Tesla and SpaceX CEO Elon Musk has endorsed a controversial idea that could reshape US economic policy: allowing the president to have direct influence over Federal Reserve decisions, according to a detailed report by CNBC.

Musk’s endorsement came on Friday in response to a social media post by Senator Mike Lee (R-Utah), who called for the Federal Reserve to be brought under presidential control, ending its long-standing independence. Lee's tweet included the hashtag #EndtheFed, and Musk responded with a simple “100” emoji, signaling his agreement, explained the CNBC report further.

Pressure is building up to reduce autonomy of the Federal Reserve<o:p></o:p>

The endorsement is significant as it reflects growing pressure from some conservative figures, including Musk and Trump supporters, to reduce the autonomy of the central bank. This pressure could intensify if Donald Trump returns to the White House in 2024, signalling a potential shift in economic policy priorities.

Senator Lee’s proposal aims to give the president direct authority over the Federal Reserve, including control over its monetary policy decisions, such as setting interest rates. Traditionally, the Federal Reserve operates independently from the executive branch to shield its decisions from political pressures. This independence is seen as crucial for making objective, long-term economic choices based on data rather than political considerations.

However, this tradition has been increasingly challenged, especially by Trump. During his first term, Trump frequently criticized Fed Chairman Jerome Powell, publicly disagreeing with his policies and even suggesting that Powell should be replaced.

Powell reiterated that he would not resign<o:p></o:p>

Further, in a recent statement, Powell reiterated that he would not resign if Trump asked him to, signalling a potential return to tension between the White House and the Federal Reserve under another Trump presidency.

The issue of presidential influence over the Fed gained additional traction during the 2024 campaign. Trump has repeatedly suggested that the president should have a greater role in shaping US monetary policy.

In August, he argued that his business success and financial acumen gave him better instincts than the economists at the Federal Reserve. "I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman," Trump said during a press conference at his Mar-a-Lago estate, the CNBC report explained further.

Musk’s endorsement of Lee’s call to #EndtheFed is part of a broader movement that seeks to reshape the economic governance of the United States, and could become a key issue in the coming years.

As debates over Fed independence intensify, the future of US monetary policy remains uncertain, with the potential for significant shifts depending on how things evolve in the global economy

Tesla and SpaceX CEO Elon Musk has endorsed a controversial idea that could reshape US economic policy: allowing the president to have direct influence over Federal Reserve decisions, according to a detailed report by CNBC.

Tesla and SpaceX CEO Elon Musk has endorsed a controversial idea that could reshape US economic policy: allowing the president to have direct influence over Federal Reserve decisions, according to a detailed report by CNBC. Musk’s endorsement came on Friday in response to a social media post by Senator Mike Lee (R-Utah), who called for the Federal Reserve to be brought under presidential control, ending its long-standing independence. Lee's tweet included the hashtag #EndtheFed, and Musk responded with a simple “100” emoji, signaling his agreement, explained the CNBC report further. Pressure is building up to reduce autonomy of the Federal Reserve The endorsement is significant as it reflects growing pressure from some conservative figures, including Musk and Trump supporters, to reduce the autonomy of the central bank. This pressure could intensify if Donald Trump returns to the White House in 2024, signalling a potential shift in economic policy priorities. Senator Lee’s proposal aims to give the president direct authority over the Federal Reserve, including control over its monetary policy decisions, such as setting interest rates. Traditionally, the Federal Reserve operates independently from the executive branch to shield its decisions from political pressures. This independence is seen as crucial for making objective, long-term economic choices based on data rather than political considerations. However, this tradition has been increasingly challenged, especially by Trump. During his first term, Trump frequently criticized Fed Chairman Jerome Powell, publicly disagreeing with his policies and even suggesting that Powell should be replaced. Powell reiterated that he would not resign Further, in a recent statement, Powell reiterated that he would not resign if Trump asked him to, signalling a potential return to tension between the White House and the Federal Reserve under another Trump presidency. The issue of presidential influence over the Fed gained additional traction during the 2024 campaign. Trump has repeatedly suggested that the president should have a greater role in shaping US monetary policy. In August, he argued that his business success and financial acumen gave him better instincts than the economists at the Federal Reserve. "I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman," Trump said during a press conference at his Mar-a-Lago estate, the CNBC report explained further. Musk’s endorsement of Lee’s call to #EndtheFed is part of a broader movement that seeks to reshape the economic governance of the United States, and could become a key issue in the coming years. As debates over Fed independence intensify, the future of US monetary policy remains uncertain, with the potential for significant shifts depending on how things evolve in the global economy

Musk supports Trump’s push to weaken Fed independence

The US banking system is in chaos again as shares of the First Republic Bank (FRC) dropped 70 per cent in pre-market trading on Monday. This comes after Silicon Valley Bank (SVB), the financial organisation that dealt&nbsp;with only tech startups in the country, collapsed. The First Republic Bank on Friday closed 15 per cent lower at $81.76. This comes despite the FRC insisting its capital and liquidity are "very strong"&nbsp;and that regulators rolled out measures "designed to stabilise the finance industry in the US."

Regional banks' shares&nbsp;tumble&nbsp;

It was just not SVB and FRC, even other regional bank stocks tumbled, prompting trading halts. The FRC said it had access to some additional credit from Fed and JPMorgan Chase &amp; Co. (JPM) pointing out that "total available and unused liquidity to fund its operations is still over $70 billion."&nbsp;

Regional lenders Western Alliance Bancorp (WAL) declined 82 per cent and the PacWest Bancorp (PACW) tumbled by over half before trading was halted.&nbsp;

US President Joe Biden had earlier assured the country's banking system was safe but after the collapse of SVB and Signature Bank, he called for full accountability.

The Silicon Valley Bank was hit by one of the oldest problems in the banking industry- a bank run, which led to its failure. It was one of the largest failures of a financial organisation in the US after the collapse of Washington Mutual which occurred at the height of the financial crisis over a decade ago.&nbsp;

The SVB bank was hit by the downturn in technology stocks as well as when the Federal Reserve planned to increase its interest rates to combat inflation.&nbsp;

Due to the collapse of SVB, many startups that had ties to the lender scrambled to pay their workers and feared that they might have to pause their projects or lay off staff.

