Fed Cuts Interest Rates For The First Time Since 2020: What It Means For You
Plus, Walkie-talkies explode in second day of attacks across Lebanon; Boeing starts furloughs amid strike
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Good morning,
Hear any similarities? Enough to say it was copied? Well, Tempo Music Investments, which owns a portion of the copyright to Bruno Mars' track ‘When I Was Your Man’, sued Miley Cyrus on Monday, alleging her hit ‘Flowers’ copied the tune.
The case, which does not include Mars, points to substantial similarities in the melody, lyrics, harmony and chorus.
Cyrus’s hit song was released on her ex-husband Liam Hemsworth's birthday in 2023. The song helped her win her first Grammys, including the coveted Record Of The Year award.
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Mosheh & Jill
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📌 WHAT THE FED’S MAJOR INTEREST RATE CUTE MEANS FOR MAIN STREET
The Federal Reserve on Wednesday moved aggressively to start cutting interest rates for the first time since the pandemic.
A look at the numbers: It was a bigger rate cut than some analysts had expected— half a percentage point compared to a quarter percentage point.
It signals that the Fed is growing less concerned about getting inflation under control— the reason it started to raise rates in 2022— and instead is now focused on improving the job market and preventing a recession.
A higher interest rate is used to slow down the economy and offset inflation; while a lower rate is designed to encourage spending and boost hiring.
MAIN STREET IMPACTS
The move paves the way for lower borrowing costs. Prior to Wednesday, the 5.3% rate was at its highest level since 2007. Now it’s about 4.9%. Over time, the move could boost Americans’ finances and spur more spending and growth. The ripple effects could be felt in many consumer areas:
Credit cards: Many borrowers are facing some of the highest credit card interest rates in decades— around 23%. Those will start to drop.
Buying a home: The Fed’s move tends to have an indirect impact on mortgage rates, making one piece of the home buying equation more affordable.
A 30-year fixed mortgage has already gone down from almost 8% last year to 6.2%. But experts say those amazing 2-3% Covid rates are not coming back anytime soon.
Savers: Eventually, yields for savers will decline as the Fed lowers its benchmark rate. So, now is the time to lock in high savings rates.
HOW LOW CAN YOU GO?
The Fed’s board of governors was pretty unanimous, voting 11 to 1 to lower rates by .5%. The vote signals that “the Committee has gained greater confidence that inflation is moving sustainably toward 2%,” which is the goal.
The Fed said they hope to cut rates another half a point this year and have two more meetings to do so.
Outside of the emergency rate cuts during Covid, the last time the fed cut rates by half a point was in 2008 during the global financial crisis.
Some critics say it’s too much, too fast; while others are criticizing how long the move took.
📌 HEZBOLLAH WALKIE-TALKIES EXPLODE IN SECOND WAVE OF ISRAELI ATTACKS IN LEBANON
For the second straight day, electronic devices exploded across Lebanon Wednesday. It appears Israel blew up thousands of two-way personal radios used by Hezbollah terrorists.
Lebanon’s health ministry says at least 20 people were killed and more than 450 wounded on Wednesday. One of the blasts took place near a funeral organized for those killed the previous day. Tuesday’s original blasts killed at least 12 people and injured about 3,000.
Some experts think this is a precursor to a larger battle between Israel and Iran-backed terror group.
THE SECOND HIT
Lebanese security sources say the handheld radios were purchased by the Hezbollah terror group about five months ago at the same time as the pagers.
Israel has not taken responsibility for the operations, but its spy agency, Mossad, has a long history of sophisticated operations on foreign soil.
It is thought to be a complex operation, months in the making, where Israel infiltrated the supply chain and rigged hundreds of pagers and radios with explosives before they were imported to Lebanon. They NY Times reported based on multiple intelligence sources that the Hungarian manufacturer of the devices actually was a front for Israeli intelligence.
Israeli sources told Axios’s Barak Ravid that Israel’s goal in the second wave of attacks was to increase paranoia in Hezbollah’s ranks, and “convince Hezbollah that it is in its interest to disconnect itself from Hamas and cut a separate deal for ending the fighting with Israel regardless of a ceasefire in Gaza.”
Hezbollah has launched more than 8,000 rockets and hundreds of drone attacks that killed dozens of Israelis and injured hundreds more over the last year.
