Business

Which Interest Rate Should You Care About?

Published

10 months ago

February 14, 2025

Which Interest Rate Should You Care About?

Watch out for interest rates.

Not the short-term rates controlled by the Federal Reserve. Barring an unforeseen financial crisis, they’re not going anywhere, especially not after the jump in inflation reported by the government on Wednesday.

Instead, pay attention to the 10-year Treasury yield, which has been bouncing around since the election from about 4.8 to 4.2 percent. That’s not an unreasonable level over the last century or so.

But it’s much higher than the 2.9 percent average of the last 20 years, according to FactSet data. At its upper range, that 10-year yield may be high enough to dampen the enthusiasm of many entrepreneurs and stock investors and to restrain the stock market and the economy.

That’s a problem for the Trump administration. So the new Treasury secretary, Scott Bessent, has stated outright what is becoming an increasingly evident reality. “The president wants lower rates,” Mr. Bessent said in an interview with Fox Business. “He and I are focused on the 10-year Treasury.”

Treasuries are the safe and steady core of many investment portfolios. They influence mortgages, credit cards, corporate debt and the exchange rate for the dollar. They are also the standard by which commercial, municipal and sovereign bonds around the world are priced.

What’s moving those Treasury rates now is bond traders’ assessments of the economy — including the Trump administration’s on-again, off-again policies on tariffs, as well as its actions on immigration, taxes, spending and much more.

Mr. Bessent, and President Trump, would like those rates to be substantially lower, and they’re trying to talk them down. But many of the president’s policies are having the opposite effect.

The president needs the bond market on his side. If it comes to disapprove of his policies, rates will rise and the economy — along with the fortunes of the Trump administration — will surely suffer.

Treasuries, not Fed Rates

Mr. Bessent may be focusing on Treasury rates, or yields, partly to relieve pressure on the Federal Reserve, which President Trump frequently berated in his first term and on the campaign trail.

The Fed’s independence is sacrosanct among most economists and many investors. During the campaign, Mr. Trump repeatedly called on the Fed to lower rates. Yet any threat to the Fed’s ability to operate freely could panic the markets, which, clearly, is not what Mr. Trump wants.

To the contrary, when the markets are strong, he frequently cites them as a barometer of his popularity. In 2017, he boasted about the performance of the stock market an average of once every 35 hours, Politico calculated.

Shortly after the November election, I wrote that the markets might restrain some of Mr. Trump’s actions. But I wouldn’t go too far with this now. Few government departments or traditions seem to be off limits for the administration’s aggressive changes in policy or reductions in work force, masterminded by Mr. Trump’s sidekick, the billionaire disrupter-in-chief, Elon Musk. Just look at The Times’s running tabulation of the actions taken since Jan. 21. It’s dizzying.

Still, so far, at least, the administration has been remarkably circumspect when it comes to the Fed. That doesn’t mean President Trump has entirely constrained himself: He has continued to mock the Fed, saying in a social media post that it has “failed to stop the problem they created with Inflation” and has wasted its time on issues like “DEI, gender ideology, ‘green’ energy, and fake climate change.”

Nonetheless, Mr. Bessent said specifically that Mr. Trump “is not calling for the Fed to lower rates.” Instead, the Treasury secretary said, “If we deregulate the economy, if we get this tax bill done, if we get energy down, then rates will take care of themselves and the dollar will take care of itself.” The president has not contradicted him. So far, trying to control the Fed is a line that Mr. Trump hasn’t yet crossed. The bond market is another matter.

Longer-Term Rates

Treasury rates haven’t usually garnered the big headlines frequently devoted to the Federal Reserve.

The Fed is easier to explain. When it raises or lowers short-term rates, it’s clear that somebody took action and caused a measurable change.

