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Now the market thinks the Fed could make an even deeper cut to rates later this month

Like Ben Bernanke and Janet Yellen before him, Federal Reserve Chairman Jerome Powell may be worried that the central bank’s use of extreme policy during the financial crisis left him with a relatively small amount of fire power to head off the next economic decline.

That may make the idea of a so-called insurance rate cut later this month, an attractive option for the Fed chair, who looks determined to cut interest rates even as the domestic economy appears to be showing some signs of strength.

“It’s pretty incredible how strong the data has been. We added 224,000 jobs. We had an extraordinarily strong retail sales report; a 0.3% gain in core CPI month over month. Manufacturing surveys are rebounding. Jobless claims are hovering at cycle lows,” said Michelle Meyer, Bank of America chief U.S. economist. “The set of data heading into the next FOMC meeting is really quite robust.”

Yet, Meyer, like many Wall Street economists, expects Powell’s Fed on July 31 to pull the trigger on a rate cut, the first since 2008, and possibly the first of several. Traders increased their bets on Thursday that the Fed could cut even deeper later this month.

“This is a Fed that is data independent.They are not cutting interest rates because of incoming data. They are cutting interest rates because they worry about the future data and they are being pre-emptive,” she said. She said the strategy of using some of the few rate hikes the Fed has available to boost the economy, and keep it from rolling over is a gamble.

The Federal Reserve has increased interest rates nine times since it took the fed funds rate range to zero in the face of a looming depression in 2008. The Fed started raising interest rates again in December, 2015 and with quarter point increments, it had taken the fed funds rate range up to 2.25 to 2.50% by December, 2018.

New York Fed President John Williams Thursday added credence to market expectations the Fed will cut rates this month when he said he sees a need for the Fed to vaccinate the economy against risk when rates are low, and that the close proximity of zero rates has changed the way central banks react. His comment sent interest rates lower, the dollar lower and stocks higher.

“All the incremental data has been positive…what’s interesting is Williams is saying because of the proximity to the zero lower bound and the chance that monetary policy is constrained, they have to be more aggressive. If you only have so much space they have to really take advantage of that opportunity,” said BMO rate strategist Jon Hill.

The futures market is pricing in 100% odds of a quarter-point cut at the Fed’s next meeting and two more this year. Hill said the market priced in higher odds of more than 50% that the Fed would make a 50 basis point cut in July, following Williams’ comment.

Specifically, the odds of a half-percentage-point cut by the Fed increased to 59% on Thursday following the Williams talk, up from 35% earlier in the day, according to the CME’s Fedwatch tool.

Joseph LaVorgna, Natixis chief economist Americas, said Williams comments make it seem as though the Fed would be willing to cut by a half percentage point at its July meeting.

“In a weird way the strong data is going to make them go more. The strong data gives them an out. They can cut 50 [basis points] in July. At that point, they can go back to being data dependent. By going back to being data dependent, they actually buy themselves more optionality. They can go back to watching data and they can get more easing into the system,” said LaVorgna. “It’s a way to get future easing out into the market and to do it in a way that’s not destabilizing.”

All over the globe, central bankers are flexing policy, cutting rates and promising more easing as the Fed prepares to move. Indonesia and Korea bankers made surprise rate cuts Thursday morning, the latest in a series of central bank moves, and both the Bank of Japan and European Central Bank have been holding out the possibility of more easy policy.

“The reason they’re not willing to let the economy flirt with recession is because they feel they have limited policy space right now,” said Meyer.

Powell has laid out his reasons for a possible cut, and they did not so much include U.S. economic weakness, as much as he pointed to low inflation, a weak global economy and the unknown impact of trade wars.

“I think the reason the [U.S.] data looks so decent is because the Fed is going to cut. If the Fed had not pirouetted and pivoted, we would not have seen the improvement,” said Diane Swonk, chief economist at Grant Thornton. Now, the Fed has to follow through with a rate cut after its strong signals in order to maintain its credibility.

Powell’s Fed is pivoting, and this time pivoting away from a stricter interpretation of the central bank’s mandate than some of his predecessors. He has assigned the Fed the task of prolonging the economic recovery, commenting a number of times that the Fed “will act as appropriate to sustain the expansion.”

“To put that explicitly in the statement, it’s the Fed’s goal to sustain the expansion. I think they came to the realization that they have more slack in the economy than they realized and they’re pulling people in from the sidelines…It means a 3.7% unemployment rate today doesn’t mean what it meant in the past, ” she said.

