Finance News
Will the Federal Reserve take us back to an era of cheap money?
Former Federal Reserve Governor Kevin Warsh discusses the Federal Reserve’s decision to slash rates on ‘Kudlow.’
Investors celebrated what could be the return of an easy money era after the Federal Reserve cut interest rates for the first time since March 2020 and projected rates may decline even further over the next two years.
Chairman Jerome Powell was asked by FOX Business’ Edward Lawrence whether the U.S. could be headed back to a time when rates hovered near zero, or so-called cheap money.
“It’s just a great question that we can only speculate about intuitively,” Powell said. “My own sense is that, that we’re not going back to that. But, you know, honestly, we’re going to find out. But, you know, it feels to me that the neutral rate is probably significantly higher than it was back then.
“How high is it? I just don’t think we know.”
THE FED CUTS RATE BY 50 BASIS POINTS: WHAT TO KNOW
The Federal Funds target rate now sits between 4.75%-5.00%, and projections from the central bank show rates could fall below 4%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 42063.36 | +38.17 | +0.09% |
| SP500 | S&P 500 | 5702.55 | -11.09 | -0.19% |
Investors celebrated the move, pushing stocks, which were already at record levels, even higher. The Dow Jones Industrial Average crossed 42,000 for the first time ever, while the S&P 500 hovers at its all-time high.
HOW THE FED’S HISTORIC RATE CUT MAY IMPACT YOUR DAILY FINANCES
Dow Jones Industrial Average
The last time policymakers cut rates, the COVID-19 pandemic was raging as a public health and financial crisis, prompting an emergency rate cut in March 2020 when the Fed took rates to a range of 1%-1.25%, the largest cut since the 2008 financial crisis.
“The spread of the coronavirus has brought new challenges and risks,” Fed Chairman Jerome Powell said at the time during a news conference. “The virus has afflicted many communities around the world, and the outbreak has also disrupted economic activity in many countries. The virus and the measures being taken to contain it will surely weigh on economic activity, both here and abroad, for some time.”
Jerome Powell, chairman of the Federal Reserve, during a news conference following a Federal Open Market Committee meeting in Washington, D.C., July 31, 2024. (Al Drago/Bloomberg via Getty Images / Getty Images)
Americans enjoyed the lowest borrowing costs of a generation. For example, a 30-year fixed rate mortgage fell to a record low of 2.65% in January 2021, as tracked by Freddie Mac.
HOW LOW MAY MORTGAGE RATES GO?
Homes under construction in Sacramento, Calif., July 3, 2023. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
While the start of the current easing cycle is underway, the current conditions are far from the pandemic upheaval. Still, borrowing costs will begin to fall, but its unlikely rates will return to the lows of four years ago.
FED GOVERNOR EXPLAINS HER NO VOTE
Additionally, inflation remains a risk. That’s why Federal Reserve Governor Michelle Bowman was the sole dissent, voting against a rate cut.
“While core inflation remains around or above 2.5%, I see the risk that the committee’s larger policy action could be interpreted as a premature declaration of victory on our price stability mandate. We have not yet achieved our inflation goal” she explained Friday.
‘Shark Tank’ investor Kevin O’Leary joins ‘Fox & Friends’ to discuss Elon Musk and Vivek Ramaswamy leading DOGE, Trump’s potential appointments for Treasury secretary, and the first-ever crypto czar.
Weighing in on rumblings around a potential Trump-appointed crypto czar, popular entrepreneur Kevin O’Leary called on whoever’s nominated to put an end to regulatory indecision.
“We’ve got to stop these shenanigans because this is a technology that affects all 11 sectors of the economy,” O’Leary said Thursday on “Fox & Friends.”
“It provides efficiency and digital payment systems. And we have to be competitive worldwide.”
According to industry sources familiar with the discussions, President-elect Trump is mulling a position dedicated solely to cryptocurrency policy. It’s unclear whether the role would be a czar type or a White House staff role, but the official holding the position would interact with regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission.
BITCOIN E.T.F. OPTIONS GO LIVE IN BUSY TRADING. MOST BETS ARE ON GAINS
Two names that come to O’Leary’s mind are former acting U.S. Comptroller of the Currency Brian Brooks and Coinbase CEO Brian Armstrong.
