{{ 'Go back' | translate}}
Njus logo

Personal Finance news | Njus USA

A Short History of Fed Rate Cuts

Personal Finance Fortune

The last time the Fed cut interest rates with the unemployment rate so low was in July of 1969.
'Testifying before the House Financial Services Committee last week, Fed Chair Jerome Powell hinted that the Federal Reserve may cut short-term interest rates when they meet again later this month. A rate cut wouldn’t be anything new in terms of history but it has been a long time since the Fed last lowered their short-term interest rate. Since 1960, the Federal Reserve has cut the Fed Funds Rate nearly 140 times. That’s good enough for roughly 23 times per decade. But there hasn’t been a single rate cut this decade: Obviously, the biggest reason there hasn’t been a rate cut this decade is that rates were on the floor for so long following the Great Financial Crisis. Rates were effectively lowered to zero in December 2008 and didn’t rise from the dead until December 2015, when the Fed finally raised rates a quarter of a percent. The average rate cut over the past 60 years or so is 50 basis points but there aren’t many historical scenarios that compare with the current market or economic situation. The Fed Funds rate currently stands at 2.5%. Before the financial crisis of 2007-2009, there have only been a handful of times where the Fed cut rates with yields below 3%. More than 92% of all rate cuts since 1960 have come from higher levels of the Fed Funds Rate. Almost 99% have come when the unemployment rate was higher than the latest reading. And nearly 65% have come when the inflation rate is higher than it currently stands. In response to a minor recession in 1960 which bled into early-1961, Fed Chair William McChesney Martin cut rates ten times while the Fed Funds Rate was below 3% over the course of two years or so (rates were also raised twice during this time). But the unemployment rate was much higher in those days because of the recession, topping out at more than 7% in 1961. The current unemployment rate stands at just 3.7%, the lowest it’s been since 1969. In fact, the last time the Fed cut interest rates with the unemployment rate so low was in July of 1969, when they cut a quarter of a percent. But yields were much higher at that time as inflation was just beginning to take off heading into the 1970s. The Federal Funds Rate was nearly 9% during that rate cut in 1969 and the Fed would actually reverse course and raise rates the very next month in an effort to stave off inflation. There was only one instance since 1960 where both the unemployment rate and the Fed Funds Rate were sub-4% when the Fed cut rates, which occurred in the summer of July 1967. That cut didn’t last for long as the Fed raised rates twice before the end of that year. Inflation was fast approaching 6% heading into the 1970s and would reach double-digits by the end of that decade. The latest reading stood at just 1.6%. The only other time we’ve seen the Fed cut rates with inflation below 2% was during the early-1960s, but again that was in the midst of a recession. So the current period is unique. Interest rates, unemployment, and inflation are all low by historical standards. And this would be the first rate cut in over a decade. Plus there’s the fact that stocks have once again been hitting all-time highs in recent weeks. It’s quite possible the only reason the Fed began its hiking cycle in late-2015 is to give themselves the option to then cut rates yet again, which appears to be the current strategy. In the short-term, any Fed actions likely provide more of a psychological impact on the markets than a lasting change in fundamentals. The short-term impact on the markets will always be driven by whichever story investors decide to latch onto. Some will assume a rate cut will signal a weakening economy. Others will assume the Fed will ease in time to keep the party going. Eventually, those short-term narratives have to be backed up by long-term fundamentals or they run the risk of being outed as frauds. Even with nearly 140 rate cuts since 1960, there have been 30 double-digit stock market corrections and 8 recessions in the U.S. over that time. Regardless of what they do, the Fed can’t fight off recessions or bear markets forever. More must-read stories from Fortune : —Meet the A.I. landlord that’s building a single-family-home empire —You might have longer than you think to invest for retirement — Will the Fed cut interest rates to prevent recession? 6 predictions —Schwab’s ‘Project Bear’ uses A.I. to predict when investors are getting nervous —When the next recession hits , four good things could happen Don’t miss the daily Term Sheet , Fortune ‘s newsletter on deals and dealmakers.'

