NewsNews

Finance news

  1. 1

    Federal Reserve raises interest rates for the first time since 2023

    The Federal Reserve raised its benchmark interest rate by a quarter percentage point on Wednesday, setting it between 3.75% and 4%, its first increase since July 2023. The move is aimed at reining in a monthslong surge in inflation set off by the Iran war. The vote was unanimous, including that of Trump-appointed Chair Kevin Warsh, who said inflation had been too high for too long. President Donald Trump criticized the decision and called for lower rates, saying the Fed acted only for political reasons, though he said he still had confidence in Warsh. Major stock indexes turned lower after the announcement.

    Key facts

    • The Dow Jones Industrial Average closed down 630 points, or 1.2%, after the announcement.
    • Three of 12 policymakers voted for a hike at July's meeting, the most same-direction dissenters in a decade.
    • Prices rose 3.4% in August from a year earlier, more than a point above the Fed's 2% target.
    • The average U.S. gasoline price stood at $4.36 a gallon, more than $1.30 above pre-war levels, per AAA.
    • Former chair Jerome Powell will vote on interest rates as a board member, bucking typical norms.

    Commentary

    The hike itself was the predictable part; the telling detail is that the board moved against the president's public demands, suggesting it will prioritize inflation over political pressure. Households paying for fuel, groceries and borrowing will carry that cost while oil stays above $105 a barrel.

    Sources: ABC News - Breaking News, Latest News and Videos, ABC7 Los Angeles, Bloomberg.com

  2. 2

    US inflation rises to 3.7% in September from 3.4% in August

    U.S. consumer prices rose 3.7% in September from a year earlier, up from 3.4% in August, the Labor Department said Wednesday. Gasoline, clothes and airfares rose in price, and the Iran war's disruption of oil and gas supplies is a major driver, while surging investment in AI data centers has pushed up prices for computer chips and electronics. The figures add pressure on the Federal Reserve, which has already raised rates and is weighing whether to raise them again. They also weigh on President Trump's political standing, as an Associated Press-NORC poll found his approval on the economy at a new low ahead of the midterm elections.

    Key facts

    • Consumer prices rose 0.6% from August to September, the biggest monthly gain in five months.
    • The Motley Fool reported a 3.6% 2027 Social Security COLA, based on CPI-W's 3.9% September rise.
    • The Fed raised its short-term interest rate for the first time in three years, to about 3.9%.
    • Energy prices rose 20.4% from a year earlier in September, according to CPI-W data cited by The Motley Fool.
    • Goldman Sachs estimated the AI buildout has added about a half-percentage point to annual inflation.

    Commentary

    The notable shift is that the energy shock is spreading into airfares, delivery, chips and electronics rather than staying at the pump. Higher interest rates cannot untangle supply disruptions, so the Fed's remedy will likely fall on households and borrowers through slower spending and growth.

    Sources: ABC News - Breaking News, Latest News and Videos, Yahoo Finance, WKMG

  3. 3

    Brent crude briefly tops $100 a barrel as Iran war tightens supply

    Brent crude futures briefly topped $100 a barrel on Thursday, the first time since May, ABC News reported, after Houthi militants in Yemen claimed to have struck two Saudi tankers in the Red Sea. The price then dipped to $99.70, a rise of roughly 28% over the past month. The jump follows a resumption of large-scale fighting between the U.S. and Iran that has imperiled a preliminary deal to end the war, and the U.S. resumed its naval blockade of the Strait of Hormuz last week. Yahoo Finance later put Brent around $110, and OilPrice.com said the war's premium remains in place into 2027.

    Key facts

    • Brent crude briefly topped $100 a barrel on Thursday, its highest level since May 26.
    • Houthi militants in Yemen claimed to have struck two Saudi tankers in the Red Sea.
    • The U.S. resumed its naval blockade of the Strait of Hormuz last week, reversing a key deal commitment.
    • AAA put the average U.S. gas price at $4.09 a gallon, after it topped $4 earlier that week.
    • Goldman Sachs raised its December Brent forecast to $90 a barrel, below prevailing prices.

    Commentary

    What moved is less the spike itself than the expectation that the price floor has reset, with physical shortages replacing a passing war premium. Tanker attacks, the Hormuz blockade and damaged refining capacity point to fuel users and governments carrying the cost, while US producers are already reporting record cash flow.

    Sources: ABC7 Bay Area, Crude Oil Prices Today | OilPrice.com, Yahoo Finance, The Jerusalem Post

  4. 4

    Wall Street posts worst week since June as AI stocks slump and oil climbs

    US stocks closed sharply lower on Friday as technology shares slid, with AI-related companies leading the decline and the Nasdaq suffering its steepest weekly drop since June. The selling reflects a shift in investor focus from how fast AI demand can grow to whether companies can earn adequate returns on heavy infrastructure spending, much of it debt-financed. CoreWeave, the Nvidia-backed data center operator, was the clearest example, with its bonds trading at levels Bloomberg said are typically associated with financial distress. Oil rose on Middle East supply worries. Hotter-than-expected inflation data pushed markets to expect the Fed to hold rates this month, while Reuters reported that some Anthropic investors are weighing a lower valuation for its upcoming IPO.

    Key facts

    • CoreWeave shares fell 12% Friday, bringing their loss over five sessions to about 25%.
    • The PHLX chip index fell 3.8% Friday, its eighth straight daily decline and longest losing streak since 2008.
    • CoreWeave's bonds sold off sharply this week, pushing yields above 15%.
    • Brent crude settled 3.7% higher at $109.86 per barrel.
    • The 10-year Treasury yield ended near 5.09%, and closing reports disagreed on whether it rose or fell Friday.

    Commentary

    The selloff is less a verdict on AI demand than a repricing of who pays for it. Dow gains and energy strength suggest money is rotating within equities rather than leaving them, while growth names carry the funding risk. Firms that finance expansion with debt face the most exposure if borrowing costs keep climbing.

    Sources: Honolulu Star-Advertiser, Eurasia Business News, Opening Bell Daily, CNBC

  5. 5

    Bank of Canada expects sharply higher inflation forecast as oil prices surge

    The Bank of Canada expects to raise its quarterly inflation forecast significantly this month because crude oil and petroleum product prices remain persistently high, Governor Tiff Macklem said on Saturday. He said the Middle East conflict, curtailed shipments and refinery damage have raised the risk that inflation broadens and becomes more persistent. The new forecasts feed into the October 28 rate decision. RBC economist Nathan Janzen said that meeting is live but a hike is not his base case, as weakening jobs and the wider economy may offset energy-driven price pressure.

    Key facts

    • Governor Tiff Macklem said the Bank of Canada expects to raise its quarterly inflation forecast significantly this month.
    • Economists polled by Reuters expect annual inflation rose to 3.2 per cent in September, up from 3 per cent in August.
    • The Bank of Canada's policy rate has stood at 2.25 per cent for nearly a year.
    • As of Saturday, markets priced no rate change on October 28 but increases of 100 basis points over the next year.
    • Statistics Canada reported that the economy shed 68,000 jobs in September, a second consecutive monthly decline.

    Commentary

    The real question is not whether inflation rises but whether it spreads beyond fuel, and Macklem's rate talk leaves that open. Markets pricing 100 basis points of hikes next year sit uneasily with RBC's no-hike call for 2026, so the bank's path likely hinges on labour data it has not yet seen. With governments short of fiscal room, the burden of containing any spillover falls heavily on monetary policy.

    Sources: Macon Telegraph, BNN Bloomberg

Today's video

Also posted to: