Talk of the Town
(NEW YORK) — A court ruled in favor of OpenAI and its chief executive, Sam Altman, in a lawsuit brought by Elon Musk over alleged misconduct in the company’s evolution from a non-profit upstart to a for-profit corporation.
This is a developing story. Please check back for updates.
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(NEW YORK) — A jobs report to be released on Wednesday will provide a key barometer of the U.S. economy as policymakers grapple with a combination of elevated inflation and sluggish hiring.
The labor market slowed sharply last year, prompting interest rate cuts at the Federal Reserve and concern among some observers about the nation’s economic prospects.
The U.S. added an average of 49,000 jobs each month in 2025, which marked a staggering decline from 168,000 monthly jobs added over the prior year.
Economists expect employers to have hired 55,000 workers in January, amounting to a slight uptick from 50,000 hires in December. Still, the anticipated performance would barely register above the lackluster hiring of a typical month last year.
In a bright spot, however, the unemployment rate remains low by historical standards. Unemployment stood at 4.4% in December, and economists expect that level to have been left unchanged in January.
The U.S. Bureau of Labor Statistics delayed the release of the January data due to a partial government shutdown last week, which helps explain why the jobs report is set to be issued on a Wednesday in the middle of the month, rather than its customary release on the month’s first Friday.
The jobs report will arrive weeks after a series of job cuts that slashed tens of thousands of workers combined at a handful of name-brand companies.
Amazon said last month it planned to cut about 16,000 employees as it seeks to “strengthen” its business by reducing “layers” and “bureaucracy” within its workforce.
A day earlier, UPS announced it plans to cut as many as 30,000 employees this year. Pinterest also unveiled an effort to slash 15% of its staff, according to a securities filing. The company boasts about 4,500 employees worldwide, a securities filing shows.
So far, the cooling labor market has avoided widespread job losses, making the recent flurry of layoffs an outlier, analysts previously told ABC News. The high-profile cuts reflect trends in tech and some other sectors, however, where companies have reversed a pandemic-era hiring blitz and pivoted in response to artificial intelligence.
The Fed slashed interest rates three consecutive times last year in an effort to boost the flagging labor market. In January, the Fed opted to hold interest rates steady, taking a cautious approach due in part to elevated inflation.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
Still, Fed Chair Jerome Powell appeared to view the economy in a favorable light, saying it is expanding at a “solid pace” during a Jan. 28 press conference.
“While job gains have remained low, the unemployment rate has shown some signs of stabilization,” Powell added.
Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.
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(WASHINGTON) — The Senate voted Wednesday to confirm Federal Reserve chair nominee Kevin Warsh, clearing the way for Warsh to replace central bank head Jerome Powell when his term ends later this week.
The Senate confirmed Warsh by a vote of 54 to 45. Sen. John Fetterman, D-Pa., was the lone Democrat to vote in favor of Warsh.
The vote comes weeks after the Department of Justice moved to drop its criminal probe into Powell. Before that, Warsh had faced a bipartisan stonewall in the Senate Banking Committee over the investigation.
The probe into Powell focused on alleged false testimony to Congress about an office renovation. Powell, whose term ends on Friday, called the investigation a politically motivated effort to influence interest-rate policy.
Last month, Washington U.S. Attorney Jeaninne Pirro said the investigation into the office renovation would be taken up by the Fed’s inspector general.
Sen. Thom Tillis, R-N.C., who previously vowed to oppose Warsh’s nomination on account of the investigation, said he would flip his vote after the investigation was set aside. Tillis greenlit the nomination in a committee vote last month, helping advance Warsh to a confirmation vote on the full Senate floor.
Powell said last month that he would stay on at the central bank’s board of governors after his term expires next month as the investigation into the central bank’s office renovation continues.
“I’ve said I won’t leave the board until this investigation is well and truly over with transparency and finality, and I stand by it,” Powell said at a press conference in Washington, D.C.
“My concern is really about the series of legal attacks on the Fed, which threaten our ability to conduct monetary policy without considering political factors,” Powell added.
Trump previously denied any involvement in the criminal investigation.
Powell could remain on the Fed’s 12-member policymaking board until 2028, retaining a role in the central bank’s interest-rate policy over that period.
Warsh, a former Fed official, will serve a 4-year term as chair. He is currently a fellow at the Hoover Institution conservative think tank, which is based at Stanford University.
During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.
In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.
Warsh is set to take the helm of the Fed in a challenging period for central bank policymakers.
Inflation rose for a second consecutive month as the U.S.-Israeli war with Iran continued to send gasoline prices surging in April, government data on Tuesday showed. Annual inflation jumped to its highest level in three years, according to the U.S. Bureau of Labor Statistics.
The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.
If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.
Markets forecast a roughly 60% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool. The odds of an interest-rate hike by the end of the year stand at about 30%.
