 |
|
|
|||||
Central bankers from around the world said Tuesday they “stand in full solidarity” with U.S. Federal Reserve Chair Jerome Powell, after President Donald Trump dramatically escalated his confrontation with the Fed with the Justice Department investigating and threatening criminal charges.Powell “has served with integrity, focused on his mandate and an unwavering commitment to the public interest,” read the statement signed by nine national central bank heads including European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey.They added that “the independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.”The dispute is ostensibly about Powell’s testimony to Congress in June over the cost of a massive renovation of Fed buildings. But in a statement Sunday, Powell, abandoning his previous attempt to ignore Trump’s relentless criticism, called the administration’s threat of criminal charges “pretexts” in the president’s campaign to seize control of U.S. interest rate policy from the Fed’s technocrats.Trump has repeatedly criticized Powell and the Fed for not moving faster to cut rates. Economists warn that a politicized Fed that caves in to the president’s demands will damage its credibility as an inflation fighter and likely lead investors to demand higher rates before investing in U.S. Treasurys.Other signatories of the statement carried on the ECB’s website were Erik Thedeen, governor of Sweden’s central bank; Christian Kettel Thomsen, chair of Denmark’s central bank; Swiss National Bank Chair Martin Schlegel; Michele Bullock, governor of the Reserve Bank of Australia; Tiff Macklem, governor of the Bank of Canada; Bank of Korea Governor Chang Yong Rhee; Gabriel Galipolo, governor of the Banco Central do Brasil.Also attaching their names were François Villeroy de Galhau, board chair of the Bank for International Settlements, and Pablo Hernández de Cos, BIS general manager. The BIS is an international organization of central banks based in Basel, Switzerland.One prominent central bank not included in the statement was the Bank of Japan. The statement said that more signatures could be added later. David McHugh, AP Business Writer
Category:
E-Commerce
Prediction markets are all the rage right now. Weekly trading volume on prediction platforms just surpassed $2 billion, and apps like Polymarket are being treated as the next big thing in consumer finance and entertainment. These platforms are designed to gamify uncertainty by exploiting the same cognitive biases as gambling and day-trading, quietly pushing users toward overspending, emotional volatility, and compulsive checking. Its easy to see why people are drawn to them. Prediction markets feel smarter than reckless betting, more dynamic than typical investing, and more objective than punditry. For example, users are able to watch the odds move in real time, making it feel like theyre seeing the truth of a situation, whether its a political outcome or whether the CEO of Coinbase will drop the word AI on their next earnings call. Young users are particularly vulnerable, with a 2025 TransUnion study finding that 34% of Gen Z and 42% of millennials are actively participating in betting. Meanwhile, monthly debt payments for millennials and Gen Z have surged 20% and 27% respectively, drastically outpacing inflation (6%) and wage growth (8%), so these small, repeated losses can quickly snowball into real financial strain. Gambling, Cloaked as Investing This isnt a new playbook. First, it started with sports betting, then 0DTE (zero days to expiration) options, and now there are prediction markets. If you were to open any major prediction platform today, the parallels to casinos will become drastically obvious. Both interfaces are fast, have charts that flicker, and use prompts that urge rapid entry and exits. Users are being wired to double down after facing a loss, overrate their intuition, and assume moving prices reflect real information. These are classical behavioral traps that are just being applied in a new environmentand because it has the faux appearance of investing, all the risks feel legitimate. For instance, a user may place small bets on multiple elections simultaneously, checking and adjusting their choices every few minutes. However, even if each bet is only $1 to $5, the constant engagement can cause stress, disrupt focus at work, and eat away at savings, all without the user truly realizing whats happening. Small Bets, Big Consequences One of the most misleading narratives around prediction markets is the idea that the bets are small and, subsequently, inconsequential. The danger isnt the size, its the frequency, repetition, and compulsive checking. Your brain is constantly chasing endless hooks as the market continues to move every few minutes. Users are experiencing a psychological cycle in which they overestimate their ability to predict outcomes, fall into the just one more trade cycle, and experience emotional swings that are spilling into their daily livesaffecting their focus at work, sleep patterns, and interactions with family and friends. Prediction markets are playing on the idea that users are making informed predictions rather than calling it what it isgambling. The rationalization of this behavior is part of what makes it so enticing to users. Theyre convincing themselves that theyre learning about markets, politics, and economic signals, when in reality, theyre being tricked into a loop. And most of the time, theyre not noticing the true cost until it hits their wallets or their well-being. The Overlooked Cost The fun side of prediction markets is often what is highlighted in the mediatheyre showcasing the clever traders, the unexpected outcomes, and the viral probability