In reality, when we report that the Fed is cutting or increasing rates, we mean that it is shifting its key policy rate, the federal funds rate. That’s what banks charge one another for borrowing and lending money overnight. It’s important as a signal — a red or green light for stock traders — and “it influences other interest rates such as the prime rate, which is the rate banks charge their customers with higher credit ratings,” according to the Federal Reserve Bank of St. Louis. “Additionally, the federal funds rate indirectly influences longer- term interest rates.”

What causes shifts in longer-term rates is much harder to pinpoint because they are set by an amorphous force: the market, with Treasuries at the core. Day to day, you won’t hear much about it unless you’re already a bond maven.

How does any market set prices? Supply and demand, the preferences of buyers and sellers, trading rules — the textbooks say these and other factors determine market prices. That’s true for tangible things like milk, eggs, gasoline, a house or a car. Treasury prices — and those of other bonds, which use Treasuries as a reference — are more complicated. They include estimates of the future of interest rates, of inflation and of the Fed’s intentions.

The Fed sets overnight rates, which are involved indirectly in bond rates for a simple reason. The interest rate for a 10-year Treasury reflects assumptions about many, many days of overnight rates, chained together until they span the life of whatever bond you buy. Inflation matters because when it rises more quickly than anticipated, it will reduce the real value of the stream of income you receive from standard bonds.

That happened in 2022. Inflation soared and so did yields, while bond prices, which move in the opposite direction, fell — creating losses for bond funds and for individual bonds sold under those conditions.

That’s why the increase in inflation in January, to an annual rate of 3 percent for the Consumer Price Index from 2.9 percent the previous month, immediately pushed up the 10-year Treasury yield, which stands above 4.5 percent. Trump administration policies are weighing on bond prices and yields, too.

Mr. Bessent has pointed out that oil prices are a major ingredient in inflation and, therefore, bond yields. But whether Mr. Trump will be able to bring down oil prices by encouraging drilling — while eliminating subsidies and regulations that encourage the development of energy alternatives — is open to question.

Some Trump policies being sold as promoters of economic growth — like cutting regulations and tax rates — could have that effect. But others, like reducing the size of the labor force — which his deportations of undocumented immigrants and restrictions on the arrival of new immigrants will do — could slow growth and increase inflation.

So could the tariffs that he has been threatening, delaying and, in some cases, already imposing. Expectations for future inflation jumped in the University of Michigan’s monthly survey in January. Joanne Hsu, the survey’s director, said that reflects growing concerns about the Trump tariffs among consumers.

“These consumers generally report that tariff hikes will pass through to consumers in the form of higher prices,” she wrote. She added that “recent data show an emergence of inflationary psychology — motives for buying-in-advance to avoid future price increases, the proliferation of which would generate further momentum for inflation.”

None of that augurs well for the 10-year Treasury yield. Nor does a warning issued by five former Treasury secretaries — Robert E. Rubin, Lawrence H. Summers, Timothy F. Geithner, Jacob J. Lew and Janet L. Yellen — who served in Democratic administrations.

They wrote in The New York Times that incursions of Mr. Musk’s cost-cutting team into the Treasury’s payment system threaten the country’s “commitment to make good on our financial obligations.” They applauded Mr. Bessent for assuring Congress in writing that the Treasury will safeguard the “integrity and security of the system, given the implications of any compromise or disruption to the U.S. economy.”

But they decried the need for any Treasury secretary to have to make such promises in his first weeks in office.

Other potential flash points for Treasury yields loom. The Fed has in the past manipulated the market bond supply by buying and selling securities. It’s reducing its holding now, which could put upward pressure on interest rates — and make the Fed an irresistible Trump target. At the same time, Secretary Bessent is financing the government debt mainly with shorter-term bills but may not be able to avoid increasing the supply of longer-term Treasuries indefinitely, as the federal deficit swells. Yet Congress is reluctant to raise the debt ceiling, which will bite later this year.

These are difficult times. So far, the 10-year yield hasn’t shifted all that much. The markets, at least, have been holding steady.

