Bitcoin drops below $100,000 after reaching milestone for 1st time

(NEW YORK) — Americans’ credit card debt has hit a record high, the Federal Reserve of New York said in a report released this week.

Credit card debt climbed $24 billion over a three-month stretch ending in September, soaring to a level 8% higher than where it stood a year ago, the report said.

Debt holders may seek solace in a string of recent interest rate cuts at the Federal Reserve, which typically reduce borrowing rates for credit cards. But credit card interest rates have proven stubborn, leaving borrowers saddled with near record-high average payments even after the rate cuts.

The average credit card interest rate stands at 20.35%, just slightly below a record-high of 20.79% attained in August before the Fed began cutting rates, Bankrate data showed.

Credit card interest rates remain high, in part, because the Fed’s benchmark rate still stands at a historically high level, experts told ABC News. The incremental cuts in recent months have only partially reversed the previous escalation of rates meant to fight the nation’s worst bout of inflation in decades.

That high baseline rate has collided with a rise in the average credit card margin, or the borrowing cost that companies place on top of the benchmark rate to weather default risk, cover overhead costs and recoup profits, experts added.

“Credit card rates are high, and they’re staying high,” Ted Rossman, a senior industry analyst at Bankrate, told ABC News.

To set credit card interest rates, the industry relies on what’s called a “prime rate,” which is the rate paid by the most creditworthy borrowers. That rate is calculated by adding three percentage points to the Fed’s benchmark interest rate. The prime rate, which acts as a baseline for credit card rates faced by all borrowers, currently stands at 7.75%.

The prime rate remains historically high because the Fed has, so far, taken just a few, incremental steps toward dialing back a yearslong series of rate hikes. In recent months, the Fed has cut interest rates by three-quarters of a percentage point, but such relief offers little savings for credit card borrowers, experts said.

Policymakers at the Fed forecast another quarter-point cut next month, and cuts next year totaling one percentage point, but that will still leave interest rates at an elevated level, according to projections released in September.

“I don’t think the Fed wants a rapid fall in rates,” John Sedunov, a finance professor at Villanova University’s School of Business, told ABC News. “It wants to gradually ease rates back.”

The persistence of high interest rates has coincided with a rise in the margin charged by credit companies over and above the prime rate, some experts said.

The average margin charged by credit card firms reached an all-time high of 14.3% last year, according to a U.S. Consumer Financial Protection Bureau analysis of Federal Reserve data. The margin increased sharply from a rate of 9.3% in 2013, the CFPB found.

The rise in credit card delinquency owes, in part, to a decline in personal savings, as Americans have spent down pandemic-era economic stimulus and turned to credit card loans, Sedunov said.

“Banks may view the amount of risk in credit card lending as higher than it was a few years ago, even though the Fed is lowering rates,” Sedunov said.

Growth in credit card margins also stems from old-fashioned profit-taking on the part of credit card companies, some experts said.

Credit card profitability has increased over the past five years, and has outpaced the profitability of other business drivers at the companies that offer them, according to the CFPB report.

“Banks, especially large banks, are trying to make as much profit as they can,” Fariz Huseynov, a professor of corporate finance at North Dakota State University, told ABC News.

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(NEW YORK) — The Dow Jones Industrial Average closed at a record high on Tuesday, achieving the milestone less than 24 hours after a tariff pledge from President-elect Donald Trump sparked fears of a panic in the stock market.

The S&P 500 also closed at a record high, surging about 0.55% on Tuesday to end the day at 6,021.63. The Dow ticked up about 0.25% during the day’s trading, closing at 44,860.31.

The tech-heavy Nasdaq advanced about 0.60%, ending the trading session at 19,174.30.

Trading began on Tuesday hours after Trump announced plans to slap tariffs on Canada, China and Mexico by executive order on the first day of his administration.

Trump late Monday said he would charge Mexico and Canada with a 25% tariff on all products coming into the United States until action is taken by those countries to stem illegal immigration and the overflow of drugs across the border.

For China, Trump said that he’d impose an additional 10% tariff on products coming to the U.S.

Economists widely forecast that tariffs of this magnitude would increase prices paid by U.S. shoppers, since importers typically pass along a share of the cost of those higher taxes to consumers.

Trump’s tariffs would cost the average U.S. household about $2,600 per year, according to an estimate from the Peterson Institute for International Economics.

The major indexes were bolstered by steady performance among some major firms.

Apple — which assembles many of its products in China but enjoyed key tariff exemptions during Trump’s first term — ticked up 0.12% on Tuesday. While Nvidia, the AI chipmaker that imports most of its semiconductors from Taiwan, rose 0.66% during the trading session.

