(NEW YORK) — Consumer prices rose 3.7% in September compared to a year ago, holding steady from the previous month and running hotter than economists had expected.
While inflation has fallen significantly from a peak of about 9% last summer, price increases remain more than a percentage point higher than the Fed’s inflation target.
The data arrives roughly three weeks before the Fed plans to make its latest rate-hike decision. Last month, the Fed left its benchmark interest rate unchanged, noting that it expects to raise rates one more time this year.
Mixed signals from the economy in recent weeks have complicated the Fed’s effort to bring down inflation while averting a recession, an outcome known as a “soft landing.”
A rapid rise in U.S. government bond yields over recent weeks has elevated borrowing costs for consumers seeking mortgage loans and corporations pursuing funds to expand their business. The jump in borrowing expenses threatens to slow economic activity in the coming months.
However, a blockbuster jobs report on Friday showed that employers added 336,000 jobs in September, exceeding economist expectations by nearly twofold and reversing a monthslong hiring slowdown.
The unemployment rate held steady at 3.8%, a historically low figure, government data showed.
The robust hiring suggests that businesses remain willing to add workers, despite an aggressive series of interest rate hikes over the past year.
The good economic news may pose a difficulty for the Federal Reserve, however, as it tries to cool the economy and slow down price increases.
While the breakneck hiring could alarm central bankers, a simultaneous moderation of wage growth shown by the hiring data could alleviate fears of upward pressure placed on prices in the event of a sharp rise in worker pay.
Wages increased 4.2% on an annual basis last month, exceeding the inflation rate but falling well below the 6% pace recorded in March, data showed.
Despite significant progress over the past year, the Fed remains far from its target inflation rate, Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month.
“The process of getting inflation sustainably down to 2% has a long way to go,” Powell said.
“Given how far we have come, we’re in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks,” Powell added.
(NEW YORK) — Inflation data to be released on Thursday will show whether price increases cooled or accelerated in September, offering the latest snapshot of expenses faced by U.S. households as the Federal Reserve readies to decide another rate hike next month.
Economists expect consumer prices to have increased 3.6% over the year ending in September.
That finding would mark a slight slowdown from the annual inflation rate recorded the previous month but would remain more than a percentage point higher than the Fed’s inflation target.
The data arrives roughly three weeks before the Fed plans to make its latest rate-hike decision. Last month, the Fed left its benchmark interest rate unchanged, noting that it expects to raise rates one more time this year.
Mixed signals from the economy in recent weeks have complicated the Fed’s effort to bring down inflation while averting a recession, an outcome known as a “soft landing.”
A rapid rise in U.S. government bond yields over recent weeks has elevated borrowing costs for consumers seeking mortgage loans and corporations pursuing funds to expand their business. The jump in borrowing expenses threatens to slow economic activity in the coming months.
However, a blockbuster jobs report on Friday showed that employers added 336,000 jobs in September, exceeding economist expectations by nearly twofold and reversing a monthslong hiring slowdown.
The unemployment rate held steady at 3.8%, a historically low figure, government data showed.
The robust hiring suggests that businesses remain willing to add workers, despite an aggressive series of interest rate hikes over the past year.
The good economic news may pose a difficulty for the Federal Reserve, however, as it tries to cool the economy and slow down price increases.
While the breakneck hiring could alarm central bankers, a simultaneous moderation of wage growth shown by the data on Friday could alleviate fears of upward pressure placed on prices in the event of a sharp rise in worker pay.
Wages increased 4.2% on an annual basis last month, exceeding the inflation rate but falling well below the 6% pace recorded in March, data showed.
Inflation stands well below a peak of about 9% last summer, but the Fed remains far from its target rate, Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month.
“The process of getting inflation sustainably down to 2% has a long way to go,” Powell said.
“Given how far we have come, we’re in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks,” Powell added.
(NEW YORK) — FTX founder Sam Bankman-Fried believed in utilitarianism and thought rules against lying or stealing inhibited his ability to maximize the greatest benefit for the most people, his former girlfriend and co-worker testified Wednesday at his federal fraud trial.
“He didn’t think rules like ‘don’t lie’ or ‘don’t steal’ fit into that framework,” Caroline Ellison, Bankman-Fried’s on-again, off-again girlfriend, said.
She said Bankman-Fried’s belief caused her to accept behavior she recognized as wrong.
“I think it made me more willing to do things like lie or steal over time. When I started working at Alameda, I don’t think I would have believed if you told me I would be sending false balance sheets or taking customer money,” Ellison, who served as CEO of Alameda Research, said. “Over time it became something I was more comfortable with.”
Bankman-Fried faces seven counts of fraud, conspiracy and money laundering centered on his alleged use of customer deposits on the crypto trading platform FTX to cover losses at his hedge fund, Alameda Research, and to buy lavish real estate, among other personal expenses.
On the witness stand for a second day Wednesday, Ellison walked the jury through Alameda balance sheets which, by October 2022, showed Bankman-Fried’s private hedge fund owed FTX customers nearly $14 billion.
“We had a lot of risk on and we owed a lot of money to FTX customers,” Ellison said. “We had no way to repay it.”
She said Bankman-Fried thought about trying to raise money from Mohammed bin Salman, the Saudi crown prince, or by selling shares in FTX, which would collapse in bankruptcy the following month, in November 2022.
“I was in a state of dread. I was thinking, worrying, imagining every day what would happen if people tried to withdraw too much money at one time,” she said. “I was imagining all the FTX customers who we worked with who would get hurt by this.”
To shore up Alameda’s precarious financial position Bankman-Fried told Ellison to repay Alameda’s loans with money it borrowed surreptitiously from FTX customers, she testified Wednesday.
“He directed me to continue repaying Alameda’s loans,” Ellison said.
“How?” prosecutor Danielle Sassoon asked.
“By taking money from FTX customer funds,” she replied.
When Sassoon asked her if she knew it was wrong, Ellison replied, “Yeah I thought it was wrong,” but continued to do it because “Sam told me to.”
By that point, Alameda had taken about $10 billion from FTX and Ellison said she worried its lender, Genesis, would find out.
“We had been borrowing increasing amounts of money from FTX customers and I didn’t want Genesis to know that,” Ellison said. “I didn’t want Genesis or others to know that Alameda was borrowing a lot of money from FTX.”
Ellison said Bankman-Fried cautioned her against putting anything in writing, once telling her, “Anything we put on Slack should be something we’re comfortable seeing in The New York Times.”
Ellison also described a “large bribe to Chinese government officials to get some of our trading accounts unlocked.” Alameda had two trading accounts worth about a billion dollars on exchanges based in China, which were both frozen in 2021 as part of a Chinese government investigation into money laundering.
It was a substantial amount of Alameda’s trading capital at the time and Ellison accused Bankman-Fried of saying “that we should send the cryptocurrency transfers” equaling about $100 million.
(NEW YORK) — Mortgage rates stand at their highest level in more than two decades. The average rate for credit card holders tops anything on record at the Federal Reserve. Car loans have returned to 2008 levels, car research group Edmunds found.
Pain-inducing interest rates for just about any loan, experts said, trace to an underlying trend: Rapidly rising U.S. government bond yields.
The yield on a 10-year Treasury bond, or the amount paid to a bondholder annually, stands at about 4.6%, marking nearly a percentage-point jump since June.
“Everything is built up from the Treasury bond yields,” Marti Subrahmanyam, a professor of finance and business at New York University, told ABC News.
Here’s what to know about rising bond yields and what they mean for the finances of average Americans:
Why have bond yields risen so rapidly?
Soaring U.S. government bond yields stem from elevated inflation and the Fed’s ongoing effort to fight it, experts told ABC News.
Since last year, the Fed has put forward an aggressive series of interest rate hikes as it tries to slash price increases by slowing the economy and choking off demand.
A rise in the Fed’s benchmark interest rate closely tracks with increases in short-term Treasury bond yields, which in turn influence yields for long-term Treasury bonds, such as the 10-year Treasury, Jim Bianco, a market analyst at Bianco Research, told ABC News.
“When the Fed raises its rates, other rates move up,” Bianco said.
However, the rate hikes at the Fed — which stretch back to last March — fail to account for the meteoric rise of Treasury bond yields in recent months.
The recent jump in bond yields owes in large part to an acknowledgement among traders that the inflation fight has proven difficult and could force the Fed to keep its benchmark rate elevated for longer than expected, experts said.
Inflation stands well below its peak last year of over 9% but remains more than a percentage point higher than the Federal Reserve’s target rate.
“This more aggressive move in bond yields has coincided with a realization and grudging acceptance that the Fed is going to be keeping interest rates higher for longer and won’t be cutting them anytime soon,” Edward Marrinan, a credit analyst at SMBC Nikko Securities America, told ABC News.