Meyer expects the Fed to follow through with multiple cuts, but she said if the data holds up, the Fed may find a way to end the rate cutting cycle. But economists say the trade issues are perhaps the thorniest and one the Fed can’t easily combat.

“You’ve got decelerating growth. You’ve got warnings from abroad, and in both September of 1998 and September of 2007, the Fed said let’s cut rates a little bit and we’ll think of them as insurance cuts,” said Luke Tilley, chief economist at Wilmington Trust. In 2007, the economy was heading into the Great Recession and that plan did not work, but it did in 1998.

While the consumer-related data has been showing improvement, U.S. manufacturing data has been weak, along with the rest of the world.

“If the problem with the economy is tariffs, and they keep going up, the Fed does not have the right medicine at their disposal,” said Tilley.

“What we really need to see is an improvement in the U.S. and Chinese trade relationship. If we really went to a bad place, I don’t think there’s much the Fed could do to fix the economy if we get more tariffs on more Chinese goods,” said Tilley..
Swonk said the downside of cutting interest rates for the Fed now is that it could be fueling a bubble in financial markets.

“The other danger of cutting is it looking like they’re being bullied by the White House. That is something they take seriously. It’s why a minority of presidents would rather skip this meeting and make a stand to show they would not capitulate to the president,” said Swonk. Swonk said some investors believe Powell is responding to Trump by getting set to cut interest rates in a good economy, but she does not believe that.


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‘Terminator: Dark Fate’ to be rated R, bring back Eddie Furlong as John Connor

Linda Hamilton reprises her role as Sarah Connor in “Terminator: Dark Fate.”

Paramount / 20th Century Fox

Linda Hamilton and Arnold Schwarzenegger will be joined by another familiar face in the upcoming film “Terminator: Dark Fate” — Eddie Furlong, who played John Connor in “Terminator 2: Judgment Day.”

The film, which director Tim Miller said would be rated R during a San Diego Comic-Con panel Thursday, deals with the consequences of destroying Cyberdyne at the end of “Terminator 2.”

“My one caveat: If I was gonna do it, I wanted Arnold involved,” writer and director James Cameron said while streaming live from the set of his upcoming “Avatar” sequels. “We came up with all kinds of crazy stuff you’ve never seen before.”

This is breaking news. Please check back for updates.


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To tilt your odds of success at work, get more sleep

Isaiah Kacyvenski, former Seattle Seahawks linebacker, believes worker productivity is directly related to how much sleep employees get each night.

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Pro athletes buy into it as a way to win. Houston Astros ace Justin Verlander attributes the practice as the main reason he is able to stay on top of his game. Business titans like Jeff Bezos and Arianna Huffington are big backers as well. So why do the rest of us think that the way to succeed is by working more and sleeping less?

Good sleep should not be a benefit for the elite.

According to Isaiah Kacyvenski, founder of venture capital firm Will Ventures and a former NFL player, the old idea that has fueled go-go America — “I’ll sleep when I die” — is directly contradicted by an overwhelming amount of medical research showing the cost to worker productivity caused by lack of sleep.

“The research tells us sleep deprivation affects productivity,” Kacyvenski said at CNBC’s recent @Work Human Capital + Finance conference in Chicago. “The sleep data is ridiculous; the ability to improve performance across the board is mind-blowing.”

A now-classic study conducted in 2010 analyzed the cost to organizations of lack of sleep, and sleep disorders in particular. A study of Kansas state employees led by sleep and health researcher Michael Grandner, assistant professor of psychiatry at the University of Arizona College of Medicine — Tucson, found that 56% of Kansas state employees reported some sleep problems, and nearly 12% said they often or always had trouble sleeping. Those 12% missed the most work, had the lowest levels of performance and were responsible for the highest health-care costs.

“We live in a society that incentivizes sleeping as little as possible. Getting too much sleep is seen as a problem, and too little sleep is more common,” Grandner said.

Work and sleep

Kacyvenski knows about tilting the odds in his favor — people who had his start in life and succeed don’t leave the big things to chance if they can avoid it. He rose from childhood poverty and homelessness with an alcoholic parent to a bachelor’s degree from Harvard University, Harvard Business School MBA and Super Bowl, not to mention an endorsement from Oprah Winfrey.

“In the end, as an organization you want this, getting people to feel as good as they can every day at work, and productivity will shoot up,” Kacyvenski said. “Big organizations with massive food budgets and an amazing spread are still unable to quantify the difference that makes. This has deep applications around the worker in every way.”