The SVB had bought bonds worth billion of dollars using its customers' deposits over the past few years.&nbsp;

These investments were typically considered to be safe, but the value of those investments fell because they paid lower interest rates than what today a bond would pay if issued in today’s higher interest rate environment. 
&nbsp;

The US banking system is in chaos again as shares of the First Republic Bank (FRC) dropped 70 per cent in pre-market trading on Monday. This comes after Silicon Valley Bank (SVB), the financial organisation that dealt with only tech startups in the country, collapsed.

The US banking system is in chaos again as shares of the First Republic Bank (FRC) dropped 70 per cent in pre-market trading on Monday. This comes after Silicon Valley Bank (SVB), the financial organisation that dealt with only tech startups in the country, collapsed. The First Republic Bank on Friday closed 15 per cent lower at $81.76. This comes despite the FRC insisting its capital and liquidity are "very strong" and that regulators rolled out measures "designed to stabilise the finance industry in the US." Regional banks' shares tumble It was just not SVB and FRC, even other regional bank stocks tumbled, prompting trading halts. The FRC said it had access to some additional credit from Fed and JPMorgan Chase & Co. (JPM) pointing out that "total available and unused liquidity to fund its operations is still over $70 billion." Regional lenders Western Alliance Bancorp (WAL) declined 82 per cent and the PacWest Bancorp (PACW) tumbled by over half before trading was halted. US President Joe Biden had earlier assured the country's banking system was safe but after the collapse of SVB and Signature Bank, he called for full accountability. The Silicon Valley Bank was hit by one of the oldest problems in the banking industry- a bank run, which led to its failure. It was one of the largest failures of a financial organisation in the US after the collapse of Washington Mutual which occurred at the height of the financial crisis over a decade ago. The SVB bank was hit by the downturn in technology stocks as well as when the Federal Reserve planned to increase its interest rates to combat inflation. Due to the collapse of SVB, many startups that had ties to the lender scrambled to pay their workers and feared that they might have to pause their projects or lay off staff. The SVB had bought bonds worth billion of dollars using its customers' deposits over the past few years. These investments were typically considered to be safe, but the value of those investments fell because they paid lower interest rates than what today a bond would pay if issued in today’s higher interest rate environment.

US: First Republic Bank drops 70% amid Silicon Valley Bank collapse, regional banks raise concern

As Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.

Laurence Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mnuchin and Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.”

While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.

Mnuchin held 60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on March 23, 2020, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash.

Mnuchin spoke to Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Fink joined Mnuchin, Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mnuchin’s calendars.

The records reveal how often federal officials engaged with a Wall Street executive at a moment of crisis, as they strategized about how to turn around markets that were descending into chaos.

Fink’s firm is a huge player across many stock and debt markets and its advisory arm helped to execute some of the Fed’s crisis response during the 2008 financial meltdown. That market insight and experience got him a front-row seat at a pivotal moment, one that may have put him in a position to influence a rescue with huge ramifications for households, businesses and the entire U.S. economy.

“They’re about as close to a government arm as you can be, without being the Federal Reserve,” said William Birdthistle, a professor at the Chicago-Kent College of Law and the author of a book on funds.

On March 24, the New York Fed announced that it had again hired BlackRock’s advisory arm, which operates separately from the company’s asset-management business but which Fink oversees, this time to carry out the Fed’s purchases of commercial mortgage-backed securities and corporate bonds.

BlackRock’s ability to directly profit from its regular contact with the government during rescue planning was limited. The firm signed a nondisclosure agreement with the New York Fed on March 22, restricting involved officials from sharing information about the coming programs.

But how the Fed and Treasury devised their rescue package mattered to BlackRock. The company makes a profit by managing money for clients in an array of funds, generally charging a preset fee. It earns more when it grows its assets under management. In the early days of the coronavirus crisis, as people converted financial holdings into cash, parts of its asset base were contracting and its business outlook hinged on what happened in certain markets.

While the Fed and Treasury consulted with many financial firms as they drew up their response — and practically all of Wall Street and much of Main Street benefited — no other company was as front and center.

Simply being in touch throughout the government’s planning was good for BlackRock, potentially burnishing its image over the longer run, Birdthistle said. BlackRock would have benefited through “tons of information, tons of secondary financial benefits,” he said.

Mnuchin could not be reached for comment. Asked whether top Fed officials discussed program details with Fink before his firm had signed the nondisclosure agreement, the Fed said that Powell and Randal Quarles, a Fed vice chair who also appears in the emails, “have no recollection of discussing the terms of either facility with Mr. Fink.”

“Nor did they have any reason to do so because the Federal Reserve Bank of New York handled the process with great care and transparency,” the central bank added in its statement.

Brian Beades, a spokesman for BlackRock, highlighted that the firm had “stringent information barriers in place that ensure separation between BlackRock Financial Markets Advisory and the firm’s investment business” and said it was “proud to have been in a position to assist the Federal Reserve in addressing the severe downturn in financial markets during the depths of the crisis.”

The disclosed emails between Fed and BlackRock officials — 11 in all across March and early April — do not make clear whether the company knew about any of the Fed and Treasury programs’ designs or whether they were simply providing market information.

Emails indicate that Powell spoke with Fink on March 23, hours after the Fed announced its corporate bond program.

“Larry Fink is available to speak today regarding the project you will be working on together,” an email from Fink’s assistant directly to Powell said. “Please let us know if there is a convenient time for you.”

“Now is good,” Powell replied.

The call does not appear on the Fed chair’s official schedule from last March. Those calendars generally track scheduled events, and may have missed meetings in early 2020 when staffers were frantically working on the market rescue and the Fed was shifting to work from home, a central bank spokesman said.