Kevin O’Leary put pressure on a potential Trump-nominated crypto czar to start making regulatory decisions as soon as possible. (Getty Images)
“Brian, of Coinbase, he’s being sued by [SEC Chair Gary] Gensler right now. His company is under litigation from the SEC,” the O’Leary Ventures CEO noted.
“We need a czar here, and we need to start making decisions. Is Ethereum a commodity, or is it a security? Pick one and go with it. I don’t care which one it is, but we’ve got to at least pick it,” he added. “We haven’t done that yet.”
‘Making Money’ host Charles Payne discusses the history of money.
The president-elect campaigned heavily among pro-crypto voters, making a stop at crypto bar PubKey in New York City and speaking at the Bitcoin 2024 conference in Nashville, Tennessee, just weeks before Election Day.
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Manward Press chief investment strategist Shah Gilani discusses how high the S&P 500 can climb in 2025 on ‘Making Money.’
Bitcoin, the largest cryptocurrency by market value, touched a new all-time high of $94,000 in afternoon trading Wednesday and has advanced over 156% from its 52-week low of $36,815.63 in November 2023, as tracked by Dow Jones Market Data Group.
iShares Bitcoin ETF Trust
The surge in price has lifted crypto exchange-traded funds, driving the assets of the largest, iShares Bitcoin Trust, to over $40 billion and lifting it to a record high.
Other bitcoin ETFs are also seeing high interest.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BTC | GRAYSCALE BITCOIN MINI TRT ETF BITCOIN MINI TRUST BTC ETF | 43.34 | +1.50 | +3.59% |
| GBTC | GRAYSCALE BITCOIN TRUST ETF – USD ACC | 77.62 | +2.63 | +3.51% |
| FBTC | FIDELITY WISE ORIGIN BITCOIN FUND – USD ACC | 85.42 | +2.88 | +3.48% |
| ARKB | ARKB – ARK 21SHARES BITCOIN ETF – USD ACC | 97.54 | +3.24 | +3.44% |
FOX Business’ Suzanne O’Halloran contributed to this report.
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Finance News
Ford recalls nearly 25,000 trucks for problem that could make rearview camera malfunction
‘Car Wizard’ David Long joins ‘The Big Money Show’ to share his top ‘no-brainer buys’ under $10,000.
Ford is recalling nearly 25,000 trucks because of a problem that could make the rearview camera system malfunction.
The automaker said water “may enter the Tailgate Park Assist Sensor Interface Module” and lead to a malfunction of the rearview camera image display in 24,950 of its 2023-2024 F-250, F-350 and F-450 trucks.
All the potentially affected trucks feature a tailgate top camera that “provides additional camera images when the tailgate is down and is a separate camera from the primary rear-view camera,” Ford said in a Oct. 25 recall report submitted to the National Highway Traffic Safety Administration (NHTSA).
A 2023 Ford Super Duty F-350 Limited. (Ford Motor Co. / Fox News)
The recall report indicated the problem stemmed from “certain mating interfaces” of the tailgate top camera being “out of tolerance” and the camera bracket “retain[ing] water” during the application.
FORD TO PAUSE PRODUCTION OF F-150 LIGHTNING PICKUP
In the event that the issue occurs, the rearview camera image may show up as “blue or black” or only work “intermittently,” things that could pose a safety issue due to reduced driver visibility, according to the report.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 10.24 | -0.04 | -0.39% |
FORD CANCELS PLANS FOR ELECTRIC THREE-ROW SUV
It has not led to any known accidents or injuries, Ford said in another document.
A badge on a vehicle at a Ford dealership in New Lebanon, New York, on Jan. 25. (Angus Mordant/Bloomberg via Getty Images / Getty Images)
According to the recall report, owners of the recalled trucks can get their tailgate top camera, wire harness and TPASIM module swapped out at a Ford or Lincoln dealership for free. Their “Image Processing Module A” will receive a software update too, it said.
“Pick-up and delivery will be available at participating dealerships,” a Ford spokesperson told FOX Business. “We’re also working through other potential options that would make completing this recall as convenient as possible for our customers.”
FORD RECALLS 144,500 MAVERICK TRUCKS DUE TO REARVIEW CAMERA DISPLAY ISSUE
Affected Ford F-250, F-350 and F-40 owners can expect to see a recall notification letter in their mailboxes in early December.
Ford said early last month it has sold over 853,400 of its various types of trucks in the U.S. so far this year.
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