Tip News
Posts
Federal Reserve Takes A Big Swing

Federal Reserve Takes A Big Swing

Your unbiased daily news brief

James Kratch
September 19, 2024

Good Thursday morning. Vincent van Gogh's The Starry Night isn't just a famous painting; it is also a scientifically-accurate depiction. Have a great day!

In Today’s Brief

House: Shutdown watch
Israel: More Hezbollah strikes
Iran: Election interference
23AndMe: Mass resignations
ESPN: Star reporter retires

... and more

First time reading? Sign up here

Top Tips

1) Chopping it up

The Federal Reserve finally cut interest rates, and with a flourish.

The news: Rates were slashed by a half-point, a significant move for the first policy adjustment since 2020. The central bank said it was moved to make the long-anticipated cut due to inflation trending toward a 2% YoY goal and a weakening labor market. Fed Chairman Jerome Powell signaled another half-cut point is on the table by the end of the year.
The reactions: Fed Gov. Michelle Bowman voted against the cut, advocating for a quarter-point cut. It was the first such dissent in almost 20 years. Major indexes closed slightly down on the news (Dow -0.25%, Nasdaq -0.31%, S&P 500 -0.29%) but futures were up last night.
Political picture: The cut could boost Vice President Kamala Harris' case as somewhat of an incumbent; Democrats have been calling for a cut for months. Former President Donald Trump accused the central bank of "playing politics" with such a large cut close to the presidential election.
Economic picture: Powell insisted the Fed did not make a big cut as a catch-up attempt after dragging its feet for too long. And the battle against inflation does appear to be succeeding. But concerns about the strength of the job market and a potential recession remain.

2) Taking action

The federal government is suing the owner of the boat that toppled a Baltimore bridge.

Look back: A container ship lost power, then control and crashed into the Francis Scott Key Bridge in late March. The bridge completely collapsed. Six people died, the channel was blocked for weeks and supply chains were significantly impacted.
The news: Department of Justice prosecutors allege the owners and crew of the Dali knew the vessel had electrical and mechanical issues and failed to address them. DOJ is seeking $100M in damages in Maryland federal court -- the cost of the response to the disaster and efforts to clear debris and the wreck from the nearby waters.
Big picture: The boat's owners previously moved to limit their liability to less than half of the damages DOJ is seekingfor the "entirely avoidable" incident. A new bridge could cost upward of $2B; officials hope to have it operational by 2028.

3) No snapping

Canada is unlikely to be a late participant in this year's global election party.

The news: Bloc Quebecois Leader Yves-Francois Blanchet said his party will vote confidence in embattled Prime Minister Justin Trudeau. If the Quebec nationalist votes hold, Conservative Leader Pierre Poilievre's initial effort to force a snap election is expected to fail in Parliament.
Back story: Trudeau's Liberal Party holds power with a minority government. The center-left New Democratic Party recently ended a supply-and-confidence deal with the Liberals, opening the door for Poilievre. But the Liberals and BQ have enough combined votes to repel the attempt for now.
Big picture: Canada is scheduled to have a federal election next fall. Trudeau's political future is very much in doubt, a recent byelection loss for a reliably Liberal seat has done him no favors and the NDP is making its case to lead a new government. Poilievre's challenge is maintaining his party's momentum when a vote may still be far off.

Quick Tips

U.S. News

The House failed to pass a government spending bill spearheaded by Speaker Mike Johnson. A partial shutdown will begin Oct. 1 without action by Congress; there is significant doubt Republicans can pass legislation without Democratic votes (More)
A body was found near the site of the Kentucky highway shooting earlier this month, likely ending a two-week manhunt. Authorities believe it is the alleged gunman; he had told a woman he planned to kill himself prior to opening fire on Sept. 7 (More)
Atlantic City's mayor was indicted on child abuse charges. Marty Small Sr. and his wife La’Quetta, the city's schools superintendent, allegedly physically assaulted their then-teenaged daughter (More)

World News

A second wave of synchronized electronic device explosions targeted Hezbollah members in Lebanon. The apparent Israeli intelligence effort has led to several dozen deaths and over 4K injuries in total; the United Nations General Assembly called for Israel to end occupation of Palestinian lands within 12 months (More | More)
Armenia accused Russia of a plot to overthrow its government. The South Caucasus nation alleges the Kremlin paid and trained insurgents; Armenian Prime Minister Nikol Pashinyan said the country may seek European Union membership as it moves out of Moscow's orbit (More)
Peru has declared a state of emergency due to wildfires. At least sixteen people have died in the blazes; three heavily forested regions of the South American nation are under the advisory (More)

Campaign News

Iranian hackers tried to sell information stolen from former President Trump's campaign to President Joe Biden's campaign, according to the FBI. There is no evidence any individuals connected to Biden engaged with the overtures; the DOJ is reportedly preparing charges (More)
The Teamsters Union declined to make a presidential endorsement. Some leaders and local and regional divisions have pledged support for Vice President Harris, but the rank-and-file supported Trump; the vice president received an endorsement from over 100 former Republican officials (More | More)
Harris leads Trump in the three Midwestern battleground states, according to a new round of Quinnipiac polls. The vice president has a 49-48 edge in Wisconsin and 51-46 leads in Michigan and Pennsylvania (More)

Business & Markets

Seven of 23AndMe's eight board members have resigned. Only CEO Anne Wojcicki remains atop the troubled genetic testing company; she said she remains committed to taking the firm private after a proposal was previously rejected by a special committee (More)
Boeing will temporarily furlough tens of thousands of white-collar workers. The announcement comes after over 30K machinists went on strike last week, halting airplane production for the aerospace giant; executives will take a temporary pay cut (More)
Tupperware has filed for Chapter 11 bankruptcy protection. The plastic food storage company has struggled with poor sales and sagging popularity for years; CEO Laurie Ann Goldman said it will reorganize into a "digital-first, technology-led company" (More)

Entertainment & Sports

ESPN's Adrian Wojnarowski retired from journalism to become the men's basketball general manager at St. Bonaventure, his alma mater. The prolific NBA newsbreaker was arguably the nation's most prominent sports reporter (More)
Kind Snacks founder Daniel Lubetzky is the first new regular Shark Tank investor in over a decade ahead of the ABC show's 16th season. Lubetzky was a recurring cast member in previous years; billionaire Mark Cuban has said he will leave the show after the upcoming season (More)
Portland, Oregon, was awarded a WNBA expansion franchise. The team will be the league's 15th member and begin play in 2026, sharing an arena with the NBA's Trail Blazers; San Francisco and Toronto were also recently awarded teams (More)

Quick Hitters

Fun Stuff: Milo the Cat enjoys his fireplace. And if it is not ignited, he will let you know he is not happy about it.
Team Work: An Albanian man's boat was sinking in the English Channel, so he made an emergency call to Dover ... Delaware. But officials got in touch with colleagues across the pond and there was a happy, and safe, ending.
Go Deep: Self-medicating gorillas may help humans make future drug discoveries. Scientists have found the tropical plants they eat have medicinal effects.
Drink Up: Fall is right around the corner. Get ready to make some seasonal cocktails for the occasion.
Life Hack: Doing a "no spend month" can accomplish much more than saving money. Here is a look at some of the personal benefits.

Watch This

The world has good news about oil spills.