What do high bond yields mean for personal finances?
High bond yields have made borrowing much more expensive for U.S. consumers.
The onset of this financial pain is exemplified by the housing market, where the average interest rate for a 30-year fixed mortgage is about 7.5%, Freddie Mac data shows.
When the Fed initiated the rise of bond yields with its first rate hike of the current series in March 2022, the average 30-year fixed mortgage stood at just 4.45%.
Each percentage point increase in a mortgage rate can add thousands or tens of thousands in additional costs each year, depending on the price of the house, according to Rocket Mortgage.
MORE: Interest rates are at a 22-year high. Here’s what that means for your finances.
“For most people, the biggest loan that they need to take out is a mortgage,” Bianco said. “Mortgage rates are going up and monthly payments are becoming more expensive.”
That holds true for borrowing rates tied to a wide range of other loans, including those for higher education, cars and credit cards, among others.
The impact of bond yields for consumers isn’t entirely negative, however. The trend has increased returns for investors who place their money in financial instruments such as money market funds or high-interest savings accounts, which are typically safer investments than the stock market.
“A lot of people are very happy that they can get a yield again,” Bianco said.
(WASHINGTON) — The Federal Trade Commission is proposing a new rule that seeks to eliminate junk fees — those hidden costs that can unexpectedly push up prices consumers pay at checkout.
The proposed rule would apply to many industries across the economy, including event tickets, hotels and apartment rentals. If the rule goes into effect, companies that continue to charge these fees could be fined and forced to pay back consumers.
The FTC says the far-reaching rule could save consumers “tens of billions of dollars in fees.”
“The proposed rule would prohibit corporations from running up the bills with hidden and bogus fees, requiring honest pricing and spurring firms to compete on honesty rather than deception,” FTC Chair Lina Khan said on a call with reporters.
The FTC estimates the proposed rule will save consumers more than 50 million hours per year of wasted time spent searching for the total price in live ticketing and short-term lodging alone. This time savings is equivalent to more than $10 billion over the next decade.
There will be a 60-day public comment period once the rule is published in the Federal Register.
Senior administration officials, however, did not have guidance on when the rule could be finalized and go into effect.
The FTC has the authority to move forward with this rule without additional approval from Congress, officials said.
As President Joe Biden continues his push of “Bidenomics” and focuses on the everyday costs that hit American pocketbooks, this is another chance for the president to try to appeal to voters about his economic message. He’s repeatedly highlighted his administration’s efforts to tackle these junk fees across a number of sectors — from air travel to health care.
Separately, the Consumer Financial Protection Bureau is issuing guidance to large banks and credit unions, prohibiting them from charging customers fees for basic information about their accounts, like checking their bank account balance.
The CFPB also released a new report showing its crackdown on bounced check fees has saved consumers nearly $2 billion since 2021.
(NEW YORK) — Oil prices have climbed over fears the Israel-Hamas war could embroil the wider petroleum-producing Gulf region and threaten global output.
The global Brent oil benchmark rose nearly 5% in trading on Monday, reversing some of a major decline in recent weeks that had cheered many market onlookers and car drivers.
The price of crude oil holds major implications for the economy and consumers through its direct effect on costs as an input into products ranging from gasoline to plastics.
Even more, crude oil prices manifest in the cost of a much wider range of goods because the production and transport of many products depend on oil, economy and trade analysts told ABC News.
Still, the ultimate impact of the Israel-Gaza war on oil prices remains uncertain, since a significant hike would require the expansion of the conflict to the wider Middle East, they added.
“The market is reacting to fears of a worst-case scenario: That a conflict in Israel magnifies throughout the region and affects global oil trade,” Timothy Fitzgerald, a professor of business economics at Texas Tech University who studies the petroleum industry, told ABC News.
“How realistic is that fear?” Fitzgerald added. “There’s a lot of uncertainty. We’re not sure how this will land.”
Days after reaching a recent low of about $84 a barrel, the Brent crude benchmark price approached $90 a barrel on Monday. In early trading on Tuesday, however, the price fell slightly, suggesting that oil prices had at least temporarily stabilized.
Neither Southern Israel nor the Gaza Strip play host to major oil and gas infrastructure, S&P Global Commodity Insights told ABC News in a statement on Monday.