Remember: Hezbollah started attacking Israel in solidarity with Hamas— both are funded by Iran as part of it’s “Axis of Resistance.”
WHAT’S NEXT
Speaking to Israeli troops on Wednesday, Israeli Defense Minister Yoav Gallant said, “We are at the start of a new phase in the war. The center of gravity is shifting to the north through the diversion of forces and resources,” he added.
📌 MASSIVE BOEING STRIKE HITS THE CORPORATE SUITE
Troubles continue for Boeing. The aviation giant announced Wednesday that tens of thousands of non-union employees will be furloughed amid a nearly week-long unionized machinist strike.
More than 30,000 factory workers in the northwest of the US went on strike on Friday over pay and retirement packages. Boeing offered a 25% pay raise over four years, but workers want 40% over three years and restore pensions. 96% of members voted to strike.
Industry observers note that the strike also stems from years of built-up frustrations.
Negotiations between the union and the company restarted yesterday with a federal mediator, but in the meantime the strike is taking a financial toll.
THE MOVE
Boeing CEO Kelly Ortberg, who has only been on the job for six weeks, said affected employees would take one week of furlough every four weeks for the strike’s duration. Executives "will take a commensurate pay reduction for the duration of the strike,” he added.
Tightening the belt: On Monday the company announced it was pausing all hiring, pay raises, promotions, non-essential business travel, corporate first- and business-class travel, spending on outside consultants, charitable contributions, catering at Boeing facilities, and marketing.
The company is trying to move past safety concerns, spurred by the blowout of a door plug mid-flight in January. Then, there are the NASA astronauts stuck in space following the spaceship leaks and the multiple whistleblower suites. The company is also $60 billion in debt.
⏳ SPEED READ
🚨NATION
📌 25 people injured in tractor accident at Wisconsin apple orchard (CBS NEWS)
📌 Harvey Weinstein pleads not guilty to new indictment charging him with criminal sex act (ABC NEWS)
📌 US sues owner of cargo ship that destroyed Baltimore bridge over cleanup costs (REUTERS)
📌 Kentucky governor signs executive order banning conversion therapy (NBC NEWS)
🌎 AROUND THE WORLD
📌 Ukraine says it wiped a key Russian missile and artillery arsenal 'off the face of the earth' in long-range strikes (BUSINESS INSIDER)
📌 Venezuela's Gonzalez says he was forced to sign letter accepting court ruling of Maduro victory (REUTERS)
📌 In Kashmir, voting begins in first local elections since India revoked autonomy (NPR)
📌 Kate Middleton returns to royal duties days after revealing she is cancer-free (FOX NEWS)
📱BUSINESS, SCIENCE & TECH
📌 US overdose deaths plummet, saving thousands of lives (NPR)
📌 Iconic Tupperware Brands seeks Chapter 11 bankruptcy (ABC NEWS)
📌 GM electric vehicles can finally access Tesla Superchargers (VERGE)
📌 Deep links between alcohol and cancer are described in new report (NY POST)
🎬 SPORTS & ENTERTAINMENT
📌 ‘SNL’ announces Jean Smart, Ariana Grande, Michael Keaton and more as Season 50 hosts (NBC NEWS)
📌 "Shark Tank" taps KIND Snacks' founder Daniel Lubetzky as regular as Mark Cuban departs (DEADLINE)
📌 Sean ‘Diddy’ Combs again denied bail in sex trafficking and racketeering case (GUARDIAN)
📌 Eli Manning leads 1st-time Pro Football Hall of Fame nominees for Class of 2025 (ESPN)
🗓 ON THIS DAY: SEPTEMBER 19
1796: President George Washington delivered his Farewell Address, as he steps down after two terms in office. Printed in a Philadelphia newspaper, he implored America to avoid entangling alliances with Europe and warned about the dangers of forming political parties here at home.
1970: "The Mary Tyler Moore Show" premiered on CBS-TV.
1995: The New York Times and The Washington Post published the Unabomber manifesto following encouragement from authorities in hopes it could help break the case. The 35,000-word anti-technology document, anonymously written, had launched a bombing campaign that killed 3 and wounded 23. David Kaczynski recognized the writing style to be like his brother, Ted, who was later captured and convicted of the attacks.
1999: The Dixie Chicks, now know as the Chicks, become the first country group to top the Billboard albums chart when ‘Fly’ debuts at #1 with hits like ‘Ready to Run.’