Economists: Rising inflation might prompt Fed to rethink rate cuts | China aims for more productive trade talks; Trump open to interim deal | Banks turn to nontraditional metrics for loan approval
September 13, 2019
Financial Services SmartBrief
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Economists: Rising inflation might prompt Fed to rethink rate cuts
A majority of economists say a significant increase in US core consumer prices last month is unlikely to keep the Federal Reserve from reducing interest rates next week, but it could make further cuts before year-end less likely, a Reuters survey finds. "The Fed will still cut rates next week to provide added insurance in the event that the trade war escalates, but it might think twice about moving again in October if core inflation shows any further spark," BMO Capital Markets economist Sal Guatieri says.
Reuters (9/12) 
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Industry Watch
China aims for more productive trade talks; Trump open to interim deal
Chinese officials are considering measures to make the next round of trade negotiations with the US more focused and productive, sources say. China reportedly might seek to set national security issues aside for separate discussions, increase US agricultural imports and offer easier US access to Chinese markets. Meanwhile, President Donald Trump has indicated willingness to accept an interim agreement.
The Wall Street Journal (tiered subscription model) (9/12),  CNBC (9/12) 
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Banks turn to nontraditional metrics for loan approval
Goldman Sachs and other major banks are experimenting with alternative metrics to decide whether to loan to a customer. Instead of relying on financial history, lenders are using metrics such as shopping habits and whether phone bills are paid on time.
The Wall Street Journal (tiered subscription model) (9/12) 
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Bowman approved for 14-year Fed term
Michelle Bowman was confirmed by the US Senate for a 14-year term on the Federal Reserve Board of Governors. President Donald Trump appointed Bowman last year to fill Vice Chair Stanley Fischer's unexpired term and nominated her to a full-term in April.
Reuters (9/12) 
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O'Rourke says banks should stop servicing some gun sales
Banks and credit card companies should not support sales of assault-style weapons and any firearm sold without and background checks, said former Congressman and current Democratic presidential candidate Beto O'Rourke. Most banks did not comment but Bank of America announced earlier this year they would stop making loans to companies that make military-style firearms for sale to civilians.
The New York Times (tiered subscription model) (9/12) 
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Mnuchin: US might issue 50-year bond next year
The US Treasury Department is considering issuing a 50-year bond in 2020 to capitalize on low interest rates and to offset fast-rising borrowing costs, Secretary Steven Mnuchin says. Bonds with maturity of more than 30 years were evaluated, then abandoned, by the Treasury in 2017, but Mnuchin says there is demand for them.
The Wall Street Journal (tiered subscription model) (9/12) 
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Draghi's final move puts pressure on successor, other central banks
In his swan song as head of the European Central Bank, Mario Draghi has left successor Christine Lagarde in a position in which she likely will have to uphold relaxed monetary policy long term. The ECB's decision to cut interest rates and to resume bond purchases also raises pressure on central banks in the US and Japan to follow suit.
Reuters (9/12),  Bloomberg (tiered subscription model) (9/12) 
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The Latest from Capitol Hill
Court case could lead to changes at CFPB
The future of the Consumer Financial Protection Bureau is in question if a court rules that the single-director structure is unconstitutional. The ruling could eliminate a clause that says the director can only be fired for cause, leaving CFPB Director Kathy Kraninger vulnerable if a Democrat becomes president.
American Banker online (free content) (9/12) 
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Retirement Security
Retirees should consider these tax issues
Taxes in retirement can be a complex issue. Here are four factors for retirees to consider, beginning with the need to take a proactive approach to tax planning.
Kiplinger online (9/11) 
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Technology in the Financial Industry
Survey: London fintechs unprepared for no-deal Brexit
Fewer than 25% of London's fintech firms could manage the fallout of the UK leaving the EU at the end of October without a deal in place, a survey by trade body Innovate Finance finds. About two-thirds of respondents feel Brexit offers no clear advantages for their business.
Financial News (UK) (subscription required) (9/12) 
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Ditch the dream and be a doer, not a dreamer.
Shonda Rhimes,
television producer, writer
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