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Business

Podcast industry is divided as AI bots flood the airways with thousands of programs

Published

7 hours ago

December 12, 2025

Press Room

Podcast industry is divided as AI bots flood the airways with thousands of programs

Chatty bots are sharing their hot takes through hundreds of thousands of AI-generated podcasts. And the invasion has just begun.

Though their banter can be a bit banal, the AI podcasters’ confidence and research are now arguably better than most people’s.

“We’ve just begun to cross the threshold of voice AI being pretty much indistinguishable from human,” said Alan Cowen, chief executive of Hume AI, a startup specializing in voice technology. “We’re seeing creators use it in all kinds of ways.”

AI can make podcasts sound better and cost less, industry insiders say, but the growing swarm of new competitors entering an already crowded market is disrupting the industry.

Some podcasters are pushing back, requesting restrictions. Others are already cloning their voices and handing over their podcasts to AI bots.

Popular podcast host Steven Bartlett has used an AI clone to launch a new kind of content aimed at the 13 million followers of his podcast “Diary of a CEO.” On YouTube, his clone narrates “100 CEOs With Steven Bartlett,” which adds AI-generated animation to Bartlett’s cloned voice to tell the life stories of entrepreneurs such as Steve Jobs and Richard Branson.

Erica Mandy, the Redondo Beach-based host of the daily news podcast called “The Newsworthy,” let an AI voice fill in for her earlier this year after she lost her voice from laryngitis and her backup host bailed out.

She fed her script into a text-to-speech model and selected a female AI voice from ElevenLabs to speak for her.

“I still recorded the show with my very hoarse voice, but then put the AI voice over that, telling the audience from the very beginning, I’m sick,” Mandy said.

Mandy had previously used ElevenLabs for its voice isolation feature, which uses AI to remove ambient noise from interviews.

Her chatbot host elicited mixed responses from listeners. Some asked if she was OK. One fan said she should never do it again. Most weren’t sure what to think.

“A lot of people were like, ‘That was weird,’” Mandy said.

In podcasting, many listeners feel strong bonds to hosts they listen to regularly. The slow encroachment of AI voices for one-off episodes, canned ad reads, sentence replacement in postproduction or translation into multiple languages has sparked anger as well as curiosity from both creators and consumers of the content.

Augmenting or replacing host reads with AI is perceived by many as a breach of trust and as trivializing the human connection listeners have with hosts, said Megan Lazovick, vice president of Edison Research, a podcast research company.

Jason ⁠Saldanha of PRX, a podcast network that represents human creators such as Ezra Klein, said the tsunami of AI podcasts won’t attract premium ad rates.

“Adding more podcasts in a tyranny of choice environment is not great,” he said. “I’m not interested in devaluing premium.”

Still, platforms such as YouTube and Spotify have introduced features for creators to clone their voice and translate their content into multiple languages to increase reach and revenue. A new generation of voice cloning companies, many with operations in California, offers better emotion, tone, pacing and overall voice quality.

Hume AI, which is based in New York but has a big research team in California, raised $50 million last year and has tens of thousands of creators using its software to generate audiobooks, podcasts, films, voice-overs for videos and dialogue generation in video games.

“We focus our platform on being able to edit content so that you can take in postproduction an existing podcast and regenerate a sentence in the same voice, with the same prosody or emotional intonation using instant cloning,” said company CEO Cowen.

Some are using the tech to carpet-bomb the market with content.

Los Angeles podcasting studio Inception Point AI has produced its 200,000 podcast episodes, accounting for 1% of all podcasts published on the internet, according to CEO Jeanine Wright.

The podcasts are so cheap to make that they can focus on tiny topics, like local weather, small sports teams, gardening and other niche subjects.

Instead of a studio searching for a specific “hit” podcast idea, it takes just $1 to produce an episode so that they can be profitable with just 25 people listening.

“That means most of the stuff that we make, we have really an unlimited amount of experimentation and creative freedom for what we want to do,” Wright said.