swings. Whats not highlighted? The stories that actually matter the most, like the real households absorbing small but continuous financial losses, the compulsive checking that mirrors day-trading addiction, and the lack of guardrails in a gray zone between wagering, entertainment, and finance. On their own, these losses may seem insignificant. But as a whole, they add up. When you combine mass adoption, financial stakes, and algorithmic nudges, the risk profile changes dramatically. What initially looked like a fun forecasting tool is now an invisible drain on both your wallet and your well-being. Were setting ourselves up for a generation where financial prudence goes out the window, an influx of personal bankruptcies is inevitable, and the mental health crisis gets even worse than it is today. How to Participate Without Losing Yourself Prediction markets arent going anywhere, nor should they. They can be interesting and even useful, but users need to approach them differently. You should think of them like speculative trading or gambling at a casino. Things like betting only what you can afford to lose, avoiding impulse reactions, tracking the gains, losses, and time spent, all help prevent compulsive cycles and preserve mental health. These practices are especially important for Gen Z and millennials, who are driving the growth of this sector and are on track to spend more per capita on prediction markets than any other generations. At the end of the day, these platforms arent just forecasting future outcomes, theyre also forecasting, and influencing your behavior. Recognize the signs and take control before both your wallet and well-being become the most predictable outcomes of all.
Category:
E-Commerce
Inflation likely remained elevated last month as the cost of electricity, groceries, and clothing may have jumped and continued to pressure consumers’ wallets.The Labor Department is expected to report that consumer prices rose 2.6% in December compared with a year earlier, according to economists’ estimates compiled by data provider FactSet. The yearly rate would be down from 2.7% in November. Monthly prices, however, are expected to rise 0.3% in December, faster than is consistent with the Federal Reserve’s 2% inflation goal.The figures are harder to predict this month, however, because the six-week government shutdown last fall suspended the collection of price data used to compile the inflation rate. Some economists expect the December figures will show a bigger jump in inflation as the data collection process gets back to normal.Core prices, which exclude the volatile food and energy categories, are also expected to rise 0.3% in December from the previous month, and 2.7% from a year earlier. The yearly core figure would be an increase from 2.6% in November.In November, annual inflation fell from 3% in September to 2.7%, in part because of quirks in November’s data. (The government never calculated a yearly figure for October). Most prices were collected in the second half of November, after the government reopened, when holiday discounts kicked in, which may have biased November inflation lower.And since rental prices weren’t fully collected in October, the agency that prepares the inflation reports used placeholder estimates that may have biased prices lower, economists said.Inflation has come down significantly from the four-decade peak of 9.1% that it reached in June 2022, but it has been stubbornly close to 3% since late 2023. The cost of necessities such as groceries is about 25% higher than it was before the pandemic, and other necessities such as rent and clothing have also gotten more expensive, fueling dissatisfaction with the economy that both President Donald Trump and former President Joe Biden have sought to address, though with limited success.The Federal Reserve has struggled to balance its goal of fighting inflation by keeping borrowing costs high, while also supporting hiring by cutting interest rates when unemployment worsens. As long as inflation remains above its target of 2%, the Fed will likely be reluctant to cut rates much more.The Fed reduced its key rate by a quarter-point in December, but Chair Jerome Powell, at a press conference explaining its decision, said the Fed would probably hold off on further cuts to see how the economy evolves.The 19 members of the Fed’s interest-rate setting committee have been sharply divided for months over whether to cut its rate further, or keep it at its curent level of about 3.6% to combat inflation.Trump, meanwhile, has harshly criticized the Fed for not cutting its key short-term rate more sharply, a move he has said would reduce mortgage rates and the government’s borrowing costs for its huge debt pile. Yet the Fed doesn’t directly control mortgage rates, which are set by financial markets.In a move that cast a shadow over the ability of the Fed to fight inflation in the future, the Department of Justice served the central bank last Friday with subpoenas related to Powell’s congressional testimony in June about a $2.5 billion renovation of two Fed office buildings. Trump administration officials have suggested that Powell either lied about changes to the building or altered plans in ways that are inconsistent with those approved by planning commissions.In a blunt response, Powell said Sunday those claims were “pretexts” for an effort by the White House to assert more control over the Fed.“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said. “This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditionsor whether instead monetary policy will be directed by political pressure or intimidation.” Christopher Rugaber, AP Economics Writer
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||