Powell’s calendars did show that he talked to Fink in March, April and May, and he has previously answered questions about those discussions.

“I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that, to generally exchanging information,” Powell said at a July 2020 news conference, adding that it wasn’t “very many” conversations. “He’s typically trying to make sure that we are getting good service from the company that he founded and leads.”

BlackRock’s connections to Washington are not new. It was a critical player in the 2008 crisis response, when the New York Fed retained the firm’s advisory arm to manage the mortgage assets of the insurance giant American International Group and Bear Stearns.

Several former BlackRock employees have been named to top roles in President Joe Biden’s administration, including Brian Deese, who heads the White House National Economic Council, and Wally Adeyemo, who was Fink’s chief of staff and is now the No. 2 official at the Treasury.

The firm has grown rapidly: Its assets under management swelled from $1.3 trillion in early 2009 to $7.4 trillion in 2019. By the end of last year, they were $8.7 trillion.

As it expanded, it has stepped up its lobbying. In 2004, BlackRock Inc. registered two lobbyists and spent less than $200,000 on its efforts. By 2019 it had 20 lobbyists and spent nearly $2.5 million, though that declined slightly last year, based on OpenSecrets data. Campaign contributions tied to the firm also jumped, touching $1.7 million in 2020 (80% to Democrats, 20% to Republicans) from next to nothing as recently as 2004.

In March 2020, as some of BlackRock’s own offerings were being rocked at the pandemic’s onset in the United States, the firm reached out to Powell and Quarles, the emails show. In one or two cases, BlackRock appears to have had phone calls with Quarles. In others, Powell and Quarles did not reply, based on the released records.

The firm’s representatives also talked to Treasury policymakers other than Mnuchin in March, the emails show. One former official said such calls were part of routine information-gathering from a big market participant at a time when markets were rapidly falling apart.

BlackRock operates in short-term debt markets that came under intense stress as people and companies scrambled to move all of their holdings into cash. And problems were brewing in the corporate debt market, including in exchange-traded funds, which track bundles of corporate debt and other assets but trade like stocks.

Corporate bonds were difficult to trade and near impossible to issue in mid-March 2020. Prices on some high-grade corporate debt ETFs, including one of BlackRock’s, were out of whack relative to the values of the underlying assets, which is unusual.

People could still pull their money from ETFs, which both the industry and several outside academics have heralded as a sign of their resiliency. But investors would have had to take a financial hit to do so, relative to the quoted value of the underlying bonds. That could have bruised the product’s reputation in the eyes of some retail savers.

“This was the first time that ETFs came under stress in a really systemic way,” said Gregg Gelzinis, associate director for Economic Policy at the Center for American Progress.

The Fed’s programs helped to turn that around. The central bank supported the corporate bond market on March 23, 2020, by pledging to buy both already issued debt and new bonds. The program for existing bonds promised to also buy ETFs, because they are a quick way to get access to a wide swath of the market. The bond market and fund recovery was nearly instant.

When the New York Fed retained BlackRock’s advisory arm to make the purchases, it rapidly disclosed details of those contracts to the public. The firm did the program cheaply for the government, waiving fees for exchange-traded fund buying and rebating fees from its own iShares ETFs back to the New York Fed.

The Fed has explained the decision to hire the advisory side of the house in terms of practicality.

“We hired BlackRock for their expertise in these markets,” Powell has since said in defense of the rapid move. “It was done very quickly due to the urgency and need for their expertise.”

As Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.

As Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue. Laurence Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mnuchin and Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.” While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government. Mnuchin held 60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on March 23, 2020, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash. Mnuchin spoke to Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Fink joined Mnuchin, Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mnuchin’s calendars. The records reveal how often federal officials engaged with a Wall Street executive at a moment of crisis, as they strategized about how to turn around markets that were descending into chaos. Fink’s firm is a huge player across many stock and debt markets and its advisory arm helped to execute some of the Fed’s crisis response during the 2008 financial meltdown. That market insight and experience got him a front-row seat at a pivotal moment, one that may have put him in a position to influence a rescue with huge ramifications for households, businesses and the entire U.S. economy. “They’re about as close to a government arm as you can be, without being the Federal Reserve,” said William Birdthistle, a professor at the Chicago-Kent College of Law and the author of a book on funds. On March 24, the New York Fed announced that it had again hired BlackRock’s advisory arm, which operates separately from the company’s asset-management business but which Fink oversees, this time to carry out the Fed’s purchases of commercial mortgage-backed securities and corporate bonds. BlackRock’s ability to directly profit from its regular contact with the government during rescue planning was limited. The firm signed a nondisclosure agreement with the New York Fed on March 22, restricting involved officials from sharing information about the coming programs. But how the Fed and Treasury devised their rescue package mattered to BlackRock. The company makes a profit by managing money for clients in an array of funds, generally charging a preset fee. It earns more when it grows its assets under management. In the early days of the coronavirus crisis, as people converted financial holdings into cash, parts of its asset base were contracting and its business outlook hinged on what happened in certain markets. While the Fed and Treasury consulted with many financial firms as they drew up their response — and practically all of Wall Street and much of Main Street benefited — no other company was as front and center. Simply being in touch throughout the government’s planning was good for BlackRock, potentially burnishing its image over the longer run, Birdthistle said. BlackRock would have benefited through “tons of information, tons of secondary financial benefits,” he said. Mnuchin could not be reached for comment. Asked whether top Fed officials discussed program details with Fink before his firm had signed the nondisclosure agreement, the Fed said that Powell and Randal Quarles, a Fed vice chair who also appears in the emails, “have no recollection of discussing the terms of either facility with Mr. Fink.” “Nor did they have any reason to do so because the Federal Reserve Bank of New York handled the process with great care and transparency,” the central bank added in its statement. Brian Beades, a spokesman for BlackRock, highlighted that the firm had “stringent information barriers in place that ensure separation between BlackRock Financial Markets Advisory and the firm’s investment business” and said it was “proud to have been in a position to assist the Federal Reserve in addressing the severe downturn in financial markets during the depths of the crisis.” The disclosed emails between Fed and BlackRock officials — 11 in all across March and early April — do not make clear whether the company knew about any of the Fed and Treasury programs’ designs or whether they were simply providing market information. Emails indicate that Powell spoke with Fink on March 23, hours after the Fed announced its corporate bond program. “Larry Fink is available to speak today regarding the project you will be working on together,” an email from Fink’s assistant directly to Powell said. “Please let us know if there is a convenient time for you.” “Now is good,” Powell replied. The call does not appear on the Fed chair’s official schedule from last March. Those calendars generally track scheduled events, and may have missed meetings in early 2020 when staffers were frantically working on the market rescue and the Fed was shifting to work from home, a central bank spokesman said. Powell’s calendars did show that he talked to Fink in March, April and May, and he has previously answered questions about those discussions. “I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that, to generally exchanging information,” Powell said at a July 2020 news conference, adding that it wasn’t “very many” conversations. “He’s typically trying to make sure that we are getting good service from the company that he founded and leads.” BlackRock’s connections to Washington are not new. It was a critical player in the 2008 crisis response, when the New York Fed retained the firm’s advisory arm to manage the mortgage assets of the insurance giant American International Group and Bear Stearns. Several former BlackRock employees have been named to top roles in President Joe Biden’s administration, including Brian Deese, who heads the White House National Economic Council, and Wally Adeyemo, who was Fink’s chief of staff and is now the No. 2 official at the Treasury. The firm has grown rapidly: Its assets under management swelled from $1.3 trillion in early 2009 to $7.4 trillion in 2019. By the end of last year, they were $8.7 trillion. As it expanded, it has stepped up its lobbying. In 2004, BlackRock Inc. registered two lobbyists and spent less than $200,000 on its efforts. By 2019 it had 20 lobbyists and spent nearly $2.5 million, though that declined slightly last year, based on OpenSecrets data. Campaign contributions tied to the firm also jumped, touching $1.7 million in 2020 (80% to Democrats, 20% to Republicans) from next to nothing as recently as 2004. In March 2020, as some of BlackRock’s own offerings were being rocked at the pandemic’s onset in the United States, the firm reached out to Powell and Quarles, the emails show. In one or two cases, BlackRock appears to have had phone calls with Quarles. In others, Powell and Quarles did not reply, based on the released records. The firm’s representatives also talked to Treasury policymakers other than Mnuchin in March, the emails show. One former official said such calls were part of routine information-gathering from a big market participant at a time when markets were rapidly falling apart. BlackRock operates in short-term debt markets that came under intense stress as people and companies scrambled to move all of their holdings into cash. And problems were brewing in the corporate debt market, including in exchange-traded funds, which track bundles of corporate debt and other assets but trade like stocks. Corporate bonds were difficult to trade and near impossible to issue in mid-March 2020. Prices on some high-grade corporate debt ETFs, including one of BlackRock’s, were out of whack relative to the values of the underlying assets, which is unusual. People could still pull their money from ETFs, which both the industry and several outside academics have heralded as a sign of their resiliency. But investors would have had to take a financial hit to do so, relative to the quoted value of the underlying bonds. That could have bruised the product’s reputation in the eyes of some retail savers. “This was the first time that ETFs came under stress in a really systemic way,” said Gregg Gelzinis, associate director for Economic Policy at the Center for American Progress. The Fed’s programs helped to turn that around. The central bank supported the corporate bond market on March 23, 2020, by pledging to buy both already issued debt and new bonds. The program for existing bonds promised to also buy ETFs, because they are a quick way to get access to a wide swath of the market. The bond market and fund recovery was nearly instant. When the New York Fed retained BlackRock’s advisory arm to make the purchases, it rapidly disclosed details of those contracts to the public. The firm did the program cheaply for the government, waiving fees for exchange-traded fund buying and rebating fees from its own iShares ETFs back to the New York Fed. The Fed has explained the decision to hire the advisory side of the house in terms of practicality. “We hired BlackRock for their expertise in these markets,” Powell has since said in defense of the rapid move. “It was done very quickly due to the urgency and need for their expertise.”

Top US officials consulted with BlackRock as markets melted down

A top Federal Reserve said on Sunday that US Congress is in position to spend a huge amount on coronavirus relief efforts because the nation's budget gap can be financed without relying on foreign borrowing, given how much Americans are saving.

A top Federal Reserve said on Sunday that US Congress is in position to spend a huge amount on coronavirus relief efforts because the nation's budget gap can be financed without relying on foreign borrowing, given how much Americans are saving. Also read: President Trump to act on Chinese software companies 'in coming days': Pompeo "Those of us who are fortunate enough to still have our jobs, we're saving a lot more money because we're not going to restaurants or movie theatres or vacations," Neel Kashkari, president of the Minneapolis Federal Reserve Bank, told CBS' "Face the Nation." "That actually means that we have a lot more resources as a country to support those who have been laid off," he said. US House of Representatives, led by the Democrats, has approved a $3 trillion relief bill in May, however, many in Senate Republicans have expressed concerns about mounting debt, countered by proposing a $1 trillion aid package last week. Treasury Secretary Steven Mnuchin, in an interview with ABC's "This Week", said that President Trump would spend what was needed, but the deficit was a factor. "There's obviously a need to support workers and support the economy," he said. "On the other hand, we have to be careful about not piling on enormous amount of debts for future generations." (Inputs from Agency)

US Congress in position to spend big on coronavirus relief: Federal Reserve official

Investors are preparing for more cautious capital investment outlooks from US companies as worries mount heading into earnings season about the possibility of an economic recession.

Capital expenditure increases have been weaker than last year, when corporate tax cuts helped to bolster spending, and some strategists say they may even fall short of Wall Street's expectations given the concerns about the economy and a prolonged trade war between the <a href="https://www.wionews.com/world/us-president-trump-says-he-wont-tie-biden-concerns-to-trade-deal-with-china-253812">United States </a>and China.

