Subterms
President Trump’s plan to eliminate the penny could save the government money, but there’s no guarantee.President Trump recently ordered the U.S. Mint to stop producing pennies, for a simple-sounding reason. Each penny, he said, has “literally cost us more than 2 cents.”He’s right. Since 2006, the government has spent more money minting pennies than those pennies have been worth. More
The Fed’s short-term rates matter, but the main action now is in the 10-year Treasury market, which influences mortgages, credit cards and much more, our columnist says.Watch out for interest rates.Not the short-term rates controlled by the Federal Reserve. Barring an unforeseen financial crisis, they’re not going anywhere, especially not after the jump in inflation reported by the government on Wednesday.Instead, pay attention to the 10-year Treasury yield, which has been bouncing around since the election from about 4.8 to 4.2 percent. That’s not an unreasonable level over the last century or so.But it’s much higher than the 2.9 percent average of the last 20 years, according to FactSet data. At its upper range, that 10-year yield may be high enough to dampen the enthusiasm of many entrepreneurs and stock investors and to restrain the stock market and the economy.That’s a problem for the Trump administration. So the new Treasury secretary, Scott Bessent, has stated outright what is becoming an increasingly evident reality. “The president wants lower rates,” Mr. Bessent said in an interview with Fox Business. “He and I are focused on the 10-year Treasury.”Treasuries are the safe and steady core of many investment portfolios. They influence mortgages, credit cards, corporate debt and the exchange rate for the dollar. They are also the standard by which commercial, municipal and sovereign bonds around the world are priced.What’s moving those Treasury rates now is bond traders’ assessments of the economy — including the Trump administration’s on-again, off-again policies on tariffs, as well as its actions on immigration, taxes, spending and much more.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
The social media company is attracting investor interest because of Elon Musk’s close ties to President Trump and a recent jump in revenue.When Elon Musk bought X for $44 billion in 2022, more than a quarter of that was financed by loans from banks including Morgan Stanley. Banks normally quickly sell off such loans, but in this case they kept much of that debt because investors were reluctant to bet on the social media company’s floundering business.Mr. Musk’s newfound power in President Trump’s administration has helped change investors’ minds.On Thursday, the banks sold roughly $4.7 billion of X’s debt, according to two people familiar with the transaction, more than the $3 billion that they had originally intended to sell. Mr. Musk, who has become a close adviser to the president and is running a government efficiency initiative, has faced increasing questions about whether the companies he leads — including the electric automaker Tesla and the rocket company SpaceX — are benefiting from his position as Mr. Trump’s right-hand man.X has become a go-to platform for information on the administration’s plans, which Mr. Musk broadcasts to his account’s more than 217 million followers. Advertisers have returned in droves to X, people familiar with the deals said, fueling a boost in revenue. The company told investors that its revenue in December jumped 21 percent from a month earlier, a person with knowledge of the finances said.An X spokesman and Morgan Stanley declined to comment. Bloomberg previously reported the jump in revenue and details of the transaction.Selling the debt — which totaled $12.5 billion at the time of the acquisition — helps Mr. Musk and the banks, which have been saddled with it for two years. Just two months ago, investors were negotiating to buy that debt at a loss of 10 percent to 20 percent for the banks, one person involved in the discussions said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
Investors are now betting that the Federal Reserve will cut interest rates just once more this year, a drastic shift in expectations since late 2024.Stocks on Wall Street slumped at the start of trading on Wednesday, dragged lower by data that showed consumer prices rose more than expected in January, leaving the Federal Reserve little cause to lower interest rates again soon.The S&P 500 fell roughly 1 percent as trading got underway. The Nasdaq Composite index, which is chock-full of tech stocks that have come under pressure recently from rising global competition to develop the chips that will power the development of artificial intelligence, also fell around 1 percent.Fresh inflation data from the Bureau of Labor Statistics on Wednesday showed that prices rose 3 percent for the year through January, up from 2.9 percent in December. The “core” Consumer Price Index, which excludes volatile food and energy prices, rose 3.3 percent year-over-year.Signs of continuing price pressure is likely to encourage the Fed to refrain from further interest rate cuts in the coming months. For stock investors, higher interest rates means slower business activity, which can weigh on companies’ earnings and stock prices.The uptick in inflation in January “does not derail the longer-term downward trend in inflation,” said Kyle Chapman, a foreign exchange market analyst at Ballinger Group. But, he said, “it does reaffirm the consensus that cuts are going to come much more slowly than we had thought towards the end of last year.”Investors are now betting that the Federal Reserve will keep interest rates at their current level until December. It’s a drastic shift in expectations since last year, when traders were expecting as many as four cuts for 2025, and even just a few weeks ago investors expected the next cut in rates as soon as June.The two year Treasury yield, which is sensitive to changes in investors’ interest rate expectations, rose sharply after the inflation report, up 0.1 percentage points to 4.36 percent, close to its highest level of the year.Wednesday’s drop comes after a bumpy three weeks for traders, with whipsaw swings in stock prices reflecting investors’ struggle to parse the flurry of executive actions taken by President Trump since he returned to the White House for a second term.The S&P 500 has risen roughly 3 percent since the start of the year and has nudged up 1.2 percent since inauguration day, despite the volatility.Impending tariffs are adding to concern about an acceleration in inflation. On Monday, Mr. Trump announced tariffs on foreign steel and aluminum. He has already imposed a 10 percent tariff on Chinese goods, and broad 25 percent tariffs on Canada and Mexico are set to take effect in March, after being delayed for a month.“Rising prices already appear to be a headwind, and the prospect of new trade barriers have the potential to further fuel inflationary pressures by increasing costs for businesses and consumers,” said Jason Pride, chief of investment strategy and research at Glenmede, a wealth management firm. More