However, the wider Gulf region is critical for the production and transport of a large share of global oil output. A broad conflict in the area could significantly curtail worldwide oil supply and send prices soaring, the research firm added.
“Global energy markets are closely watching the fallout,” S&P Global Commodity Insights said.
Much of the concern centers on Iran, which funds the terrorist group Hamas that carried out a surprise attack on Israel in recent days that has left at least 900 people dead and 2,600 others injured.
Iran has denied involvement in the attack. Israel and the U.S. have both said that they do not have any hard evidence of a direct Iranian role in the attack.
While sanctions have constrained Iranian oil output in recent years, the nation remains an oil producer and asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply, Fitzgerald said.
“It’s a big choke point,” Fitzgerald said. “In the worst-case scenario, if you were to cut off all of the oil coming out of the Strait of Hormuz it would be a massive shock.”
An expansion of the conflict beyond Israel and the Gaza Strip would push crude oil prices higher but gas prices would not necessarily follow suit, Patrick de Haan, the head of petroleum analysis at GasBuddy, told ABC News.
A seasonal shift from busy summer travel to relatively quiet fall months has cut demand for gasoline, de Haan said. In the event of a prolonged rise in oil prices, the drop off in demand for gasoline could help prevent prices at the pump from rising, de Haan said.
“While crude oil prices play a big role in what we pay at the pump, those seasonal factors disrupt what we pay for gasoline,” de Haan said.
A prolonged environment of elevated oil prices, though, would eventually push gas prices higher, de Haan added. “It would require something extraordinary,” he said.
Beyond gasoline, a large swathe of products could see price increases if oil costs ripple through the production and transport of goods, leading companies to pass along those added expenses to consumers, Fitzgerald said.
Inflation has fallen significantly from a peak last summer but it remains more than a percentage point above normal levels.
A surge in oil prices would complicate the Federal Reserve’s effort to reduce inflation while averting a recession, an outcome known as a “soft landing,” Fitzgerald added.
“This kind of shock makes a soft landing more difficult to achieve,” Fitzgerald said. “It adds another layer of complexity.”
(NEW YORK) — The latest Powerball numbers for Monday’s $1.5 billion prize have been selected, but no one got all of them.
Monday night’s winning numbers were 16, 34, 46, 55, 67 and Powerball number 14. The multiplier was 3.
Powerball updated the results late Monday night to confirm that the draw for the prize — now an estimated $1.73 billion — continues on Wednesday. The cash payout is likely $756 million.
Florida had at least one ticket that matched five and got the power play number, all adding up to a $2 million win. There were match five winners who won $1 million in California, Indiana, Oregon and Virginia.
Monday’s jackpot was the third-largest prize in Powerball history, officials previously said. Wednesday’s prize now becomes the second-largest.
Monday night’s drawing — the 35th in its current run — marked the fourth-largest prize in all U.S. lottery jackpots, Powerball said. Wednesday’s drawing is now the second-largest prize, per Powerball.
Powerball is played in 45 states, the District of Columbia and the U.S. Virgin Islands.
The last billion-dollar Powerball prize — the jaw-dropping $2.04 billion — was won in California in November of last year. The next largest prize — $1.586 billion – was won in January 2016 in California, Florida and Tennessee.
(NEW YORK) — If you’re feeling unseen because you are not doing what others in society are expecting you to do, whether socializing on the weekends, or figuring out life as an adult, that’s where Danny Casale’s art comes to the rescue.
Reaching millions of audiences using his artist name Coolman Coffeedan, Casale’s work revolves around a wholesome idea that he personally believes in. “You know, messaging around how everything’s gonna be okay, how you are loved, you are special, you’re not nearly as ugly as you may think you are,” he told ABC News.
His art has also been featured in prominent exhibitions around the world including K11 Shanghai and Art Basels Hong Kong and Miami Beach, among others. Casale’s work first rose to the public eye after his animation entitled “Snakes Have Legs” went viral in June 2017, amassing over 5 million views on YouTube.
To date, Casale has accumulated hundreds of millions of views on his YouTube channel and over 6 million followers on Instagram and TikTok combined. He also published a book in 2021, called, “Ur Special: Advice for Humans from Coolman Coffeedan.”
Although achieving such success in life sometimes could come at a cost and in Casale’s circumstance, it almost robbed him of his career and identity as an artist.
The NFT creator told ABC News, in March 2022, he learned a multimillion lawsuit was filed against him by DigiArt LLC, a platform which was co-founded by Robert Earl, a billionaire who is also the founder and CEO of Planet Hollywood.