Less spending on technology, machinery, and other equipment would suggest corporate executives are less confident in the economy than they had been, another potential negative for the stock market, which has fallen this week amid a series of weak economic reports.

Capital expenditures are expected to have increased just 3.0 per cent in the third quarter from a year ago, which would be the lowest since the second quarter of 2017, when Capex declined slightly, according to data based on analysts' estimates compiled by Refinitiv's research senior manager, David Aurelio.

That estimate drops to 1.1 per cent in the fourth quarter, and year-over-year declines are projected in some quarters of 2020.

"It's very likely that Capex spending is going to be below expectations," said Kristina Hooper, chief global market strategist at Invesco in New York. "We are in a state of heightened economic policy uncertainty. That tamps down business investment."

Strategists said spending plans will be of particular interest as S&amp;P 500 companies discuss their results for the third quarter in the weeks ahead.

The reporting period begins with big banks including JPMorgan Chase and others reporting on October 15.

Results overall are expected to be relatively weak, with analysts forecasting earnings for S&amp;P 500 companies to have declined 2.7 per cent in the third quarter from a year ago, based on Refinitiv's data.

Recent dismal economic indicators have fuelled concerns that the United States was flirting with a recession.

Upbeat jobs data offered some relief for investors on Friday, but it came on the heels of a report this week showing manufacturing activity plunged to a more than 10-year trough in September. Other data showed US services sector activity slowed to a three-year low in September.

"There is a correlation between CEO confidence and Capex. And right now we've seen CEO confidence decrease, so again it's going to be a challenging environment for companies to go ahead and spend," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

While the trade war has eroded business confidence, easing monetary policy is expected to help because it reduces borrowing costs for businesses.

The US central bank cut rates last month after reducing borrowing costs in July for the first time since 2008. Bets the Federal Reserve will cut rates later this month by 25 basis points were at about 77 per cent on Friday, compared to 39.6 per cent on Monday, according to CME Group's FedWatch tool.

"This talk of whether or not we're going into a recession, that enforces prudence" by companies, said Quincy Krosby, chief market strategist at Prudential Financial, based in Newark, New Jersey. "Ultimately what they're worried about is revenue growth."

Investors are preparing for more cautious capital investment outlooks from US companies as worries mount heading into earnings season about the possibility of an economic recession.

Investors are preparing for more cautious capital investment outlooks from US companies as worries mount heading into earnings season about the possibility of an economic recession. Capital expenditure increases have been weaker than last year, when corporate tax cuts helped to bolster spending, and some strategists say they may even fall short of Wall Street's expectations given the concerns about the economy and a prolonged trade war between the United States and China. Less spending on technology, machinery, and other equipment would suggest corporate executives are less confident in the economy than they had been, another potential negative for the stock market, which has fallen this week amid a series of weak economic reports. Capital expenditures are expected to have increased just 3.0 per cent in the third quarter from a year ago, which would be the lowest since the second quarter of 2017, when Capex declined slightly, according to data based on analysts' estimates compiled by Refinitiv's research senior manager, David Aurelio. That estimate drops to 1.1 per cent in the fourth quarter, and year-over-year declines are projected in some quarters of 2020. "It's very likely that Capex spending is going to be below expectations," said Kristina Hooper, chief global market strategist at Invesco in New York. "We are in a state of heightened economic policy uncertainty. That tamps down business investment." Strategists said spending plans will be of particular interest as S&P 500 companies discuss their results for the third quarter in the weeks ahead. The reporting period begins with big banks including JPMorgan Chase and others reporting on October 15. Results overall are expected to be relatively weak, with analysts forecasting earnings for S&P 500 companies to have declined 2.7 per cent in the third quarter from a year ago, based on Refinitiv's data. Recent dismal economic indicators have fuelled concerns that the United States was flirting with a recession. Upbeat jobs data offered some relief for investors on Friday, but it came on the heels of a report this week showing manufacturing activity plunged to a more than 10-year trough in September. Other data showed US services sector activity slowed to a three-year low in September. "There is a correlation between CEO confidence and Capex. And right now we've seen CEO confidence decrease, so again it's going to be a challenging environment for companies to go ahead and spend," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. While the trade war has eroded business confidence, easing monetary policy is expected to help because it reduces borrowing costs for businesses. The US central bank cut rates last month after reducing borrowing costs in July for the first time since 2008. Bets the Federal Reserve will cut rates later this month by 25 basis points were at about 77 per cent on Friday, compared to 39.6 per cent on Monday, according to CME Group's FedWatch tool. "This talk of whether or not we're going into a recession, that enforces prudence" by companies, said Quincy Krosby, chief market strategist at Prudential Financial, based in Newark, New Jersey. "Ultimately what they're worried about is revenue growth."

Capital spending outlook another worry ahead of earnings

An Ecuadorian bank and Wells Fargo have reached an out-of-court settlement over a 2015 cyber heist, providing a possible precedent for the Bangladesh central bank's planned suit to recover $66 million still lost in one of the world's biggest such cases.

A suit by Ecuador's Banco del Austro against Wells Fargo & Co was quietly settled in February, less than a month before a trial date was set, and the US&nbspdistrict court in Manhattan sealed all discussions, according to court documents. No other major media has reported the settlement.

Wells Fargo did not comment on the settlement, and a representative for Banco del Austro could not be immediately reached. &nbsp

Banco had sought to hold Wells responsible for authorising the fraudulent transfer of $12 million from its account in 2015.&nbsp

Hackers breached Bangladesh Bank's systems in early 2016 and tricked the Federal Reserve Bank of New York into sending as much as $81 million to accounts at Rizal Commercial Banking Corp (RCBC) in the Philippines. The accounts were held in fake names and most of the money disappeared into casinos in Manila.

Some of the funds were recovered but about $66 million remains untraced.

No one has been criminally charged for the heist despite an international investigation and two years of finger-pointing among Bangladesh, Philippines, the Fed and the SWIFT communication network that was used. Bangladesh Bank has threatened to sue Manila-based RCBC, and any legal fallout could set a precedent amid a rash of electronic heists at financial institutions around the world.

