Today is
Monday March 31, 2025
WASHINGTON (AP) — The Federal Reserve on Wednesday cut its benchmark interest rate by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation but also made borrowing painfully expensive for American consumers.
The rate cut, the Fed’s first in more than four years, reflects its new focus on bolstering the job market, which has shown clear signs of slowing. Coming just weeks before the presidential election, the Fed’s move also has the potential to scramble the economic landscape just as Americans prepare to vote.
The central bank’s action lowered its key rate to roughly 4.8%, down from a two-decade high of 5.3%, where it had stood for 14 months as it struggled to curb the worst inflation streak in four decades. Inflation has tumbled from a peak of 9.1% in mid-2022 to a three-year low of 2.5% in August, not far above the Fed’s 2% target.
The Fed’s policymakers also signaled that they expect to cut their key rate by an additional half-point in their final two meetings this year, in November and December. And they envision four more rate cuts in 2025 and two in 2026.
In a statement, the Fed came closer than it has before to declaring victory over inflation: It said it “has gained greater confidence that inflation is moving sustainably toward 2%.â€
Though the central bank now believes inflation is largely defeated, many Americans remain upset with still-high prices for groceries, gas, rent and other necessities. Former President Donald Trump blames the Biden-Harris administration for sparking an inflationary surge. Vice President Kamala Harris, in turn, has charged that Trump’s promise to slap tariffs on all imports would raise prices for consumers even further.
Rate cuts by the Fed should, over time, lower borrowing costs for mortgages, auto loans and credit cards, boosting Americans’ finances and supporting more spending and growth. Homeowners will be able to refinance mortgages at lower rates, saving on monthly payments, and even shift credit card debt to lower-cost personal loans or home equity lines. Businesses may also borrow and invest more. Average mortgage rates have already dropped to an 18-month low of 6.2%, according to Freddie Mac, spurring a jump in demand for refinancings.
In an updated set of projections, the Fed’s policymakers now collectively envision a faster drop in inflation than they did three months ago but also higher unemployment. They foresee their preferred inflation gauge falling to 2.3% by year’s end, from its current 2.5%, and to 2.1% by the end of 2025. And they now expect the unemployment rate to rise further this year, to 4.4%, from 4.2% now, and to remain there by the end of 2025. That’s above their previous forecasts of 4% for the end of this year and 4.2% for 2025.
The Fed’s next policy meeting is Nov. 6-7 — immediately after the presidential election. By cutting rates this week, soon before the election, the Fed is risking attacks from Trump, who has argued that lowering rates now amounts to political interference. Yet Politico has reported that even some key Senate Republicans who were interviewed have expressed support for a Fed rate cut this week.
The central bank’s officials fought against high inflation by raising their key rate 11 times in 2022 and 2023. Wage growth has since slowed, removing a potential source of inflationary pressure. And oil and gas prices are falling, a sign that inflation should continue to cool in the months ahead. Consumers are also pushing back against high prices, forcing such companies as Target and McDonald’s to dangle deals and discounts.
The Fed’s decision Wednesday drew the first dissent from a member of its governing board since 2005. Michelle Bowman, a board member who has expressed concern in the past that inflation had not been fully defeated, said she would have preferred a quarter-point rate cut.
Yet after several years of strong job growth, employers have slowed hiring, and the unemployment rate has risen nearly a full percentage point from its half-century low in April 2023 to a still-low 4.2%. Once unemployment rises that much, it tends to keep climbing. Fed officials and many economists note, though, that the rise in unemployment this time largely reflects an influx of people seeking jobs — notably new immigrants and recent college graduates — rather than layoffs.
At issue in the Fed’s deliberations is how fast it wants to lower its benchmark rate to a point where it’s no longer acting as a brake on the economy — nor as an accelerant. Where that so-called “neutral†level falls isn’t clear, though many analysts peg it at 3% to 3.5%.
LAS VEGAS — Casino company Wynn Resorts Ltd. has agreed to pay $130 million to federal authorities and admit that it let unlicensed money transfer businesses around the world funnel funds to gamblers at its flagship Las Vegas Strip property.
The publicly traded company said a non-prosecution settlement reached Friday represented a monetary figure identified by the U.S. Justice Department as “funds involved in the transactions at issue†at the Wynn Las Vegas resort.
In statements to the media and to the federal Securities and Exchange Commission, the company said the forfeiture wasn’t a fine and findings in the decade-long case didn’t amount to money laundering.
U.S. Attorney Tara McGrath in San Diego said the settlement showed that casinos are accountable if they let foreign customers evade U.S. laws. She said $130 million was believed to be the largest forfeiture by a casino “based on admissions of criminal wrongdoing.â€
Wynn Resorts said it severed ties with all people and businesses involved in what the government characterized as “convoluted transactions†overseas.
“Several former employees facilitated the use of unlicensed money transmitting businesses, which both violated our internal policies and the law, and for which we take responsibility,†the company said in a statement Saturday to The Associated Press.
In its news release, the Justice Department detailed several methods it said were used to transfer money between Wynn Las Vegas and people in China and other countries.
One, dubbed “Flying Money,†involved an unlicensed money agent using multiple foreign bank accounts to transfer money to the casino for use by a patron who could not otherwise access cash in the U.S.
Another involved having a person referred to as a “Human Head†gamble at the casino at the direction of another person who was unwilling or unable to place bets because of anti-money laundering and other laws.
The Justice Department said one person, acting as an independent agent for the casino, conducted more than 200 money transfers worth nearly $18 million through bank accounts controlled by Wynn Las Vegas “or associated entities†on behalf of more than 50 foreign casino patrons.
Wynn Resorts called its agreement with the government a final step in a six-year effort to “put legacy issues fully behind us and focus on our future.†The SEC filing noted the investigation began about 2014.
It did not use the name of former CEO Steve Wynn. But since 2018, the parent company has been enmeshed with legal issues surrounding his departure after sexual misconduct allegations against him were first reported by the Wall Street Journal.
Wynn attorneys in Las Vegas did not respond Saturday to messages about the company settlement.
Wynn, now 82 and living in Florida, has said he has no remaining ties to his namesake company. He has consistently denied committing sexual misconduct.
The billionaire developer of a luxury casino empire in Las Vegas, Massachusetts, Mississippi and the Chinese gambling enclave of Macao resigned from Wynn Resorts after the reports became public, divested company shares and quit the corporate board.
Last year, in an agreement with Nevada gambling regulators, he agreed to cut links to the industry he helped shape in Las Vegas and pay a $10 million fine. He admitted no wrongdoing.
In 2019, the Nevada Gaming Commission fined Wynn Resorts a record $20 million for failing to investigate claims of sexual misconduct made against him before he resigned. Massachusetts gambling regulators fined the company and a top executive $35.5 million for failing to disclose the sexual misconduct allegations against Wynn while it applied for a license for its Encore Boston Harbor resort. The company made no admissions of wrongdoing.
Wynn Resorts agreed in November 2019 to accept $20 million in damages from Wynn and $21 million from insurance carriers to settle shareholder lawsuits accusing company directors of failing to disclose misconduct allegations.
The Justice Department said Friday that as part of its investigation, 15 people previously admitted money laundering, unlicensed money transmission or other crimes, paying criminal penalties of more than $7.5 million.
Wynn Resorts noted in its statement on Friday that its non-prosecution agreement with the government did not refer to money laundering.