Alan Turing Chosen as New Face of England’s £50 Note

Personal Finance Geek.com

The Bank of England announced that Alan Turing will appear on the new £50 polymer note (via Bank of England) Alan Turing will be the new face of England’s £50 note.
'The Bank of England announced that Alan Turing will appear on the new £50 polymer note (via Bank of England) \t\t\t\t\t\t\t\t\t \t\t\t\t Alan Turing will be the new face of England’s £50 note. The Bank of England on Monday announced that Turing—the father of artificial intelligence—will appear on the new polymer bill, expected to enter circulation by the end of 2021. Best known for his work devising code-breaking machines during WWII, Benedict Cumberbatch Turing played a pivotal role in the development of early computers and helped set the foundations for work on artificial intelligence. His idea that a computer could be said to “think” if a human interrogator couldn’t tell it apart, through conversation, from a human being—aka the Turing test—is still employed today, more than half a century later. “Alan Turing was an outstanding mathematician whose work has had an enormous impact on how we live today,” Mark Carney, Governor of the Bank of England, said in a statement. “As the father of computer science and artificial intelligence, as well as [a] war hero, Alan Turing’s contributions were far ranging and path breaking. Turing is a giant on whose shoulders so many now stand.” Too bad his accomplishments were never fully recognized in his home country during his lifetime. A gay man in the early 20th century, Turing was forcibly oppressed by laws that mandated homosexuality a criminal offense in the UK. He was prosecuted in 1952, and accepted chemical castration treatment as an alternative to prison. Turing died in 1954—16 days before his 42nd birthday—from cyanide poisoning in an apparent (yet disupted) suicide. More than five decades later, British Prime Minister Gordon Brown made an official public apology on behalf of the government for the “appalling way [Turing] was treated.” He received a posthumous pardon from the Queen in 2013. Following a six-week public nomination period last year, the Bank of England narrowed down a total 989 eligible candidates in the field of science to a short list of 12. From all corners of UK science, the dirty dozen included: Mary Anning (paleontologist) Paul Dirac (theoretical physicist) Rosalind Franklin (chemist) William and Caroline Herschel (astronomers) Dorothy Hodgkin (Nobel Prize-winning chemist) Ada Lovelace and Charles Babbage (mathematicians) Stephen Hawking (theoretical physicist) James Clerk Maxwell (mathematical physicist) Srinivasa Ramanujan (mathematician) Ernest Rutherford (“father of nuclear physics”) Frederick Sanger (Nobel Prize-winning biochemist) Alan Turing “The strength of the shortlist is testament to the UK’s incredible scientific contribution,” according to Sarah John, Bank of England chief cashier. “The breadth of individuals and achievements reflects the huge range of nominations we received for this note and I would [like] to thank the public for all their suggestions of scientists we could celebrate.” The new £50 note, as shown in the concept image above, will celebrate Turing through images of the man himself, as well as his pioneering work with computers. It also features a quote from Turing, his signature, and ticker tape depicting his birth date (June 23, 1912) in binary code. A full design—including all the security features—will be unveiled closer to the bill entering circulation. The last of the Bank of England collection to switch from paper to polymer, the £50 note was once described as the “currency of corrupt elites,” and is the least used in daily transactions, according to the BBC . More on Geek.com: Alan Turing Gets His Own Edition of Monopoly British Justice Department Rejects Pardon for Alan Turing Rare ‘Unicorns’ of US Paper Money Could Fetch Millions in Auction'

N26 announces N26 You, a revamped premium account

Personal Finance TechCrunch

Challenger bank N26 has unveiled a new premium plan called N26 You. This plan replaces N26 Black with the same benefits and a few tweaks. N26 is keeping its three-tier system with a free basic bank account, a premium account (N26 You) and a super
'Challenger bank N26 has unveiled a new premium plan called N26 You . This plan replaces N26 Black with the same benefits and a few tweaks. N26 is keeping its three-tier system with a free basic bank account, a premium account (N26 You) and a super premium account (N26 Metal). With N26’s free plan, you can pay anywhere in the world without any foreign transaction fee, but there’s a 1.7% markup on ATM withdrawals in a foreign currency. N26 You costs the same price as the previous premium plan N26 Black, €9.90 in the Eurozone and £4.90 in the U.K. In addition to a travel and purchase insurance package, you can withdraw money without any foreign transaction fee. €9.90 is roughly what you’d pay in fees if you withdraw the equivalent of €580 with a free N26 account. You can also create up to 10 Spaces to organize your money with savings goals, separate sub-accounts and more — free accounts can only create two Spaces. And of course, you get a better looking card. N26 is reusing its pastel color palette to give you more options. You can now choose between five different colors — Aqua, Rhubarb, Sand, Slate and Ocean. The card has a minimal design with a tiny N26 logo in the top left corner, a transparent line at the bottom of the card and a solid color background. N26 also plans to add perks to the N26 You plan, such as discounts on Hotels.com, WeWork, GetYourGuide, Babbel, Blinkist and Bloom & Wild. Those perks were limited to N26 Metal customers in the past, so it’s going to be interesting to see how the lineup will work once those perks are added to N26 You. If you’re an existing N26 Black customer, you automatically become an N26 You customer. Changing N26 Black to a premium plan with multiple card designs might seem like a small detail, but it potentially opens up a lot of possibilities. You’ll soon be able to order an additional card. Eventually, you could imagine having a blue card associated with your main account and a yellow card associated with a shared Space sub-account for instance. At least, that’s what I hope the company will do.'

Deutsche Bank cutting space at new office prior to move

Personal Finance New York Post

Embattled Deutsche Bank is downsizing so fast it’s giving up some of its relocation space at Time Warner Center before it even moves in. The German giant has already returned two floors to landlord Related Companies, sources told Realty Check.
'Embattled Deutsche Bank is downsizing so fast it’s giving up some of its relocation space at Time Warner Center before it even moves in. The German giant has already returned two floors to landlord Related Companies, sources told Realty Check. Although the floors contain only about 60,000 square feet of the 1.1 million square feet..'

