortages and low inventories”

    One thing that could work against the U.S. inflationary rebound this winter is a limited supply of diesel fuel, which is used both to heat buildings and to move virtually everything Americans buy around the country. Diesel powers most freight trains and trucks, and a global shortage of the fuel has seen prices climb more than 40% over the last year, and they’re still rising.

    One major U.S. supplier’s warning of a “shortage” on the East Coast earlier this month sparked rumors that the fuel could even run out.

    While U.S. inventories of diesel are lower than they have been since 1982, energy market experts told CBS MoneyWatch the tight supplies were no reason to panic, and the U.S. was not going to run out — at least not in the coming weeks, and not unless the global supply chain completely broke down. 

    Indonesia G20
    U.S. Treasury Secretary Janet Yellen attends the Launching of the Pandemic Fund at the 2nd G20 Joint Health and Finance Ministers Meeting ahead of the G20 leaders summit, in Bali, Indonesia, November 13, 2022.

    Dita Alangkara/AP


    Yellen shared that optimism, but cautiously. Asked by Cordes if the U.S. had enough diesel to get through the winter, she said: “Hopefully, I believe there will be,” but acknowledged there would be “some shortages and low inventories” on the East Coast.

    “Hopefully we won’t see a further increase — prices have gone up and we’re monitoring the situation very closely,” she told Cordes, adding that the Biden administration has “had conversations with the oil companies about it.”

    Shift to EVs “reliant on China”?

    President Biden has spoken a lot about his ambition to see half of the vehicles on U.S. roads powered by electricity, not fossil fuels, by 2030, but the Pentagon recently called China’s dominance of the electric vehicle (EV) battery market a major challenge to that goal.

    Most of the raw materials used to make lithium-ion vehicle batteries are produced by China, and Yellen acknowledged that the U.S. and its auto industry have “been reliant on China” thus far.


    Biden unveils $900 million electric vehicle plan

    01:58

    The Treasury Secretary said the Inflation Reduction Act approved by Congress over the summer “contains incentives and provisions that are intended to change that and to diversify our supply chains for battery components.”

    “They are very strong incentives for investment in these minerals in the United States and other allies, so we have a heavy focus on that,” Yellen said, adding that from next year companies that assemble EVs in North America will be “required to source around 40% of minerals, or mineral processing, in the United States or other countries that we have free trade areas with, so over time I expect the situation to change and we will become less reliant on China.”  

    CBS MoneyWatch’s Kristopher J. Brooks and Megan Cerullo contributed to this report.

    Tucker Reals

    Tucker Reals is the CBSNews.com foreign editor, based at the CBS News London bureau.

    [ad_2]

    Source link

  • Surging demand for

    Surging demand for

    [ad_1]

    So many investors are rushing to buy Series I savings bonds ahead of an October 28 deadline to lock in a rate of 9.62% that it crashed a U.S. Treasury Department website selling the securities, which are considered a low-risk hedge against inflation. 

    The Treasury Direct website froze up on Wednesday, while some users on social media reported delays accessing the service and getting their I-bond order processed. The delays could prevent some investors from completing their purchases before this week’s deadline.

    With the deadline fast approaching, the Treasury Department is opening more I-bond accounts each day than it typically creates in a year, according to an agency official. The website, TreasuryDirect, has been around for two decades and wasn’t built for the spike in traffic it’s receiving this week, the official added. Treasury has doubled its server capacity to handle the surge, but the site is still experiencing slowdowns, the agency said.

    I-bonds are typically a niche investment that provide a return based on the Consumer Price Index for All Urban Consumers, an inflation gauge. Because U.S. inflation was at or below 2% for years, they hadn’t provided an attractive return compared with stocks and other investments. 

    That changed as inflation has soared, pushing up the guaranteed rate of return on I-bonds this year to 9.62%. Because the Treasury Department resets the rate for I-bonds every six months, the next adjustment will occur next month. At that point, the I-bond rate will decline to about 6.5% — still respectable, but less eye-popping than the current 9.62% rate. 

    Any bonds issued before October 31 will yield 9.62%, but Treasury has said that people should order by October 28 to allow for the several days it typically takes to issue a bond, which is sparking the rush on the Treasury Direct website. 

    I-bonds come with some significant limitations. First, one person can buy only up to $10,000 worth of bonds a year, with an additional $5,000 allowed if they use a tax refund for the purchase. For married couples, that limit doubles. Parents can also buy I-bonds for their children (under age 18), although they need to set up separate accounts for each kid.

    I-bond buyers also aren’t allowed to redeem them for the first year. After that, you can sell the bond, but that will forfeit the last three months of interest. After five years, investors can sell with no restrictions. 

    [ad_2]

    Source link