Bernie Madoff’s victims to receive final payout totaling $131 million
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(NEW YORK) — The fund disbursing money to the victims of Bernie Madoff’s legendary Ponzi scheme began its 10th and final distribution on Monday, putting another $131 million in the pockets of swindled investors.
Twenty-three thousand victims worldwide are receiving payments, bringing their total recoveries to 94% of their losses. Most of these victims were small investors who lost less than $500,000 in the fraud, according to federal prosecutors.
Since the collapse of Madoff’s investment house and his 2009 guilty plea, the Madoff Victim Fund has paid more than $4 billion to nearly 41,000 victims in 127 countries.
“This office has never stopped pursuing justice for victims of history’s largest Ponzi scheme,” acting U.S. Attorney Edward Y. Kim said.
For decades, Madoff used the investment advisory business he founded in 1960 to steal billions from his clients, turning his wealth management firm into the world’s largest Ponzi scheme to benefit himself, his family and select members of his inner circle.
He was sentenced to 150 years in prison, where he died in 2021.
“The unprecedented scope and complexity of the Madoff remission process shows the power of forfeiture to recover assets and to compensate victims,” Principal Deputy Assistant Attorney General Brent Wible said in a statement on Monday.
(WASHINGTON) — Consumer prices rose 2.7% in November compared to a year ago, ticking upward from the previous month and potentially giving pause to the Federal Reserve as it weighs an interest rate cut expected next week. The reading matched economists’ expectations.
The fresh data marked two consecutive months of rising inflation, extending a bout of accelerated price increases that has reversed some of the progress made in lowering inflation earlier in the year.
The inflation gauge makes up the last piece of significant economic data before the Fed announces its next interest rate decision on Dec. 18. A finding of accelerated price hikes may give the Fed pause as it weighs interest rate cuts.
The inflation gauge makes up the last piece of significant economic data before the Fed announces its next interest rate decision on Dec. 18.
Core inflation — a closely watched measure that strips out volatile food and energy prices — increased 3.3% over the year ending in November, matching the previous month, the data showed.
Food prices rose 2.4% in November compared to a year ago, matching the previous month and marking slower price increases than the overall inflation rate.
Prices fell in November compared to a year ago for an array of household staples like cereal, rice, flour, bread, bacon and seafood.
Over that period, the price of eggs soared more than 37%, however, as a result of an avian flu that has depleted supply. Prices for sugar, butter and pork chops also rose faster than the overall inflation rate.
Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain slightly above the target rate of 2%.
In recent months, the Fed has cut its benchmark rate three quarters of a percentage point, dialing back its yearslong fight against inflation and delivering relief for borrowers saddled with high costs.
The Fed is expected to cut interest rates by another quarter of a percentage point at its meeting next week, according to the CME FedWatch Tool, a measure of market sentiment.
Over time, rate cuts ease the burden on borrowers for everything from home mortgages to credit cards to cars, making it cheaper to get a loan or refinance one. The cuts also boost company valuations, potentially helping fuel returns for stockholders.
In theory, the policy eases access to funds, stimulates economic activity and boosts demand. But the promise of bolstered consumer strength risks increased prices.
Speaking at a press conference in Washington, D.C., on Thursday, Fed Chair Jerome Powell voiced optimism about the prospects for achieving a “soft landing,” in which the U.S. averts a recession while inflation returns to normal.
“We continue to be confident that with an appropriate recalibration of our policy stance, strength in the economy and labor market can be maintained with inflation moving sustainably down to 2%,” Powell said.
The trajectory of inflation could shift in the coming months. Some economists expect President-elect Donald Trump’s proposals of heightened tariffs and the mass deportation of undocumented immigrants to raise consumer prices.
When asked about the Fed’s potential response to Trump’s policies, Powell said the central bank would make its rate decisions based on how any policy changes impact the economy.
“In the near term, the election will have no effects on our policy decisions,” Powell said. “We don’t know what the timing and substance of any policy changes will be. We therefore don’t know what the effects on the economy will be.”
“We don’t guess, we don’t speculate and we don’t assume,” Powell added.
(WASHINGTON) — A fresh inflation reading this week flashed a warning: Price increases are rising again, just when the Federal Reserve had appeared close to declaring “mission accomplished” in its yearslong fight to lower them.
In theory, the trend would prompt the Fed to raise rates, or at least hold them steady, when central bankers meet next week. High interest rates, after all, are the main tool the Fed has used to ratchet inflation down from its pandemic-era heights.