One of its popular synthetic hosts is Vivian Steele, an AI celebrity gossip columnist with a sassy voice and a sharp tongue. “I am indeed AI-powered — which means I’ve got receipts older than your grandmother’s jewelry box, and a memory sharper than a stiletto heel on marble. No forgetting, no forgiving, and definitely no filter,” the AI discloses itself at the start of the podcast.

“We’ve kind of molded her more towards what the audience wants,” said Katie Brown, chief content officer at Inception Point, who helps design the personalities of the AI podcasters.

Inception Point has built a roster of more than 100 AI personalities whose characteristics, voices and likenesses are crafted for podcast audiences. Its AI hosts include Clare Delish, a cooking guidance expert, and garden enthusiast Nigel Thistledown.

The technology also makes it easy to get podcasts up quickly. Inception has found some success with flash biographies posted promptly in connection to people in the news. It uses AI software to spot a trending personality and create two episodes, complete with promo art and a trailer.

When Charlie Kirk was shot, its AI immediately created two shows called “Charlie Kirk Death” and “Charlie Kirk Manhunt” as a part of the biography series.

“We were able to create all of that content, each with different angles, pulling from different news sources, and we were able to get that content up within an hour,” Wright said.

Speed is key when it comes to breaking news, so its AI podcasts reached the top of some charts.

“Our content was coming up, really dominating the list of what people were searching for,” she said.

Across Apple and Spotify, Inception Point podcasts have now garnered 400,000 subscribers.

Business

L.A. County sues oil companies over unplugged oil wells in Inglewood

Published

19 hours ago

December 11, 2025

Press Room

L.A. County sues oil companies over unplugged oil wells in Inglewood

Los Angeles County is suing four oil and gas companies for allegedly failing to plug idle oil wells in the large Inglewood Oil Field near Baldwin Hills.

The lawsuit filed Wednesday in Los Angeles Superior Court charges Sentinel Peak Resources California, Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. with failing to properly clean up at least 227 idle and exhausted wells in the oil field. The wells “continue to leak toxic pollutants into the air, land, and water and present unacceptable dangers to human health, safety, and the environment,” the complaint says.

The lawsuit aims to force the operators to address dangers posed by the unplugged wells. More than a million people live within five miles of the Inglewood oil field.

“We are making it clear to these oil companies that Los Angeles County is done waiting and that we remain unwavering in our commitment to protect residents from the harmful impacts of oil drilling,” said Supervisor Holly Mitchell, whose district includes the oil field, in a statement. “Plugging idle oil and gas wells — so they no longer emit toxins into communities that have been on the front lines of environmental injustice for generations — is not only the right thing to do, it’s the law.”

Sentinel is the oil field’s current operator, while Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. were past operators. Energy companies often temporarily stop pumping from a well and leave it idle waiting for market conditions to improve.

In a statement, a representative for Sentinel Peak said the company is aware of the lawsuit and that the “claims are entirely without merit.”

“This suit appears to be an attempt to generate sensationalized publicity rather than adjudicate a legitimate legal matter,” general counsel Erin Gleaton said in an email. “We have full confidence in our position, supported by the facts and our record of regulatory compliance.”

Chevron said it does not comment on pending legal matters. The others did not immediately respond to a request for comment.

State regulations define “idle wells” as wells that have not produced oil or natural gas for 24 consecutive months, and “exhausted wells” as those that yield an average daily production of two barrels of oil or less. California is home to thousands of such wells, according to the California Department of Conservation.

Idle and exhausted wells can continue to emit hazardous air pollutants such as benzene, as well as a methane, a planet-warming greenhouse gas. Unplugged wells can also leak oil, benzene, chloride, heavy metals and arsenic into groundwater.

Plugging idle and exhausted wells includes removing surface valves and piping, pumping large amounts of cement down the hole and reclaiming the surrounding ground. The process can be expensive, averaging an estimated $923,200 per well in Los Angeles County, according to the California Geologic Energy Management Division, which notes that the costs could fall to taxpayers if the defendants do not take action. This 2023 estimate from CalGEM is about three times higher than other parts of the state due to the complexity of sealing wells and remediating the surface in densely populated urban areas.