For more on tech, transformation and the future of work, join CNBC at the @ Work: People + Machines Summit in San Francisco on Nov. 4. Leaders from Dropbox, Sas, McKinsey and more will teach us how to balance the needs of today with the possibilities of tomorrow, and the winning strategies to compete.

Grandner said workplace culture has always made a stigma of work, whereas the professional athletes he works with will do whatever it takes to win — meaning a focus on good sleep. “Banking, for example, emphasizes decreased sleep. There are many clear, direct and indirect incentives for sleeping as little as possible — from an earlier start working, to a later stop, seen as a better worker. Things like prioritizing work around the clock or putting in 100 hours.”

He said the data clearly shows how lack of sleep leads to performance degrading over time and that degradation compounds rather than leveling off. “The only way to recover from lack of sleep is sleep,” he said.

We are the only animal that sleep-deprives itself on purpose. We were not built for that.

Michael Grandner

sleep and health researcher, University of Arizona College of Medicine

To make his point as clear as possible, Grandner says that people need to realize sleep is as fundamental a part of biology as food — you can only go without it for so long, until it kills you. “The longer you go without sleep, your body will take it, but you can get to the point where the body takes sleep even if it knows that falling asleep right now will cause your death.”

And that happens at work, through machine errors, mistakes behind the wheel, “when fighting fires for 30 hours; surgeon on call for 36 hours, installing solar panels 10 hours a day on roofs with no break,” Grandner said. “We are the only animal that sleep-deprives itself on purpose. We were not built for that.”

The sleep researcher says organizations need to shift the way they think about sleep from a cost to an investment. Grandner says short-term metrics may show that professionals can get ahead burning the midnight oil, but longer-term outcomes are negatively affected. His data on productivity loss shows that the less you sleep, the more productivity you lose.

“I like to say, ‘Don’t see sleep as an expense; see it as an investment, especially for people in the business world.’ You need to spend money to make money, and this is a case of that. It is not what you have left at the end of the day or what you can afford. That’s living paycheck to paycheck with your sleep.”

The quantified employee

Kacyvenski believes part of the solution will be the rise of the quantified self and quantified employee, an era in which the proliferation of data allows organizations to achieve the same peak performance as athletes at the level of each worker.

“Everyone wants to tilt the odds, chance of success. Automate every aspect of life, from sleep to hydration to energy expenditure,” he said at the CNBC conference. “It is not just elite athletes. Everyone wants to take the guesswork out of their world every day. Sports is a test bed, but data will tell a story on each of us in an amazing way. The quantified athlete is an extension of the quantified self, and you can scale it. We are in the early stages as an investor in the quantifiable employee.”

He said giving people the tools to manage this seamlessly is one of the biggest solutions that will evolve over the next five years, allowing individuals to take a proactive approach to how they feel.

But it is still the early days in this data age. A 2017 study from researchers at the Rush University Medical School and Northwestern University’s Feinberg School of Medicine found that sleep devices and apps from companies, including Apple and Fitbit, did not achieve better health outcomes. A recent New York Times tech review of sleep aids argues that these apps and an intense focus on sleep data may make sleep worse as people obsess over data they can’t properly interpret.

‘Wild West’ of interpreting sleep data

Researchers say it is simply too early to tell.

Chris Barnes, who studies work and sleep as a professor at the University of Washington’s Foster School of Business and has a TedX Talk on the topic, said via email that ruminating about how little you sleep can lead you to stress about it, which could make it harder to sleep.

“We are in the Wild West era of sleep measurement devices and apps. A very few have been empirically validated. The vast majority have not been, at least not to a standard that I would find compelling.” But he added, “My general perspective is that most people will probably benefit from getting at least some feedback on how much and how well they are sleeping. Sleep apps can be one tool for doing that. But it’s pretty easy to go overboard and use the wrong device, the wrong app, for the wrong reasons, in an obsessive manner and maybe even get harmful outcomes as a result.”

Grandner said the science of sleep measurement is imperfect and needs to get better at knowing what to do with the information and making recommendations to individuals. But the fact that it has flaws does not mean we should do nothing — or overinterpret the information.

He is optimistic that in small ways the conversation about sleep as a cost is losing favor. “We’re no longer at the point where people are bragging about how little sleep they need. Now they are bragging about how little sleep we get, even though we know we need more … There’s a little guilt in there, like with food and exercise. That’s an important change in conversation, recognizing it as important.”