Curve, the ‘over-the-top’ banking platform, raises $55M at a $250M valuation

Personal Finance TechCrunch

Curve, the London-based “over-the-top banking platform,” has raised $55 million in new funding. The startup lets you consolidate all of your bank cards into a single Curve card and app to make it easier to manage your spending and access other
'Curve , the London-based “over-the-top banking platform,” has raised $55 million in new funding. The startup lets you consolidate all of your bank cards into a single Curve card and app to make it easier to manage your spending and access other benefits. Curve’s Series B round is led by Gauss Ventures, the U.S.-based fintech investor, alongside Creditease, IDC Ventures and previous backer Outward VC (formerly Investec’s INVC fund). A number of other early investors, including Santander InnoVentures, Breega, Seedcamp and Speedinvest also followed on. The new round of funding values Curve at $250 million (or one-quarter unicorn, so to speak), and will be used by the company to continue adding more features to its platform and for further European expansion. The company claims 500,000 users and says it is on track to reach 1 million by the end of the year. Curve is currently available in 31 countries across Europe, with around 30% of its customer base coming from outside the U.K. “We [have] identified a few countries where the organic pull is fantastic, and we are about to double down on them,” Curve founder and CEO Shachar Bialick tells me. Like a plethora of fintech startups, Curve is building a platform that essentially turns your mobile phone into a financial control centre that re-bundles disparate financial products or functionality to offer a single app to help you manage “all things money.” However, rather than building a new current account — as is the case with the challenger banks such as Monzo, Starling and Revolut — Curve’s “attack vector” is a card and app that lets you connect all of your other debit and credit cards ( sans Amex ) so you only ever have to carry a single card. Once you’ve added your cards to Curve, you use the app to switch from which underlying debit or credit cards you wish the Curve Mastercard to spend, and can track and see a single and consolidated view of your spending regardless of which card was charged (and therefore which of your bank accounts the money was pulled from). In other words, Curve isn’t asking to replace your existing bank accounts but is pitched as a cloud-based platform that runs “over-the-top” of existing banking and payments infrastructure. Historically, the over-the-top terminology has been used to describe the way video streaming services such as Netflix run “over-the-top” of existing broadband infrastructure. “For Curve to succeed in its mission of bringing banking to the cloud, we need [to continue] to build the product; tiny experiences that together create a whole new offering,” Bialick continues. “Our money is everywhere and the job of connecting it all together to one seamless experience requires many resources, and especially many talented people. The latest Series B will enable Curve to re-bundle more of your money: experiences such as Curve Send (peer-to-peer payments), and Curve Credit (post transaction installments for any payment, anywhere).” Alongside Curve’s all-your-cards-in-one functionality, the Curve app lets you lock your Curve card at a touch of a button, provides instant spend notifications, “zero FX fees” when spending abroad or in a foreign currency and the ability to switch payment sources retroactively. The latter is dubbed “Go Back in Time” and means if you make a purchase via Curve that gets charged to a card other than the one you intended, you have two weeks to change your mind. More recently, Curve has re-vamped its cashback feature in a bid to draw in more customers for the premium versions of the Curve card. With the new Curve Cash programme, customers get 1% instant cash back on top of any existing rewards cards that they have plugged into the app, potentially earning customers double rewards on purchases. You simply pick from the list of retailers supported for cashback — you are allowed to choose between three and six retailers, depending on which Curve plan you are on — and then get 1% cashback for any purchases made at those stores. Bialick claims that Curve’s over-the-top model is also producing higher engagement than many challenger banks, with customers spending on average £1,500 per month through the Curve platform. (As an imperfect reference point, challenger bank Monzo says that around 30% of its users top up their account by £1,000 or more per month). I’m also told that 15% of Curve’s users have added a challenger bank card to their Curve account, which also makes for an intriguing and even more nuanced comparison. And whilst Curve is arguably trying to define a new market category — at least here in the West — and therefore isn’t the easiest of products to explain, Bialick says that existing Curve customers are the startup’s biggest advocates. “There isn’t just one thing that pulls customers to Curve, there are as many pulls as [there are] the number of ‘money jobs’ one has. All your cards in one, fee-free spending abroad, ‘Go Back In Time,’ to name a few, all attract and retain our customer base. Indeed, awareness and brand building is key, especially amongst all the noise, but that’s where our customers are proving invaluable, telling their friends about Curve, which drives most of our adoption with 2,000 plus new accounts per day.” To win in this new category of banking, Bialick says the company needs to steadfastly stick to its mission to reduce the number of steps it takes to carry out everyday money-related tasks. “The winners will be the companies… [that] create the most seamless experience, removing as much friction between the customer and their money.”'