Instead, investors peg the chances of a rate cut next week at an overwhelming 98%, according to the CME FedWatch Tool, a measure of market sentiment.
The reason is clear, experts told ABC News: Interest rates will remain historically high even after a small cut. The Fed likely does not view a mild uptick of inflation this fall as enough to deviate from a path of rate cuts it laid out earlier this year, they added.
“I don’t think the recent inflation has diverged enough from what the Fed expected to change its outlook,” William English, a professor of finance at Yale University and a former Fed official, told ABC News.
Consumer prices rose 2.7% in November compared to a year ago, marking two consecutive months of rising inflation, government data this week showed.
Inflation has slowed dramatically from a peak of more than 9% in June 2022. But the recent uptick has reversed some progress made at the start of this year that had landed price increases right near the Fed’s target of 2%.
That progress had helped nudge the Fed toward its landmark shift to interest rate cuts.
In recent months, the Fed has cut its benchmark rate three-quarters of a percentage point, dialing back its fight against inflation and delivering some relief for borrowers saddled with high costs.
Even after the cuts, the benchmark rate stands between 4.5% and 4.75%, its highest level in nearly two decades. The high interest rates have kept borrowing costs high for everything from credit cards to mortgages.
The average interest rate for a 30-year fixed mortgage stands at nearly 6.7%, well above an average rate four years ago of 2.6%, Freddie Mac data shows.
A small rate cut by the Fed would not meaningfully reduce mortgage payments for new loans, Yeva Nersisyan, a professor of economics at Franklin & Marshall College, told ABC News. In turn, the rate decision poses little risk of boosting demand for big-ticket items, like homes, which make up prices most immediately sensitive to lower rates. Other prices operate on a prolonged lag in response to changes in interest rates, she added.
“In that sense, a quarter of a percentage point cut or not really wouldn’t make a difference for inflation,” Nersisyan said.
The anticipated rate cut also reflects the Fed’s consideration of employment, which makes up the other component of its dual mandate besides inflation, English said. The unemployment rate has increased this year from 3.7% to 4.2%, though it remains at a historically low level. Hiring has slowed down but remained solid.
Lower interest rates are meant to stimulate economic activity over the long term, keep the economy growing and safeguard the labor market.
“They’ve been trying to balance two risks: One is that the economy slows more than they thought, and the other is that inflation proves more stubborn than they thought,” English said.
Still, experts cautioned that the recent uptick in inflation may delay or alter plans for rate cuts next year.
“Starting next year, they probably will take a more cautious outlook,” Nersisyan said.
Fernando Gutierrez-Juarez/picture alliance via Getty Images
(NEW YORK) — The price of bitcoin dropped below $100,000 late Thursday, just a day after topping the milestone for the first time.
The world’s largest cryptocurrency continued to slide in early trading on Friday, before recovering some of the losses.
The turmoil for bitcoin did not appear to impact other major crypto coins. Ether, the second-largest cryptocurrency, climbed nearly 5% in early trading on Friday, exceeding $4,000 for the first time since March.
The turn of fortune for bitcoin interrupted a rally set off by the election of former President Donald Trump, who is viewed as friendly toward cryptocurrency.
Since Election Day, the price of bitcoin has climbed nearly 50%. That performance far outpaces the S&P 500, which has risen about 5% over the same period.
Bitcoin has proven highly volatile since its launch about 15 years ago.
As recently as 2021, bitcoin suffered a downturn that cut its value in half. The same thing happened a year earlier, when the initial outset of the pandemic triggered a panic among investors.
“As long as the narrative stays positive, there’s always room to grow,” Bryan Armour, the director of passive strategies research at financial firm Morningstar, told ABC News before bitcoin reached $100,000.
“It’s still a highly volatile asset,” Armour added.
A surge had propelled bitcoin past $100,000 late Wednesday, just hours after Trump nominated crypto booster Paul Atkins to chair the Securities and Exchange Commission.
Atkins, the CEO of consulting firm Patomak Partners, serves as co-chair of the Token Alliance, a cryptocurrency advocacy organization.
Once a crypto critic, Trump has vowed to bolster the cryptocurrency sector and ease regulations enforced by the Biden administration. Trump has also promised to establish the federal government’s first National Strategic Bitcoin Reserve.
In a post on Truth Social early Thursday, Trump took credit for the gains: “CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!!.”
Trump has not spoken publicly about bitcoin since it fell below $100,000.