Tesla, the electric vehicle company led by Trump-ally Elon Musk, has a manufacturing plant in Shanghai, China. Shares of the EV maker ticked down 0.11% on Tuesday.

ABC News’ Lalee Ibssa , Kelsey Walsh, and Soo Rin Kim contributed to this report.

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(NEW YORK) — Multiple “Wanted” signs featuring corporate executives posted in Manhattan this week included a grave warning, according to a New York Police Department bulletin. “Brian Thompson was denied his claim to life. Who will be denied next?” the signs said.

The threats of violence against CEOs followed an outpouring of criticism on social media directed at corporate leaders in the wake of the killing of UnitedHealthcare CEO Brian Thompson. Many online also praised Luigi Mangione, the murder suspect, who assailed large corporations in writings found by police.

The wave of sympathy toward Mangione and hostility toward CEOs sparked debate about how a set of Americans had come to cheer, or at least condone, wishes of violence hurled toward corporate executives.

Some experts who spoke to ABC News attributed the anti-corporate outcry to a host of overlapping trends: widening wealth inequality and a perception of an economy rigged against everyday people, blistering rhetoric supercharged by social media and a populist strain of politics that faults elites.

“People feel that the system just isn’t built to favor regular folks. That’s underlying a lot of the macabre response that we’ve seen to this shooting,” Chris Jackson, senior vice president of public affairs for Ipsos in the U.S., told ABC News.

Other experts, however, have said the criticism voiced by a small but outspoken minority risked overstating the level of dissatisfaction with CEOs.

“Despite a vocal fringe, most Americans continue to admire businesses and their leaders as vital forces of innovation, prosperity and stability,” Jeffrey Sonnenfeld, a professor of management at Yale University who regularly convenes meetings of the nation’s top CEOs, wrote in the outlet Chief Executive.

Mangione was arrested by police on Monday in Altoona, Pennsylvania, on gun charges, before being charged in New York with murder. He has pleaded not guilty to the charges in Pennsylvania, and has fought extradition to New York.

The online response to the murder has arrived at a moment of deep distrust about what determines economic outcomes, polls show. More than two-thirds of Americans think the nation’s economy is rigged to advantage the rich and powerful, an Ipsos survey last year found.

That perception of unfairness coincided with a rise in anti-corporate attitudes among members of both major parties, according to a 2022 Pew survey. Only 1 in 4 adults believed large businesses have a positive effect on the way things are going in the country, down from 36% just three years earlier, the poll showed.

“There’s growing dissatisfaction and anger toward top-level corporate management,” Daniel Kinderman, a professor of political science and international relations at the University of Delaware, told ABC News.

Such distrust, Kinderman said, traces in part to wide economic inequality. The wealthiest 10% of U.S. families control about 60% of the country’s wealth, a Congressional Budget Office report in October found.

“A lot of people are working hard, but they’re not really getting anywhere,” Kinderman said. “There’s a sense that the system is broken.”

Some experts have disputed explanations of the anti-CEO sentiment that attribute the phenomenon primarily to individuals’ economic outlook, however.

Sonnenfeld said the hostility owes to populists on both ends of the political spectrum who villainize corporate America.

“This unholy alliance between the far left and far right seems to think that businesses cannot succeed without doing something unethical or hurting others,” Sonnenfeld wrote in the outlet Chief Executive.

Much of the vitriol has targeted the health care industry, which aggravates consumers more than corporations overall, Tom Rogers, the founder of CNBC, told ABC News.

“I don’t really see another industry where the depth of disapproval and disgust that people have would be anywhere near as motivating in terms of the ill will toward CEOs,” Rogers said.

Social media also drew blame from experts, who faulted algorithms that they said often reward provocative posts with higher engagement and wider reach. Viral posts online have listed the names and salaries of several health insurance executives, the NYPD said in its bulletin this week.

Robert Pape, a professor of political science at the University of Chicago who studies political violence, acknowledged the role of social media but said a focus on any single factor risks overlooking the contribution from others, including economic frustration and populist politics.

“It’s really an interwoven cocktail,” Pape said.

Pape pointed to recent bouts of political violence that in his view have weakened a longstanding taboo against it: the insurrection at the Capitol on Jan. 6, 2021; the assault of former House Speaker Nancy Pelosi’s husband, Paul Pelosi, in 2022; and a pair of assassination attempts on former President Donald Trump during the 2024 presidential campaign.

“Political violence has become normal,” Pape said. “We’re on a slippery slope.”

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