He added, “I tell sports teams and companies that if you have a nutrition program and an exercise program and don’t have a sleep program, you are balancing on a two-legged stool.”

If a company won’t invest in sleep, workers should keep in mind that the cost in lost productivity is never going to be as critical as the cost to the worker over time: Lack of sleep leads to increased risk of disease and death. And no worker should think they are an outlier to the average person.

“Most people are not the exceptions. On average, we need more rather than less sleep,” Grandner said. “People who say they get seven to eight hours live longer, get less sick, less injured, do better mentally, and physically perform better too. It is a good rule of thumb, a reasonable rule of thumb.”


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7 Steps to Living Your Life With Purpose

How to follow your passion and live in flow.

7 min read

Opinions expressed by Entrepreneur contributors are their own.

This article is written by Katrina Ruth, founder and CEO of “The Katrina Ruth Show,” a multimillion-dollar online coaching business for entrepreneurs, and an Advisor in the The Oracles.

Are you struggling to create your dream life or business? If so, you are probably distracted by the “how.” What you should be focused on instead is identifying your calling.

I know firsthand that nothing else matters if you aren’t following your soul’s purpose. Once you’ve found it, you can align all areas of your life to point in that direction. It is possible to do what you love and live in flow — you just need the right motivation and mindset, and to take the right action.

1. Understand what life should feel like.

“Living on purpose” means doing what truly matters to you in alignment with your values and beliefs. I can’t tell you what that means for you, but you know it when you feel it — and when you don’t. 

When you aren’t being you, everything is foggy and colorless. You’re bored and busy at the same time, always tired. Even small things feel like work. You take tests to understand why you feel down and pills to fix it. The list can go on. If you continuously ignore your higher self, it will send you nudges — even a slap in the face — to get your attention.

When you’re in alignment, life is right. Things are easy, and everything just works. You feel alive, passionate, and lit up from within. You aren’t concerned with how to get where you’re going; you’re sure of yourself, even if you’re scared at the same time.

2. Tap into your calling within.

Stop searching outside yourself for answers. There’s only one: be who you were born to be. You can find plenty of exercises online to identify your calling, but you don’t need them. Deep within, you already know what makes you feel alive. You just have to pay attention.

Not sure what your mission is? You’ll be able to put it into words when you stop worrying whether you’re saying it right or others will “get it.” However, sometimes access to your soul is blocked by confusion, especially if you’ve ignored it for a long time. In that case, practice connecting with yourself and tuning in to what’s buried there by asking, “What do I need to know or listen to here?” Then trust the answer. I find journaling to be the most powerful way to do this, but you can also do this as part of a meditation or while walking or driving. 

3. Trust yourself and forget what others think.

We’re naturally intuitive before we learn “the rules.” But there’s no right or wrong way to live. If you aren’t following your intuition, you’re operating on others’ terms — and no one can tell you how to be you.

There’s always another approach to everything. I hated building marketing funnels until I started doing them my way. Visionary leaders do things differently; that’s why they stand out. They question the norm to find what’s right for them.

Imagine that you’re successful. No one would question you because you’re on top of the world. Who would you be? How would you act? Confidence and self-belief are key. Consciously decide that you know what’s best for you. Put your hand on your heart and tell yourself, “I trust my ability to make the best decisions for me.” Do this for every area of life that’s important to you. 

4. Feel the fear and take the first step anyway.

If you don’t wake up excited to start your day, rip off the bandaid. Make a change or start taking action. While maintaining alignment will take practice, you don’t have to work forever to get there.

The unknown is scary. We feel safe and comfortable with how things have always been. Fear is part of us and will always be there, but it can’t rule you unless you let it; so take action toward your goals anyway. You don’t have to know how or feel ready or worthy. 

When I finally realized I wasn’t doing my soul work after struggling for years, I moved across the world to start over with my family. With almost no money, I gave myself no choice but to succeed by following my passion for helping others. It paid off, and I never looked back. While your path might not be as extreme, you do have to take the first step.

5. Rethink your to-do list.

Time is precious and you should value how you spend it. If you don’t decide what matters in advance, you’ll spend it all doing things that aren’t moving you forward. I constantly outline my goals and dreams in a document called “Creating the life I want.” I make sure I set those goals for myself (not others), identify the actions that will get me there, and schedule them each week.