"This is a tricky issue. We can`t reveal our strategy. But yes we are reviewing each and every case, including the Ecuador one," Bangladesh Bank`s deputy governor Abu Hena Mohd. Razee Hassan said in a recent interview.

While Bangladesh has not taken any legal action, bankers and lawyers saw the cyber-heist suit by Banco against Wells Fargo as a test for any options available to Bangladesh.&nbsp

They said the settlement could signal that Wells compensated Banco in some way, a possibly encouraging sign for Bangladesh Bank, But it could still struggle to get a hearing in the United States and prove that Manila-based RCBC had a contractual obligation to freeze the stolen funds.&nbsp

"There are an awful lot of reasons for people to settle (and) there are all sorts of laws that may or may not apply," said Peter Jaffe, a senior associate at Washington-based law firm Freshfields Bruckhaus Deringer LLP.&nbsp

"RCBC was not the one that was hacked. Someone may think that RCBC should have done something different when it saw money coming through its accounts, but that is not really a cybersecurity issue at that point," Jaffe said. "I don`t think you would necessarily look to cybersecurity law (or US&nbspcommercial code) to determine ... obligations and rights."

Obligation unclear

At issue is the New York Uniform Commercial Code, which says a bank that is tricked by thieves must reimburse the customer unless it can prove it used a mutually-agreed protocol for verifying the payment messages. The customer could counter that the security protocol was not "commercially reasonable."&nbsp

In 2016, the judge rejected an attempt by Wells to dismiss Banco`s allegations because the Manhattan court could not rule that use of SWIFT`s security system alone was enough.

Bangladesh has a correspondent-banking contract with the New York Fed, which has repeatedly stressed that each of its foreign clients has agreed that it can rely on SWIFT protocols. The payment messages it received from the hackers in February

2016 were verified by SWIFT and directed the Fed to send much of the funds to RCBC.&nbsp

It is unclear what obligation RCBC has to Bangladesh Bank and whether US&nbsplaw would apply.&nbsp

The Philippine bank said it had received advice from lawyers in the United States that it had "strong and valid" defences against any suit by Bangladesh Bank.

"There is no act attributable to RCBC which caused the loss or the theft from Bangladesh Bank," it said in a statement on Monday. "We reiterate that RCBC was merely a beneficiary bank, meaning, the payment instructions which are alleged to have been the result of &nbsphacking were not executed by it."

In the immediate wake of the heist, Bangladesh`s central bank had threatened to sue the New York Fed and SWIFT, though relations have since warmed and the pair has committed to help recover the funds. The Fed and SWIFT, which has since strengthened its security protocols, declined to comment on implications of the Banco-Wells settlement.&nbsp

Financial firms around the world have reviewed defences after a rash of cyberheists involving SWIFT, the latest targeting Malaysia`s central bank.&nbsp

Bangladesh`s minister of state for foreign affairs, Mohammed Shahriar Alam, said in a recent interview that the central bank is determined to be reimbursed and that preparations are at a "final stage" for a suit.&nbsp

"It`s obvious that we will be filing a case," likely in the United States, he told Reuters while in New York. "There are frustrations in Bangladesh about it. But together we should have done better by now."

An Ecuadorian bank and Wells Fargo have reached an out-of-court settlement over a 2015 cyber heist, providing a possible precedent for the Bangladesh central bank's planned suit to recover $66 million still lost in one of the world's biggest such cases

An Ecuadorian bank and Wells Fargo have reached an out-of-court settlement over a 2015 cyber heist, providing a possible precedent for the Bangladesh central bank's planned suit to recover $66 million still lost in one of the world's biggest such cases. A suit by Ecuador's Banco del Austro against Wells Fargo & Co was quietly settled in February, less than a month before a trial date was set, and the US&nbspdistrict court in Manhattan sealed all discussions, according to court documents. No other major media has reported the settlement. Wells Fargo did not comment on the settlement, and a representative for Banco del Austro could not be immediately reached. Banco had sought to hold Wells responsible for authorising the fraudulent transfer of $12 million from its account in 2015. Hackers breached Bangladesh Bank's systems in early 2016 and tricked the Federal Reserve Bank of New York into sending as much as $81 million to accounts at Rizal Commercial Banking Corp (RCBC) in the Philippines. The accounts were held in fake names and most of the money disappeared into casinos in Manila. Some of the funds were recovered but about $66 million remains untraced. No one has been criminally charged for the heist despite an international investigation and two years of finger-pointing among Bangladesh, Philippines, the Fed and the SWIFT communication network that was used. Bangladesh Bank has threatened to sue Manila-based RCBC, and any legal fallout could set a precedent amid a rash of electronic heists at financial institutions around the world. "This is a tricky issue. We can`t reveal our strategy. But yes we are reviewing each and every case, including the Ecuador one," Bangladesh Bank`s deputy governor Abu Hena Mohd. Razee Hassan said in a recent interview. While Bangladesh has not taken any legal action, bankers and lawyers saw the cyber-heist suit by Banco against Wells Fargo as a test for any options available to Bangladesh. They said the settlement could signal that Wells compensated Banco in some way, a possibly encouraging sign for Bangladesh Bank, But it could still struggle to get a hearing in the United States and prove that Manila-based RCBC had a contractual obligation to freeze the stolen funds. "There are an awful lot of reasons for people to settle (and) there are all sorts of laws that may or may not apply," said Peter Jaffe, a senior associate at Washington-based law firm Freshfields Bruckhaus Deringer LLP. "RCBC was not the one that was hacked. Someone may think that RCBC should have done something different when it saw money coming through its accounts, but that is not really a cybersecurity issue at that point," Jaffe said. "I don`t think you would necessarily look to cybersecurity law (or US&nbspcommercial code) to determine ... obligations and rights." Obligation unclear At issue is the New York Uniform Commercial Code, which says a bank that is tricked by thieves must reimburse the customer unless it can prove it used a mutually-agreed protocol for verifying the payment messages. The customer could counter that the security protocol was not "commercially reasonable." In 2016, the judge rejected an attempt by Wells to dismiss Banco`s allegations because the Manhattan court could not rule that use of SWIFT`s security system alone was enough. Bangladesh has a correspondent-banking contract with the New York Fed, which has repeatedly stressed that each of its foreign clients has agreed that it can rely on SWIFT protocols. The payment messages it received from the hackers in February 2016 were verified by SWIFT and directed the Fed to send much of the funds to RCBC. It is unclear what obligation RCBC has to Bangladesh Bank and whether US&nbsplaw would apply. The Philippine bank said it had received advice from lawyers in the United States that it had "strong and valid" defences against any suit by Bangladesh Bank. "There is no act attributable to RCBC which caused the loss or the theft from Bangladesh Bank," it said in a statement on Monday. "We reiterate that RCBC was merely a beneficiary bank, meaning, the payment instructions which are alleged to have been the result of &nbsphacking were not executed by it." In the immediate wake of the heist, Bangladesh`s central bank had threatened to sue the New York Fed and SWIFT, though relations have since warmed and the pair has committed to help recover the funds. The Fed and SWIFT, which has since strengthened its security protocols, declined to comment on implications of the Banco-Wells settlement. Financial firms around the world have reviewed defences after a rash of cyberheists involving SWIFT, the latest targeting Malaysia`s central bank. Bangladesh`s minister of state for foreign affairs, Mohammed Shahriar Alam, said in a recent interview that the central bank is determined to be reimbursed and that preparations are at a "final stage" for a suit. "It`s obvious that we will be filing a case," likely in the United States, he told Reuters while in New York. "There are frustrations in Bangladesh about it. But together we should have done better by now."

