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When inflation spiked in the wake of the pandemic in 2021 and 2022, the Federal Reserve was “behind the curve” in its response, one official from the central bank told Forbes.
Forbes recently spoke with Austan Goolsbee, president of the Federal Reserve Bank of Chicago and an alternate member of the Federal Open Market Committee, which votes on the target federal funds rate. The Fed began hiking rates in March 2022, and then raised the federal funds rate from near-zero to over 5%—the fastest interest rate increase in four decades.
Looking ahead to the second half of the decade, Goolsbee is keeping a close eye on growth in productivity, which he said would support an expanding economy without inflation.
FIRST UP
Despite losses for its big tech peers, Nvidia’s stock rallied Monday, leading it to eclipse Microsoft as the second-largest company in the world amid the AI boom. Nvidia registered its highest market cap since August at $3.19 trillion, trailing only Apple, valued at $3.4 trillion.
Influencers are touting egg donation as a cash cow to millions of followers on the internet. But while social media is helping to destigmatize fertility problems and procedures, some donor-conceived people and experts say the vast majority of content that lures donors with big payouts is doing more harm than good.
BUSINESS + FINANCE
The Dow Jones Industrial Average and S&P 500 suffered their worst days since early September following two new hurdles for investors that threaten to increase the cost of doing business and cut into profit margins. Crude oil prices and government bond yields, which influence borrowing costs as many loans are benchmarked against Treasury notes, both moved to multiweek highs Monday.
TECH + INNOVATION
Andreessen Horowitz cofounder Ben Horowitz tweeted that he and his wife will make a “significant” donation to Vice President Kamala Harris, a notable reversal of his previous support for former President Donald Trump. Still, Horowitz said Harris’ campaign has yet to formally state its intentions with their tech policies and that the “Biden Administration has been exceptionally destructive on tech policy across the industry.”
MONEY + POLITICS
Vice President Kamala Harris defended her economic plan in an interview with 60 Minutes on Monday, predicting Congress will go along with paying for her agenda, as the nominee has already called for an “opportunity economy” focused on the middle class and released plans that include lowering grocery and prescription drug prices and addressing the housing crisis. Harris’ economic plan would increase the federal deficit by $3.5 trillion through 2035, according to an estimate by the Committee for a Responsible Federal Budget.
One of Donald Trump’s prized properties, the landmark building 40 Wall Street, now appears underwater. The remaining 35 years on Trump’s leasehold in the Financial District tower is worth about $116 million, which is $2 million less than the estimated $118 million Trump owes on his mortgage, according to a Forbes analysis.
The Supreme Court declined to take up a challenge brought by social network X on Monday, after the Elon Musk-owned company sued the federal government for forcing it to turn over information about former President Donald Trump to Special Counsel Jack Smith and his team. Prosecutors asked the company, formerly known as Twitter, to sign a non-disclosure agreement barring them from informing Trump or his associates about the warrant.
TRAVEL + LIFESTYLE
As Hurricane Milton, now a Category 4 storm, is slated to make landfall in Florida this week, major U.S. airlines are issuing travel waivers allowing passengers flying in or out of impacted airports to rebook without paying the fare difference. Even if you’re not traveling through Florida this week, your flight may be impacted, so monitor your airline’s app for flight notifications.
TRENDS + EXPLAINERS
The Supreme Court’s new term kicked off Monday, and the justices are slated to hear cases on major issues like guns, transgender rights, vaping and environmental impact studies. The nation’s highest court is likely to add a number of other key cases to its docket, including former President Donald Trump’s criminal cases and challenges to the Biden Administration’s student loan forgiveness relief efforts.
DAILY COVER STORY
Buyer Beware: These Yield-Gushing Oil Bonds Could Derail Your Retirement
TOPLINE Phoenix Capital Group, founded in 2019, says it’s an oil and gas company, specializing in acquiring mineral rights and drilling independently. But its core competency seems to be raising funds from yield-hungry investors.
Mostly through advertising run on conservative radio shows like The Sean Hannity Show and webinars which it holds daily, founder Adam Ferrari reports that Phoenix has so far raised $700 million of a planned $750 million private high yield bond offering. Some 95% of its sales, says Matt Willer, head of Capital Markets, are to people above the age of 55, with half of the funds coming from 401(k)s and IRAs.
Phoenix is one of a growing number of little-known financial firms taking advantage of Congress’s Jumpstart Our Business Startups (JOBS) Act, signed into law by President Barack Obama in 2012, which enabled companies to more easily sell unregistered securities, otherwise known as private placements, directly to individual investors.
From 2009 through 2020, $15 trillion of so-called Reg D offerings were sold, according to a 2023 study by SLCG Economic Consulting. During the same time period, fully SEC registered offerings, of stocks, bonds and ETFs trading on exchanges, tallied $16.4 trillion in sales.
As the ESG (Environmental, Social, and Governance) movement gained traction, many banks and large institutional investors began withdrawing from fossil fuels, citing environmental concerns. This opened a window for sellers of unregistered securities, especially those with enticing offerings like Phoenix and its oil bonds yielding as much as 13%.
WHY IT MATTERS “The private placement market is booming, offering a fast track for companies to raise capital,” says Forbes senior reporter Brandon Kochkodin. “Phoenix Capital Group has tapped into this trend, drawing mom-and-pop investors to its debt with promises of high yields and the opportunity to create ‘generational wealth.’ Yet, a recent deal between Phoenix and Fortress Investment Group, a Wall Street behemoth, suggests that smaller investors might not be getting paid enough interest for the risk they’re taking.”
FACTS + COMMENTS
Elon Musk announced his pro-Trump America PAC will pay for each successful referral of a registered swing state voter who signs a petition “to show support for free speech and the right to bear arms”:
$47: The amount the pro-Trump PAC will pay for each successful referral of the petition
1 million: The number of swing state voters the petition seeks to sign on
$23.5 million: The amount the PAC would pay out if 500,000 signatures came from successful referrals
STRATEGY + SUCCESS
A lack of response, or “ghosting,” can be frustrating in the workplace, especially when it comes from your boss. First, assess whether their absence is out of character, and if so, give them leeway. Ensure your communication is concise and prioritized, establish regular check-ins and keep a detailed record of your communication attempts. If the behavior becomes a chronic issue, consider seeking advice on potential solutions from a mentor or senior leader.
VIDEO
QUIZ
During Sunday night’s preseason NBA game between the L.A. Lakers and the Phoenix Suns, LeBron James found himself in a situation that left him wondering, “‘Is this The Matrix or something?’ It just didn’t feel real,” he told ESPN. What happened during the game?
A. James sustained a concussion
B. He scored zero points for the first time in his career
C. James played alongside his 20-year-old son, Bronny
D. Kevin Durant announced his retirement
Check your answer.
Thanks for reading! This edition of Forbes Daily was edited by Sarah Whitmire, Chris Dobstaff and Caroline Howard.