Fast forward to a year from now when you’re living on purpose. Does the stuff on your to-do list today matter? Is that how you got there? Review the items on your list and either delete them, do them, or delegate them. Sometimes it’s worth paying someone else to do things so that you can focus on what really matters: the tasks that will get you where you want to go if you do them every day.

If you don’t care enough about a goal to take regular action toward it, it might not matter as much as you think it does. But if you want it badly enough, you’ll suck it up and do the work.

6. Check in with yourself daily.

Before you get out of bed in the morning, ask yourself what is important today. What would make you sleep well tonight? Most of the things we do all day disconnect us from ourselves, so practice tuning in. Just sit or journal whatever needs to come out for 15 minutes. Let go and ignore the outside world — even if you have to start by just noticing the world you created for yourself.

Before you make decisions or take action, ask yourself: Do I want to do this? Does this feel right? Am I excited about this? Make this a daily practice by setting reminders to check in; otherwise you’ll slip into old patterns.

7. Recognize that you have everything you need.

This may be uncomfortable at first, and it will still feel like work sometimes. But when you’re working toward the right thing, it’s worth it. You can either choose to deny yourself or say yes to your heart and soul, but you choose what you get in life. Do the work today to create the tomorrow of your dreams.

If you trust that it will work out, it will. Don’t worry if you don’t get the outcome you want today. Success takes time, which is why most people give up. You’ll never look back and think “I spent too much time being me”; so keep going. It’s impossible to fail at being you.

You have everything you need. You will become who you are meant to be when you realize who you already are.

Connect with Katrina on Facebook, Instagram, and YouTube or visit her website.

Source: Entrepreneur
Author: The Oracles

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The House voted to give 33 million workers a raise—here’s what happens next

On Thursday, the U.S. House of Representatives voted to pass legislation that would raise the federal minimum wage from $7.25 to $15 over the next six years. Yet the new standard has a long way to go before it could affect your wallet.

The Raise the Wage Act, introduced Rep. Bobby Scott (D-Va.) in January, would effectively raise wages for 33 million workers, according to an analysis by the Economic Policy Institute. Nine in 10 of those workers potentially affected by the wage hike are over the age of 20 and 58% of them are women.

A report from the Congressional Budget Office released last week predicted a slightly smaller impact, reporting the bill could increase wages for as many as 27 million Americans and potentially lift 1.3 million families out of poverty.

Under the Raise the Wage Act, the federal minimum wage increases would roll out on a gradual schedule:

  • $8.40 in 2019
  • $9.50 in 2020
  • $10.60 in 2021
  • $11.70 in 2022
  • $12.80 in 2023
  • $13.90 in 2024
  • $15.00 in 2025

In addition to raising the minimum wage, the legislation would also eliminate the separate minimum wage standard for tipped employees. Currently, employers can pay tipped employees a minimum of $2.13 an hour, as long as their tips push them beyond the $7.25 hourly federal minimum. The Raise the Wage Act would also create an equal minimum wage for Americans with disabilities.

What needs to happen to make $15 minimum a reality

While the House passed the legislation, its implementation is far from a sure thing. Predictive intelligence firm Skopos Labs estimates the Raise the Wage Act has a 24% chance of being enacted. That’s because identical legislation would have to pass the Senate and then be signed into law by President Trump.

Mitch McConnell (R-Ky.), the majority leader, said Thursday he will not be taking up the legislation in the Senate.

And Thursday’s House vote was far from bipartisan, with only three Republicans voting to pass it. Many Republicans cited concerns that a $15 federal minimum wage may cause significant job loss. A report from the Congressional Budget Office released last week found that a mandatory $15 minimum wage may eliminate as many as 3.7 million jobs across the U.S. because companies will look to cut costs.

Why advocates say minimum wage needs to increase

It’s been 10 years since Congress set the current federal minimum wage at $7.25. In recent years, some cities and states have taken steps to increase local minimum wage statutes, but there are still 21 states where the minimum wage remains frozen at $7.25.

Yet wages simply are not keeping up as day-to-day costs continue to soar. Pew Research found that the average paycheck has the same purchasing power it did 40 years ago. A worker making the federal minimum wage cannot afford to rent an affordable two-bedroom apartment anywhere in the U.S., according to research from the National Low Income Housing Coalition.

Dougleshia Nicholson, a single mother of six, tells CNBC Make It that trying to survive on minimum wage in Kansas City, Missouri is a “constant struggle.” Nicholson, 28, makes $8.60 an hour, $1.35 more than the federal minimum wage, thanks to a recent state increase. She says it’s still not enough money to get by, especially since her hours (and paycheck) can vary significantly week to week.