Bangladesh eyes settlement in US cyber heist suit ahead of its own case

Officials from the Bangladesh central bank are visiting Manila this week to pressure the authorities in the Philippines to find ways to return the $63 million that is still missing out of the funds stolen from its account at the Federal Reserve Bank of New York earlier this year, two people close to Bangladesh Bank said. 
 
Unknown cyber criminals tried to steal nearly $1 billion from the Bangladesh Bank account between Feb. 4 and Feb. 5, and succeeded in transferring $81 million to four accounts at Rizal Commercial Banking Corp (RCBC) in Manila. Only about $18 million has been recovered. 
 
The&nbsp;Bangladeshi&nbsp;officials&nbsp;are alleging that the&nbsp;money&nbsp;was allowed to disappear into the casino industry in the Philippines, where investigators say it was laundered, because of systemic failures at RCBC, the two sources said. 
 
Bangladesh Bank is relying on internal RCBC documents to buttress its assertion that the Filipino bank&rsquo;s Jupiter Street branch in Manila ignored suspicions raised by some RCBC officials when the money was first remitted to the accounts on Feb. 5, and then delayed acting on requests from RCBC&rsquo;s head office to freeze the funds on Feb. 9, said one of the sources in Dhaka. 
 
RCBC did not respond to requests for comment, but its then president Lorenzo Tan told a Senate hearing in March that the incident was &quot;some judgment error from the people on the ground&quot;. 
 
&quot;I think what happened here is we had the IT controls, the human controls. But unfortunately, it failed in the end, in the execution,&quot; said Tan, who subsequently resigned. &quot;Yes, we are sorry this happened, but you know, it is human error, human judgment or intentional.&quot; 
 
The Bangladeshi delegation consists of Debaprosad Debnath and Abdul Rab from Bangladesh Bank&#39;s financial intelligence unit, Bangladesh Bank lawyer Ajmalul Hossain, and Bangladesh&#39;s ambassador to the Philippines, John Gomes. 
 
They plan to meet with officials from the anti-money-laundering council in Manila, the Philippines&#39; department of justice, the central bank of the Philippines and from RCBC over the next four days, said the sources. 
 
Bangladesh Bank spokesman Subhankar Saha declined to say if the bank had plans to sue RCBC, but added it was trying to recover the money with the help of the Philippines&#39; central bank. 
 
RCBS blamed its own employees 
 
RCBC has previously blamed its own employees for the ease with which the money left the bank, including the manager of the branch in question. But the Dhaka source said the Bangladesh Bank believes the failures extend beyond individual officers and that RCBC allowed itself to be used as a conduit for the illegal transfer of stolen money. 
 
Bangladesh Bank claims the documents show that RCBC should be accountable for the losses. The documents, which have been reviewed by Reuters, include emails between RCBC managers at the time of the heist in February as well as memos and emails to various RCBC officials during a subsequent internal investigation. 
 
They show that RCBC had frozen the accounts concerned at its Jupiter Street branch in Manila for about an hour on Friday Feb. 5 because of questions from some bank officials about where the money had come from, where it was going, and whether the transfers were legitimate. 
 
At 6.27 pm on that day, a temporary hold was placed on the accounts at the branch, pending further investigation into the &quot;validity of the remittances and nature of the funds&quot;, according to one memo that was sent on March 21 by the head of RCBC&rsquo;s human resources group, Rowena F. Subido, to Ismael S. Reyes, its national sales director for retail banking. 
 
Some officials at RCBC&#39;s headquarters, also in Manila, had questioned the transfers after about $22.7 million of the money was withdrawn from one of the accounts in cash at 3.16 pm that day only to be then deposited to another account that was opened at around 3 pm that day at the same branch, according to the notice sent to Reyes. 
 
However, the hold on the accounts was shortlived. By around 7.30 pm it was lifted after then Jupiter Branch Business Manager Maia Deguito&#39;s &quot;representation to her superiors&quot; that the transactions were legitimate, according to another memo sent to Reyes. Deguito was fired by the bank earlier this year and is under investigation by the Philippines&#39; anti-money laundering council. 
 