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(NEW YORK) — Mortgage rates whipsawed in recent weeks as markets reacted to a flurry of policies from the Trump administration.
It began with a major milestone. Mortgage rates earlier this month fell below 6% for the first time in nearly three years, according to a data released by Mortgage News Daily.
“The progress stems directly from President Trump’s aggressive agenda to restore the American Dream of homeownership,” the White House touted in a statement on Jan. 12. The Trump administration cited its announcement days earlier, calling on government-sponsored mortgage lenders to purchase $200 billion in mortgage-backed securities.
Within little more than a week, however, mortgage rates had climbed to 6.21%, responding to rattled bond markets and erasing the previous reduction. The uptick came as Trump issued a tariff threat to European allies over his demands to acquire Greenland at the time. When Trump backed off of that levy soon afterward, mortgage rates fell but remained above previous lows, Mortgage News Daily data showed.
The volatility in mortgage rates underscored the risks posed by recent trade tensions, which threaten to push up Treasury yields and, in turn, drive mortgage rates higher, some analysts told ABC News.
Still, they added, mortgage rates will likely face downward pressure this year from anticipated interest-rate cuts at the Federal Reserve, and Trump may take further steps of his own to reduce borrowing costs.
“President Trump is certainly not sitting back and doing nothing,” Susan Wachter, a professor of real estate at University of Pennsylvania’s Wharton School of Business, told ABC News.
“Some of it is big things on the international front, which are potentially destabilizing. And there’s an attempt to do anything and everything for the affordability of housing,” Wachter added.
To be sure, average 30-year mortgage rates have dropped from 7.08% to 6.17% since Trump took office, according to Mortgage News Daily. That drop-off owes in part to a post-pandemic cooldown of inflation, which allowed the Federal Reserve to begin lowering interst rates.
In a social media post earlier this month, Trump said lower mortgage rates would “make the cost of owning a home more affordable. It is one of my many steps in restoring Affordability.”
Mortgage rates closely track the yield on a 10-year Treasury bond. Since bonds pay a given investor a fixed amount each year, the specter of inflation risks higher prices that would eat away at those annual payouts. In turn, bonds often become less attractive in response to economic turmoil. When demand falls, bond yields rise.
U.S. Treasury yields jumped last week in the aftermath of Trump’s tariff threat over Greenland, which appeared to presage a possible trade war with several European allies.
The 10-year Treasury yield climbed as high as 4.3% in the aftermath of Trump’s threat, before dropping steadily down to 4.21% as Trump withdrew the levy and backed negotiations over Greenland, MarketWatch data showed.
As tensions rose in response to Trump’s tariff threat, some major U.S. bondholders in Europe appeared poised to sell. A Danish pension fund, AkademikerPension, said last Tuesday it would unload U.S. treasuries by the end of the month. It remains unclear whether other European bondholders will follow suit, especially after Trump’s reversal on tariffs.
If a substantial share of U.S. bondholders were to sell off their assets, it would slash demand and push up bond yields, some analysts said.
Since 30-year mortgage rates and other key interest rates track the yield on 10-year treasury bonds, a selloff of treasuries could bring about higher monthly payments for home loans, Raymond Robertson, a professor of trade, economics and public policy at Texas A&M University, told ABC News.
“It’s a pretty big concern,” Robertson said.
Marc Norman, associate dean at the New York University School of Professional Studies and Schack Institute of Real Estate, said bondholders are evaluating the reliability of U.S. government debt.
“Basically, it’s a bet on the U.S. government,” Norman told ABC News. “If that becomes unstable and people lose trust, it could have a big effect.”
Despite the uptick in mortgage rates in recent weeks, borrowing costs for homebuyers remain markedly lower than where they stood a year ago.
Analysts attributed the drop to a series of interest rate cuts at the Fed, as well as Trump’s order calling on Fannie Mae and Freddie Mac to buy hundreds of billions of dollars in mortgage-backed securities. After the order, Bill Pulte, the head of the Federal Housing Finance Agency, instructed Fannie Mae and Freddie Mac to up their bond investments in an effort to put downward pressure on mortgage rates, the Associated Press reported last week.
By ordering a federal agency to buy up some mortgage-backed securities, the Trump administration helped increased demand for the underlying loans, which pushed bond yields lower, Wachter said.
“This mortgage bond proposal is not a big move but it makes a difference,” Wachter added. Wachter said she expects mortgage rates to fall further over the course of this year, though she acknowledged ongoing risk: “Investors don’t like uncertainty.”
Still, Wachter said, “If you’re looking to buy a home, today is as good a day as any.”
If homebuyers move forward with a purchase but later find that mortgage rates have continued to fall, they can opt to refinance their homes. “The old saying is, ‘You marry the home and you date the mortgage,'” Wachter said.
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