When it was signed into law in 1938 by Franklin D. Roosevelt, minimum wage was designed to provide workers a livable salary. Yet Nicholson’s typical 20 hours a week at Church’s Chicken adds up to about $8,300 annual pay, far below the $78,407 the Economic Policy Institute estimates a family of four needs to live modestly in Kansas City.

Roughly 36% of U.S. workers earn less than $15 an hour, according to estimates from the EPI. Research shows women and minorities are disproportionately affected by the minimum wage issue.

Although the path to a $15 national minimum wage is far from over, proponents vowed to keep fighting on Thursday.

“We’re celebrating the House vote today, but tomorrow, we’ll turn right back to the fight. Our eyes will be on the Senate and on President Trump,” says Fran Marion, a McDonald’s worker in Kansas City and a member of the “Fight for $15 and a Union” campaign.

The coalition plans to hold rallies in 10 cities on Friday, including Chicago, Los Angeles and Miami, to raise awareness and demanding McDonald’s raise its wages to $15 an hour.

Check out: What it’s like trying to live on minimum wage—it’s a ‘constant struggle’

Like this story? Subscribe to CNBC Make It on YouTube!

U.S. Speaker of the House Rep. Nancy Pelosi (D-CA) holds up seven-year-old Kassidy Durham of Durham, North Carolina, during a news conference prior to a vote on the Raise the Wage Act July 18, 2019 at the U.S. Capitol in Washington, DC.

Alex Wong | Getty Images News | Getty Images


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Fed’s Williams says to ‘act quickly’ to lower rates rates during ‘economic distress’

Central bankers need to act quickly and forcefully when rates are low and economic growth is slowing, New York Federal Reserve President John Williams said Thursday.

The influential policymaker delivered a speech discussing what should be done when central banks are near the “zero lower bound,” or close to as low as rates can go.

“It’s better to take preventative measures than to wait for disaster to unfold,” he told the annual meeting of the Central Bank Research Association.

Rather than keep rates elevated to give central banks room to cut in the face of a crisis, Williams said the proper move is not to “keep your powder dry.”

“When the ZLB is nowhere in view, one can afford to move slowly and take a ‘wait and see’ approach to gain additional clarity about potentially adverse economic developments. But not when interest rates are in the vicinity of the ZLB,” he said in prepared remarks. “In that case, you want to do the opposite, and vaccinate against further ills. When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress.”

Williams spoke as the policymaking Federal Open Market Committee is expected to cut its benchmark interest rate during the July 30-31 meeting. Officials are worried about persistently low inflation, spillover from a global slowdown and the fallout from back-and-forth tariffs between the U.S. and China.

The Fed currently pegs the overnight funds rate in a range between 2.25% and 2.5% — above zero, but still well below normal levels that have prevailed during past economic expansions.

Williams did not directly address whether he favors a cut, though markets are pricing in a 100% chance of a quarter-point reduction and a 38% probability that the Fed might cut by half a point, according to the CME.

However, he said that when faced with low rates and slowing growth, the best strategy is to “take swift action” and “keep interest rates lower for longer.”

“The expectation of lower interest rates in the future lowers yields on bonds and thereby fosters more favorable financial conditions overall. This will allow the stimulus to pick up steam, support economic growth over the medium term, and allow inflation to rise,” he said.


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Trump looking into a Pentagon cloud contract for Amazon or Microsoft after ‘tremendous complaints’

President Donald Trump speaks to reporters after arriving at Pitt-Greenville Airport before heading to a campaign rally at Williams Arena in Greenville, North Carolina, July 17, 2019.

Kevin Lamarque | Reuters

President Donald Trump said on Thursday that he’s seriously considering looking at a Pentagon contract that’s said to be worth up to $10 billion for Microsoft or Amazon

“I never had something where more people are complaining,” Trump said, adding that he’s going to take a close look at it. 

“We’re getting tremendous complaints from other companies,” Trump said in a press pool at the White House during a meeting with the prime minister of The Netherlands. “Some of the greatest companies in the world are complaining about it.” He named Microsoft, Oracle and IBM. 

The Pentagon did not immediately respond to CNBC’s request for comment.

The Joint Enterprise Defense Infrastructure, or JEDI, contract was originally supposed to be awarded in September 2018. The cloud-computing deal could be announced as early as next month, the Pentagon told CNBC.