Goldman Sachs will drop a demand that corporate boards of directors include women and members of minority groups as financial firms backpedal from D.E.I. promises.Wall Street has not typically been accused of doing too much for women and minority groups. The financial services industry, after all, is one in which more major banks are named after the Morgan family than led by a female chief executive.So it meant something over the past half-decade or so when the biggest names in finance said, over and over again, that they would pour dollars and effort into lending to, hiring, promoting and working with underserved communities.And it means something else now, as many of those much-promoted policies and practices are being scrubbed to be sure they don’t wind up in the cross hairs of the Trump administration’s campaign against diversity, equity and inclusion.The retreat includes white-collar investment banks, consultancies, mutual funds and stock exchanges. The latest was Goldman Sachs, which said on Tuesday that it would drop a quota that forced corporate boards of directors to include women and members of minority groups. Others on Wall Street are curtailing efforts to recruit Black and Latino employees.One international bank, BNP Paribas, even hit the brakes on programming new events for next month’s International Women’s Day.This pullback has thus far been less overt than, say, in the technology industry, whose executives have made public displays of their support for President Trump’s anti-diversity initiatives. And some financial firms had started to make changes long before the election — opening programs aimed at minority candidates to all, for example.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
The agency had been one of Wall Street’s most feared regulators, with the power to issue rules on mortgages, credit cards, student loans and other areas affecting Americans’ financial lives.The day before Linda Wetzel closed on her retirement home in Southport, N.C., in 2012 — a cozy place where she could open the windows at night and catch an ocean breeze — the bank making the loan surprised her with a fee she hadn’t expected. Ms. Wetzel scoured her mortgage paperwork and couldn’t find the charge disclosed anywhere.Ms. Wetzel made the payment and then filed an online complaint with the Consumer Financial Protection Bureau. The bank quickly opened an investigation, and a month later, it sent her a $5,600 check.“My first thought was ‘thank you.’ I was in tears,” she recalled. “That money was a year or two of savings on my mortgage. It was my little nest egg.”Ms. Wetzel’s refund is a tiny piece of the work the bureau has done since it was created in 2011. It has clawed back $21 billion for consumers. It slashed overdraft fees, reformed the student loan servicing market, transformed mortgage lending rules and forced banks and money transmitters to compensate fraud victims.It may no longer be able to carry out that work.President Trump on Friday appointed Russell Vought, who was confirmed a day earlier to lead the Office of Management and Budget, as the agency’s acting director. Mr. Vought was an author of Project 2025, a conservative blueprint for upending the federal government that called for significant changes, including abolishing the consumer bureau.In less than 36 hours, Mr. Vought threw the agency into chaos. On Saturday, he ordered the bureau’s 1,700 employees to stop nearly all their work and announced plans to cut off the agency’s funding. Then on Sunday, he closed the bureau’s headquarters for the coming week. Workers who tried to retrieve their laptops from the office were turned away, employees said.The bureau “has been a woke & weaponized agency against disfavored industries and individuals for a long time,” Mr. Vought wrote Sunday on X. “This must end.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
The price of a single Bitcoin rose to six figures for the first time, an extraordinary level for a 16-year-old cryptocurrency once dismissed as a sideshow.In May 2010, Laszlo Hanyecz, an early cryptocurrency enthusiast, used Bitcoin to buy two pizzas from Papa John’s. He spent 10,000 Bitcoins, or roughly $40 at the time, in one of the first purchases ever made with the digital currency.It has turned out to be the most expensive dinner in history.On Wednesday, the price of a single Bitcoin rose to more than $100,000, a remarkable milestone for an experimental financial asset that had once been mocked as a sideshow and a fad. The total cost of those pizzas today: $1 billion.Bitcoin now stands as arguably the most successful investment product of the last 20 years. The value of all the coins in circulation is $2 trillion, more than the combined worth of Mastercard, Walmart and JPMorgan Chase. The motley assortment of hackers and political radicals who embraced Bitcoin when it was created by an anonymous coder in 2008 have become millionaires many times over. And the invention has spawned an entire industry anchored by publicly traded companies like Coinbase, a cryptocurrency exchange, and promoted by celebrities, athletes and Elon Musk.Even the president-elect says he is a believer. During the campaign, Donald J. Trump marketed himself as a Bitcoin enthusiast, vowing to create a federal stockpile that could push its price even higher.
