Inflation data to show whether prices continued cooldown

(NEW YORK) — The Federal Reserve is set to make a pivotal decision about its benchmark interest rate on Wednesday that could dial back its years-long fight against inflation.

Investors widely expect the Fed to cut interest rates for the first time since 2020, delivering long-sought relief for consumers saddled by high borrowing costs for everything from credit cards to mortgages.

“The time has come for policy to adjust,” Fed Chair Jerome Powell said last month at an annual gathering in Jackson Hole, Wyoming. “The direction of travel is clear.”

Inflation has slowed dramatically from a peak of about 9% in 2022, though it remains slightly higher than the Fed’s target of 2%.

Meanwhile, the job market has cooled. A weaker-than-expected jobs report in each of the last two months has stoked concern among some economists.

In theory, lower interest rates help stimulate economic activity and boost employment; higher interest rates slow economic performance and ease inflation.

“We will do everything we can to support a strong labor market as we make further progress toward price stability,” Powell said last month.

The chances of an interest rate cut at the Fed’s meeting on Wednesday are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.

Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point, or opt for a larger half-point cut. The tool estimates the probability of a half-point cut at 65% and the odds of a quarter-point cut at 35%.

A half-point cut risks overstimulating the economy and rekindling elevated inflation, while a quarter-point cut threatens to delay the type of economic jumpstart that may be required to avert a recession, Seema Shah, chief global strategist at Principal Asset Management, told ABC News in a statement.

“Rarely have market expectations been so torn” on the eve of a rate decision, Shah added.

Regardless of the size of the rate cut, borrowers should not expect immediate relief, Elizabeth Renter, senior economist at NerdWallet, told ABC News in a statement.

“This initial rate cut will have little immediate impact,” Renter said. “I anticipate many consumers and business owners will take the beginning of this change in monetary policy as a sign of hope.”

The expected rate cut on Wednesday would go into effect less than 50 days before the November election.

The Fed says it bases its decisions on economic conditions and operates as an independent government body.

When asked about the 2024 election at a press conference in Washington, D.C., in December, Powell said, “We don’t think about politics.”

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(NEW YORK) — Consumer prices rose 2.5% in August compared to a year ago, slowing more than expected and delivering welcome news for the Federal Reserve, days before a widely expected interest rate cut.

Inflation cooled significantly from a year-over-year rate of 2.9% recorded in the previous month.

Price increases have fallen from a peak in 2022, but inflation remains higher than the Federal Reserve’s target rate of 2%.

The chances of an interest rate cut at the Fed’s meeting next week are all but certain, according to the CME FedWatch Tool, a measure of market sentiment. Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point, or opt for a larger half-point cut.

So far this year, the job market has slowed alongside cooling inflation. That trend was underscored last week by a weaker-than-expected jobs report, though employers added a solid 142,000 jobs. The unemployment rate has ticked up this year from 3.7% to 4.2%.

The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment, while high interest rates slow economic performance and ease inflation.

Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy job market.

Speaking at an annual gathering in Jackson Hole, Wyoming last month, Fed Chair Jerome Powell said the “time has come” for the Fed to adjust its interest rate policy.

At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. Last month, Powell appeared to indicate that the Fed had achieved that objective.

“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.

Since last year, the Federal Reserve has held interest rates at their highest level in more than two decades. High borrowing costs for everything from mortgages to credit card loans have helped slow the economy and lower inflation, but the policy risks tipping the U.S. into a recession.

Last month, Goldman Sachs economists raised the probability of a U.S. recession in the next year from 15% to 25%. However, economists disagree about whether current economic conditions warrant serious concern.

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(NEW YORK) — When a man claiming to own a vacant Randolph, New Jersey, investment property called real estate agent Lisa Shaw last summer, she thought it would be the start of another typical real estate transaction in the Garden State suburbs.

“He said he had this piece of property for over 25 years in Randolph, even though he had never been to Randolph,” Shaw told ABC News. 

She said she asked the man why he wanted to put this land on the market.

“He said, ‘Well, real estate is really high right now.’ He thought he could get the best dollar for it,” Shaw said. “He also told me his wife was ill and he needed the proceeds from that money for his wife’s illness.”

Shaw says she did not realize that not only did the man on the phone not actually own the property in question — but that this one phone call would ultimately connect that vacant lot to an alleged international crime web that authorities say involves fake documents ranging from Canada to Vietnam.

The incident is just the latest example of what the FBI says is a growing and troubling new form of fraud affecting unsuspecting landowners nationwide.

“Who would ever think that somebody would sell your own property from right under your nose, without your knowledge, and be able to dupe the system and everyone involved in that transaction?” Jim Dennehy, assistant director in charge of the FBI for New York, told ABC News Chief Business Correspondent Rebecca Jarvis.

‘No one suspected it’

Shaw, who has been selling properties in and around Randolph for more than two decades, says that after she spoke with the purported property owner, she asked him for documentation.