Ferdinand Topacio, lawyer for Deguito, said that RCBC could not escape blame by singling out employees for mistakes. &quot;If she had any fault, she was negligent and she was naive,&quot; Topacio said. He said RCBC did not act urgently on the stop payment requests from the Bangladesh central bank. 
 
The documents show that when the bank reopened on Tuesday, Feb. 9 after the Chinese New Year holiday, RCBC&#39;s settlements department received messages as early as 9.15 am from Bangladesh Bank, alerting it about the fraud. It sent four emails, between 10.59 am and 11.30 am, to its Jupiter Street branch, asking it to recall or freeze the remaining funds, the documents show. The reasons for the delay in sending those emails could not be ascertained. 
 
The branch processed withdrawals, totalling $58.15 million, between 10.24 am and 11.35 am, the documents show. According to former Senator Sergio Osmena, who led a Philippines&#39; Senate probe into the events, only $15.2 million of this was withdrawn before 11.19 a.m. 
 
&quot;RCBC did not perform its role properly,&quot; Bangladesh Bank&rsquo;s Saha said. &quot;RCBC is similarly liable as those parties who took money in their accounts.&quot; 
 
(Reuters) 
 
 
 
 
 
 
 
 
&nbsp;

Unknown cyber criminals transferred $81 million from Bangladesh Bank to RSBC in Manila in February. Only $18 million has been recovered

Officials from the Bangladesh central bank are visiting Manila this week to pressure the authorities in the Philippines to find ways to return the $63 million that is still missing out of the funds stolen from its account at the Federal Reserve Bank of New York earlier this year, two people close to Bangladesh Bank said. Unknown cyber criminals tried to steal nearly $1 billion from the Bangladesh Bank account between Feb. 4 and Feb. 5, and succeeded in transferring $81 million to four accounts at Rizal Commercial Banking Corp (RCBC) in Manila. Only about $18 million has been recovered. The Bangladeshi officials are alleging that the money was allowed to disappear into the casino industry in the Philippines, where investigators say it was laundered, because of systemic failures at RCBC, the two sources said. Bangladesh Bank is relying on internal RCBC documents to buttress its assertion that the Filipino bank’s Jupiter Street branch in Manila ignored suspicions raised by some RCBC officials when the money was first remitted to the accounts on Feb. 5, and then delayed acting on requests from RCBC’s head office to freeze the funds on Feb. 9, said one of the sources in Dhaka. RCBC did not respond to requests for comment, but its then president Lorenzo Tan told a Senate hearing in March that the incident was "some judgment error from the people on the ground". "I think what happened here is we had the IT controls, the human controls. But unfortunately, it failed in the end, in the execution," said Tan, who subsequently resigned. "Yes, we are sorry this happened, but you know, it is human error, human judgment or intentional." The Bangladeshi delegation consists of Debaprosad Debnath and Abdul Rab from Bangladesh Bank's financial intelligence unit, Bangladesh Bank lawyer Ajmalul Hossain, and Bangladesh's ambassador to the Philippines, John Gomes. They plan to meet with officials from the anti-money-laundering council in Manila, the Philippines' department of justice, the central bank of the Philippines and from RCBC over the next four days, said the sources. Bangladesh Bank spokesman Subhankar Saha declined to say if the bank had plans to sue RCBC, but added it was trying to recover the money with the help of the Philippines' central bank. RCBS blamed its own employees RCBC has previously blamed its own employees for the ease with which the money left the bank, including the manager of the branch in question. But the Dhaka source said the Bangladesh Bank believes the failures extend beyond individual officers and that RCBC allowed itself to be used as a conduit for the illegal transfer of stolen money. Bangladesh Bank claims the documents show that RCBC should be accountable for the losses. The documents, which have been reviewed by Reuters, include emails between RCBC managers at the time of the heist in February as well as memos and emails to various RCBC officials during a subsequent internal investigation. They show that RCBC had frozen the accounts concerned at its Jupiter Street branch in Manila for about an hour on Friday Feb. 5 because of questions from some bank officials about where the money had come from, where it was going, and whether the transfers were legitimate. At 6.27 pm on that day, a temporary hold was placed on the accounts at the branch, pending further investigation into the "validity of the remittances and nature of the funds", according to one memo that was sent on March 21 by the head of RCBC’s human resources group, Rowena F. Subido, to Ismael S. Reyes, its national sales director for retail banking. Some officials at RCBC's headquarters, also in Manila, had questioned the transfers after about $22.7 million of the money was withdrawn from one of the accounts in cash at 3.16 pm that day only to be then deposited to another account that was opened at around 3 pm that day at the same branch, according to the notice sent to Reyes. However, the hold on the accounts was shortlived. By around 7.30 pm it was lifted after then Jupiter Branch Business Manager Maia Deguito's "representation to her superiors" that the transactions were legitimate, according to another memo sent to Reyes. Deguito was fired by the bank earlier this year and is under investigation by the Philippines' anti-money laundering council. Ferdinand Topacio, lawyer for Deguito, said that RCBC could not escape blame by singling out employees for mistakes. "If she had any fault, she was negligent and she was naive," Topacio said. He said RCBC did not act urgently on the stop payment requests from the Bangladesh central bank. The documents show that when the bank reopened on Tuesday, Feb. 9 after the Chinese New Year holiday, RCBC's settlements department received messages as early as 9.15 am from Bangladesh Bank, alerting it about the fraud. It sent four emails, between 10.59 am and 11.30 am, to its Jupiter Street branch, asking it to recall or freeze the remaining funds, the documents show. The reasons for the delay in sending those emails could not be ascertained. The branch processed withdrawals, totalling $58.15 million, between 10.24 am and 11.35 am, the documents show. According to former Senator Sergio Osmena, who led a Philippines' Senate probe into the events, only $15.2 million of this was withdrawn before 11.19 a.m. "RCBC did not perform its role properly," Bangladesh Bank’s Saha said. "RCBC is similarly liable as those parties who took money in their accounts." (Reuters)

Bangladesh officials visit Manila to seek recovery of bank heist money