Note: As of 10 p.m. Eastern on Dec. 4Source: Investing.comBy The New York TimesBitcoin began as “essentially an experimental hobbyist project,” said Finn Brunton, the author of a 2019 book about the history of cryptocurrency. “To see where it is now is to see a really impressive feat.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
Serena Williams, Jerome H. Powell, Jeff Bezos and other leaders across business and technology discussed artificial intelligence, inflation, the media and what the world would look like under a second Donald J. Trump presidency.Mr. Bezos, for one, thinks the president-elect has “a good chance of succeeding.”Elon Musk wasn’t in the room, but he was present throughout at the DealBook Summit. The speakers were largely optimistic about his efforts in the new administration.The event, hosted by Andrew Ross Sorkin, founder of DealBook, has taken place since 2011.Here are five main themes:Inflation is still an issue, but there’s a chance for growth.Jerome H. Powell, the chair of the Federal Reserve, said the economy was in a “very good place.” Inflation has come down, and the labor market has rebounded. The big takeaway for investors: The central bank can afford to be more cautious when it considers lowering interest rates, Mr. Powell said. (The next Fed meeting will be Dec. 17-18.)Ken Griffin, the billionaire founder of the hedge fund Citadel and a top donor to the Republican Party, placed the blame for inflation squarely on the Biden administration, which, he argued, “put this country on an inflationary path that was unprecedented in our lifetime.” Mr. Powell has “had to deal with cleaning up the mess,” he added.Former President Bill Clinton said inflation was the “fundamental problem” that helped Mr. Trump return to the White House.“The average person had not really lived through something like this for 40 years, since the ’70s,” Mr. Clinton said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
The World Bank warned in a new report that poor countries will be stuck in economic “purgatory” without debt relief.Soaring inflation saddled developing countries with a record $1.4 trillion in debt servicing costs last year, the World Bank said in a report published on Tuesday, detailing the precarious state faced by the world’s most vulnerable economies since the pandemic.As central banks around the world raised interest rates to slow rising prices, poor countries with already high debt burdens saw the interest payments on the money that they owed to creditors balloon. While principal balances held steady at around $951 billion, interest payments jumped by a third, to $406 billion. That has left more countries facing fiscal crises and struggling to avoid default.“These facts imply a metastasizing solvency crisis that continues to be misdiagnosed as a liquidity problem in many of the poorest countries,” Indermit Gill, the World Bank’s chief economist, wrote in the report. “It is easy to kick the can down the road, to provide these countries just enough financing to help them meet their immediate repayment obligations. But that simply extends their purgatory.”More than a dozen sovereign nations defaulted on their debt in the last three years, and more than 30 of the world’s poorest countries have experienced “debt distress,” according to the United Nations. In 2023, Belarus, Ghana, Lebanon, Sri Lanka and Zambia were all in default, according to Fitch Ratings.Global financial institutions such as the World Bank and the International Monetary Fund have been working with international lenders to help developing countries restructure their debt, but the process has been slow and painstaking. China, the world’s largest creditor, has been particularly reluctant to alter the terms of its loans as it grapples with its own economic challenges.The Biden administration has been critical of China’s lending practices. Treasury Secretary Janet L. Yellen described them as “opaque” in an interview with The New York Times in October in which she called for accelerating debt relief. She also raised the idea of helping nations find new sources of borrowing by creating coordinated aid packages for “high-ambition countries” that want to invest in clean energy projects.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