“I almost fainted in my kitchen,” he said. “I was like, ‘What is this?’ It was confusing, because, you know, there were like, incredibly light discussions, six, eight months prior with this company, and no agreement ever came to fruition.”
In the lawsuit, DigiArt LLC, alleged Casale “entered into an agreement” with them which required the two parties “to split net sale proceeds of any of Casale’s NFTs on a 50-50 basis.” The company claimed they spent their resources, including money and time, to promote Casale’s work in the past.
“The only issue is the contract that they were putting out there that was signed, countersign dated, never was, never existed,” Casale told ABC News.
NFT, short for, a non-fungible token is a one-of-a-kind asset that can take the form of virtually any type of online content and is managed in a digital ledger.
Last month, the U.S. District Court in the Middle District of Florida ruled in favor of Casale on a motion for summary judgment after finding no evidence to show the plaintiff and the defendant had entered into an agreement. As a result, the lawsuit was dismissed, according to a press release, issued on Sept. 22.
ABC News has reached out to DigiArt LLC’s representatives for comment.
The verdict offered a huge relief not only to Casale, but also to the creative community. Casale said his story is “nothing new for artists,” adding that he hasn’t seen this specific type of situation being dealt with prior.
“What makes this whole thing, that little extra bit of surreal [is] because it happened in that sliver of time where NFTs were trading millions and millions and millions of dollars every day,” he said.
Turning his darkest moments into wisdom, Casale is urging other artists to be more cautious when it comes to trusting others with their work. “I think the largest lesson for others is to just be very careful about who you let into your special kingdom, because you built it up, you’re the one who made it so special,” he said.
“Don’t make it so easy for the folks that want to come in and ruin all that.”
Moving forward, Casale said he hopes his story will serve as a lesson to others and “can prevent any of that from happening to any other creatives, any other artists, anybody who’s ever built something on their own.”
“At times, it just felt like a fight that was never ending, but I kept fighting,” he shared of his journey. “And I truly hope that in me doing that, any other artists, creatives, anybody who’s built anything that they care about, continues to fight and stand up for themselves. Whether it’s something smaller, bigger than this, whatever, I mean, use my case as fuel for you and your specific situation to know that you deserve to stand up for yourself.”
Casale said his art “preached that the world is mostly good,” and he explained going through the experience such as the lawsuit “definitely challenged a lot of my own personal beliefs and philosophy that comes with my animations.”
“But now I get to just double down on my messages that now I believe stronger than ever, that the world is truly a good place,” he continued. “And I truly believe that at the end of the day, love would win and love won… It may take a minute, and you might have to meet some nasty characters along the way. But I truly believe that love wins in the end.”
(NEW YORK) — No Powerball jackpot winner was declared in Saturday’s Powerball drawing which means the prize has soared to an estimated $1.55 billion for the next drawing.
The winning numbers drawn for Saturday’s jackpot were: 47, 54, 57, 60, 65 and red Powerball 19. The power play was 3.
The Powerball jackpot was last hit in the July 19, 2023 drawing. There have now been 34 consecutive drawings with no jackpot wins. This is the first time back-to-back Powerball jackpot cycles have generated billion-dollar grand prizes.
“This has become another top-charting jackpot in the Powerball game, and we’ve had several factors align at the right time to be able to support back-to-back billion-dollar jackpots in a matter of months,” said Drew Svitko, Powerball product group chair and Pennsylvania Lottery executive director.
“While dreaming about winning a billion-dollar Powerball jackpot is exciting, please remember to play responsibly and sign your ticket. We look forward to drawing the winning numbers tomorrow night!” Svitko said.
The prize outranks the $1.08 billion Powerball jackpot won in California on July 19.
According to Powerball, the odds of winning the jackpot are 1 in 292.2 million.
The next drawing will take place on Monday just before 11 p.m. ET.
(WASHINGTON) — U.S. employers continued hiring in September, despite increased interest rates and an uncertain economic outlook. Employers added 336,000 jobs last month, according to the latest report from the U.S. Bureau of Labor Statistics released Friday.
The September gains were higher than the average monthly gains of 267,000 in the previous 12 months. Leisure and hospitality showed the most improvement, followed by job increases in government, health care and science and tech services.
The country’s unemployment rate saw little movement last month, remaining at 3.8 percent.