The man said that he and his wife were Canadian citizens living in England, and he provided a British address and copies of what appeared to be their driver’s licenses from the Canadian province of Ontario.

What Shaw didn’t know was that the property in Randolph was actually owned by a husband and wife from Texas. When the driver’s licenses arrived, they had the names of the real owners — just not their Texas address.

“Everything looked fine,” Shaw said, explaining that she proceeded to put the land up for sale and immediately received around 10 offers.

But the licenses turned out not to be fine. An official with Canada’s Peel Regional Police told ABC News that both identification cards were fake.

Although the licenses contained real addresses in the Toronto area, the owner of the home at one of those addresses told ABC News that she has no idea how her address ended up being listed on the fake identification card, and that she had nothing to do with an attempted property sale in New Jersey. The owner of the home at the British address, an attorney, said the same thing — but he suspected that scammers could have found his home address in England because he used to own property in Florida.

Back when the property in Randolph was getting ready to be sold, Shaw says no one involved detected that this was a scam.

“No one suspected it, not the attorneys, not myself, not the title company,” she said.

When the supposed property owner asked Shaw about the offers that had come in, Shaw said she told him that the highest one was for $140,000, and that he told her to immediately accept the offer.

Sale documents were soon prepared and the man provided paperwork that purportedly showed he had gotten the deed notarized at the U.S. embassy in Vietnam.

In December, the deal closed — all while the real property owners had no clue that the transaction had taken place. The supposed seller asked for the $140,000 payment to be split in half and sent to two different banks, according to Shaw.

But the title company encountered trouble while attempting to submit the second $70,000 payment.

“That set off the red flag,” explained Shaw, who said that the title company was then able to get in touch with the son of the real owners. “We knew it was definitely identity fraud.”

But by that point, it was too late. Shaw said that the initial $70,000 payment had already gone through, and the supposed seller had disappeared.

The buyer that paid $70,000 to the fraudulent seller is still listed in municipal and county tax records as the property’s new owner — but since the original owners did not authorize the sale, it remains unclear what will happen to the land now.

“It was a real shock to find out that people were devious [enough] to do this kind of thing,” Shaw said.

‘A lot of litigation’

ABC News has learned that the FBI is now investigating the alleged scammers who fraudulently sold the lot in Randolph — though the owners of the British and Canadian homes that were used as fake addresses said they have not yet been contacted by American law enforcement authorities. The FBI would not confirm or deny details of the investigation.

Dennehy, who was previously FBI Newark’s Special Agent in Charge, is urging owners of vacant land to remain vigilant and check their property records, as the bureau has reported a 500% increase in vacant land fraud over the last four years.

“It all comes down to due diligence on behalf of the buyer, the real estate agent, the title companies and beyond,” Dennehy said, explaining that scam artists pretend to be real landowners by using publicly accessible property information.

Dennehy cited another New Jersey case in which a property owner found out that her land was fraudulently sold when the new owner showed up with construction equipment.

The FBI is encouraging real estate agents and property owners who suspect fraud to contact authorities before money changes hands.

“It’s probably going to be a whole lot of litigation for many, many months and years to come, if that money is already gone,” Dennehy said. “Technically you’re no longer the owner of the property, so now it has to get into civil lawsuits, a lot of lawyers [with] a lot of litigation involved in order to try to reclaim what’s yours to begin with.”

‘Vacant land is very easy to steal’

As a result of these scams, real estate industry groups in parts of the country with large swaths of vacant land are issuing urgent warnings to their members.

“Vacant land is very easy to steal because not everybody is going to be checking up on a vacant piece of property once a month,” Emily Bowden, executive officer of the Sussex County Association of REALTORS in New Jersey, told ABC News. “Not everyone who owns that land necessarily lives in our area.”

Bowden said real estate agents should try to meet with sellers in person whenever possible, make sure that their mailing addresses line up, and assess how well sellers actually know the lay of the land that they are seeking to put on the market.

A desire to sell a vacant lot as quickly as possible can be suspicious, Bowden said, adding that real estate agents who do not do their due diligence when representing fraudulent sellers could face lawsuits.

Derek Doernbach, who sells properties on the Jersey Shore, says he was contacted by three purported sellers who he believes were actually scammers. He said that, as a result of his suspicions, he declined to list any of the three properties.

According to Doernbach, all of the supposed sellers sent him Canadian driver’s licenses containing the exact same picture and address as the license that was presented to Shaw by the alleged scammer in the Randolph case.

“Without a doubt, this has to be the same people, or it’s just a ring on the dark web that is circulating the same driver’s license around,” Doernbach said.

A year after she was first contacted by the alleged Randolph scammer, Shaw says she wants to make sure other real estate agents remain on the lookout.

“If you have a piece of property that someone wants to sell and it’s vacant property, really, really get your feelers up on that one because there could be a potential fraud,” she said. “It’s a very easy way that they’re doing this, and it’s successful. And nobody knows until after the fact.”

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