Since April, Microsoft and Amazon have been the only remaining competitors for the contract after IBM and Oracle were ruled out by the Defense Department. The contract, known as JEDI, is viewed as a marquee deal for the company that ultimately wins it, particularly as Microsoft and Amazon are aggressively pursuing government work for their expanding cloud units.

Business from the CIA in the U.S. has been a big boon for Amazon Web Services. 

AWS and Microsoft are the only companies that meet the minimum requirements for the contract, Defense Department spokesperson Elissa Smith told CNBC in April.

Last week, Oracle lost a court challenge in which it argued that the contract was tainted by conflicts of interest. 

This is breaking news. Please check back for updates.


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Amazon would be a better choice than Facebook to develop Libra, author Ben Mezrich says

The author of books about the early days of Facebook and Bitcoin said Thursday that the wrong tech giant is leading the charge to create Libra, a new cryptocurrency.

“This is all about trust. You can’t have a bank, you can’t be a new currency without people trusting it if you’re going to sit in the middle of it, and people don’t trust Facebook,” Ben Mezrich said on CNBC’s “Squawk Box. “

Mezrich, whose book “Accidental Billionaires” was the basis for the movie “The Social Network,” said it would make more sense for Amazon to lead the project instead.

“I think that Amazon could pull this off because for whatever reason we all trust Amazon, ” Ben Mezrich said. “We put our credit cards in there everyday.”

Facebook announced last month that it was developing Libra, with dozens of other companies signing on to the project. The social media giant has said it will not run the currency once it is launched, with Libra instead being managed by a nonprofit based in Switzerland.

Both Democratic and Republican lawmakers have been critical of the project, with many mentioning Facebook’s past scandals involving user data.

David Marcus, the head of the Facebook team developing Libra, testified before Congress for two days this week. Some members of Congress asked Marcus if he would pause or scale down the project while the federal government figured out how to regulate it.

“I don’t think you should launch Libra at all, because the creation of a new currency is a core government function,” Rep. Carolyn Maloney, D-N.Y., said to Marcus. “But at the very least you should agree to do this small pilot program first.”

Mezrich said he thinks Amazon would be subject to less scrutiny than Facebook. “Regulators would be on them, but it wouldn’t be like this.”

Mezrich, whose book “Bitcoin Billionaires” came out in May, said Libra would not be a true cryptocurrency because it would involve financial mediators. He said it could, however, serve as an “on ramp” to bitcoin for people unfamiliar with cryptocurrencies.


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Trump says he wasn’t happy with ‘send her back’ rally chant targeting Ilhan Omar

President Donald Trump speaks to reporters after arriving at Pitt-Greenville Airport before heading to a campaign rally at Williams Arena in Greenville, North Carolina, July 17, 2019.

Kevin Lamarque | Reuters

President Donald Trump said Thursday that he isn’t happy with his supporters’ “send her back” chant directed at progressive Rep. Ilhan Omar, D-Minn., that erupted at his North Carolina rally on Wednesday.

“I was not happy with it — I disagree with it,” Trump told reporters at the White House. Asked why he did not stop it, Trump said he thought he did.

“I started speaking very quickly,” Trump said.

Video of the event does not show the president disagreeing with his supporters. Instead, it shows that Trump paused as the chant began, allowing his supporters to continue before he launched into further criticism of the Minnesota Democrat.

“She talked about the evil Israel and ‘It’s all about the Benjamins.’ Not a good thing to say. So, that’s Omar. That’s Omar,” Trump said after a pause. Omar apologized in February after she was accused of employing anti-Semitic tropes in tweets about Israel.

Omar was born in Somalia and became a U.S. citizen as a teenager. She was elected to Congress last year. She is one of four progressive Democrats that Trump told to “go back” to the “places from which they came” over the weekend. On Monday, Trump said Omar “hates Jews” and accused her of praising al-Qaida.

In response to the president’s rally, Omar said Thursday that Trump was “spewing his fascist ideology on stage.”

“We are Americans as much as everyone else. This is our country. And we are where we belong,” Omar said.

In a post on Twitter, Omar quoted the poet Maya Angelou, writing: “You may shoot me with your words,/ You may cut me with your eyes,/ You may kill me with your hatefulness,/But still, like air, I’ll rise.”

Republicans have been mostly silent on the chant, though some have sought to distance the president from the actions of his supporters.

House Minority Leader Kevin McCarthy, R-Calif., said the chants have “no place in our party and no place in this country.”