The suit seeks a court order requiring the wells to be properly plugged, as well as abatement for the harms caused by their pollution. It seeks civil penalties of up to $2,500 per day for each well that is in violation of the law.

Residents living near oil fields have long reported adverse health impacts such as respiratory, reproductive and cardiovascular issues. In Los Angeles, many of these risks disproportionately affect low-income communities and communities of color.

“The goal of this lawsuit is to force these oil companies to clean up their mess and stop business practices that disproportionately impact people of color living near these oil wells,” County Counsel Dawyn Harrison said in a statement. “My office is determined to achieve environmental justice for communities impacted by these oil wells and to prevent taxpayers from being stuck with a huge cleanup bill.”

The lawsuit is part of L.A. County’s larger effort to phase out oil drilling, including a high-profile ordinance that sought to ban new oil wells and even require existing ones to stop production within 20 years. Oil companies successfully challenged it and it was blocked in 2024.

Rita Kampalath, the county’s chief sustainability officer, said the county remains “dedicated to moving toward a fossil fuel-free L.A. County.”

“This lawsuit demonstrates the County’s commitment to realizing our sustainability goals by addressing the impacts of the fossil fuel industry on front line communities and the environment,” Kampalath said.

Business

Instacart is charging different prices to different customers in a dangerous AI experiment, report says

Published

1 day ago

December 11, 2025

Press Room

Instacart is charging different prices to different customers in a dangerous AI experiment, report says

The grocery delivery service Instacart is using artificial intelligence to experiment with prices and charge some shoppers more than others for the same items, a new study found.

The study from nonprofits Groundwork Collaborative and Consumer Reports followed more than 400 shoppers in four cities and found that Instacart sometimes offered as many as five different sales prices for the exact same item, at the same store and on the same day.

The average difference between the highest price and lowest price on the same item was 13%, but some participants in the study saw prices that were 23% higher than those offered to other shoppers.

The varying prices are unfair to consumers and exacerbate a grocery affordability crisis that regular Americans are already struggling to cope with, said Lindsey Owens, executive director of Groundwork Collaborative.

“In my own view, Instacart should close the lab,” Owens said. “American grocery shoppers aren’t guinea pigs, and they should be able to expect a fair price when they’re shopping.”

The study found that an individual shopper on Instacart could theoretically spend as much as $1,200 more on groceries in one year if they had to deal with the kind of price differences observed in the pricing experiments.

At a Safeway supermarket in Washington, D.C., a dozen Lucerne eggs sold for $3.99, $4.28, $4.59, $4.69, and $4.79 on Instacart, depending on the shopper, the study showed.

At a Safeway in Seattle, a box of 10 Clif Chocolate Chip Energy bars sold for $19.43, $19.99, and $21.99 on Instacart.

Instacart likely began experimenting with prices in 2022, when the platform acquired the artificial intelligence company Eversight. Instacart now advertises Eversight’s pricing software to its retail partners, claiming that the price experimentation is negligible to consumers but could increase store revenue by up to 3%.

“These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable,” an Instacart spokesperson said in a statement to The Times. “The tests are never based on personal or behavioral characteristics.”

Instacart said the price changes are not the result of dynamic pricing, like that used for airline tickets and ride-hailing, because the prices never change in real time.

But the Groundwork Collaborative study found that nearly three-quarters of grocery items bought at the same time and from the same store had varying price tags.

The artificial intelligence software helps Instacart and grocers “determine exactly how much you’re willing to pay, adding up to a lot more profits for them and a much higher annual grocery bill for you,” Owens said.

The study focused on 437 shoppers in-store and online in North Canton, Ohio; Saint Paul, Minn.; Washington, D.C., and Seattle.

Instacart shares were down more than 5% in midday trading on Wednesday and have risen 1% this year.