But McCarthy, speaking at a news conference, said the president “never joined in it. And you want to try to hold him accountable for something in what a big audience did?”

Rep. Mark Walker, R-N.C., who was at the rally, wrote in a post on Twitter: “Though it was brief, I struggled with the ‘send her back’ chant tonight referencing Rep Omar. Her history, words & actions reveal her great disdain for both America & Israel. That should be our focus and not phrasing that’s painful to our friends in the minority communities.”

During the 2016 campaign, “lock her up” was a signature Trump rally chant, referring to rival Hillary Clinton.


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Why Facebook immortalized an illegal crosswalk with nine gray stripes at its headquarters

In the middle of Facebook’s Menlo Park campus there’s an open courtyard with the word “Hack” written in enormous letters. This area is known as Hacker Square.

Above “Hack,” there are nine large, thick, gray stripes.

To the naked eye, the stripes are inconspicuous. But to those who know, especially early Facebook employees, these stripes serve as a monument to the company’s original spirit of “move fast and break things.” They’re a memorial to events that transpired in the summer of 2007.

A view of Hacker Square on Facebook’s headquarters in Menlo Park, California.


At the time, Facebook was still a small company with no more than 300 people, and its headquarters was a trio of buildings in downtown Palo Alto, according to three former Facebook employees who spoke with CNBC.

The company operated out of 156 and 154 University Ave, but Facebook’s cafeteria sat a block away at 164 Hamilton Ave.

The two buildings are separated by a three-minute walk, but Facebook employees could shorten the distance by cutting through a tiny alleyway perpendicular to Hamilton Ave that was exactly across the street from the cafeteria. To cross, employees had to either walk to either end of the block or risk a jaywalking ticket, as there was no crosswalk connecting the alleyway and the cafeteria.

At least there wasn’t one until Facebook held an overnight hackathon one evening during the summer of 2007.

During these hackathons, Facebook employees would bring to life the ideas they’d kept in the back of their minds but hadn’t yet had a chance to execute. Usually the nights resulted in new software features for the company’s website, but the aftermath of this particular hackathon was more tangible.

The following day, there was suddenly a crosswalk connecting the University Ave alleyway and the Facebook cafeteria.

For the most part, the hack went unnoticed — the crosswalk was so convincing, people actually started using it. The white stripes had been spray painted, but its measurements had been drawn to city specifications.

A screenshot of a photo uploaded to the “Facebook Archivist” Facebook group of a crosswalk painted in Palo Alto in 2007 near the company’s headquarters at the time.

Provided to CNBC

It wasn’t until that afternoon that the authorities finally noticed. A Palo Alto Police Department officer riding around on a bicycle stopped, took his helmet off and put it under his arm and stared at the crosswalk. Finally he slapped his forehead, realizing the crosswalk didn’t belong there, according to one former Facebook employee who witnessed the event.

The officer questioned Facebook staffers about the crosswalk, asking them if they knew who had painted the crosswalk. It wasn’t until this moment that most of the company began to realize what had been done.

People laughed, but it wasn’t cool, another former employee told CNBC. The crosswalk was disrespectful to the City of Palo Alto, which Facebook did not want as the company cared about its relationship with the city, that employee said.

Over the next few days, the city sandblasted the citizen crosswalk off and re-asphalted it, leaving a darker shade of black on the road where the white stripes had been, the former Facebook employees said.

The City of Palo Alto may have removed the crosswalk from its road, but former Facebook employees still talk about it.

“‘Somebody’ painted a cross walk in the middle of Hamilton Ave. so it’d be easier to get to lunch in Building 164. Classic,” wrote a member of the “Facebook Archivist” Facebook group, where former company employees post about their memories and experiences working at the social network.

A screenshot of Hacker Square on Facebook’s Menlo Park campus as seen from satellite view of Google Maps.

The gray stripes at Hacker Square are the most prominent reminder.

If you ever been to Facebook’s campus, you may have seen or walked on the stripes without noticing them. They sit just south of Facebook’s Building 14 and Building 16. They are large enough to be visible from the satellite imagery of Google Maps, and you can clearly spot them if you do an image search of “Facebook Hacker Square.”

The story of the crosswalk is often told to Facebook employees during new-hire orientations, according to the former Facebook employees, to give them a sense of the company’s original culture.

That culture can be summed up in the phrase: “ask for forgiveness, not permission,” one of the former employees said.

Facebook declined to comment.

WATCH: Here’s how to see which apps have access to your Facebook data — and cut them off


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