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Here’s what the federal government does for you

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Here’s what the federal government does for you

As pandemonium descended Tuesday after the Trump administration directed a freeze on federal funding, the chaos drove home a salient point: The federal government does a lot for you.

The administration targeted 2,623 federal programs for review in circulated instructions, ordering agencies to “temporarily pause all activities related to…all Federal financial assistance.” Funding for programs that provide health insurance, childcare, food assistance, housing aid, and much, much more remained uncertain.

Disrupting the federal government plumbing is a delicate process that, if done crudely, could hit vital lifelines for the American people. You simply can’t turn off the water — even temporarily.

“The government is involved in things that people don’t feel all the time, a lot of things we take for granted like safe drinking water,” said Bobby Kogan, senior director of federal budget policy at the left-leaning think tank Center for American Progress. “Except when it fails miserably.”

People protest against a funding freeze of federal grants and loans following a push from President Donald Trump to pause federal funding near to the White House in Washington, Tuesday, Jan. 28, 2025. (AP Photo/Ben Curtis) · ASSOCIATED PRESS

Few federal programs seemed exempt from the directive that came from the Office of Management and Budget. More than 50 agencies were tasked with conducting reviews during the freeze to make sure their programs complied with the president’s executive orders.

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The ones that sparked the most outrage were programs that help America’s most vulnerable with funding deadlines looming over the next few days, such as Section 8 housing assistance, Medicaid, and the Head Start reimbursement program that gives low-income families money for their children’s education.

They were also some of the payment systems that went down on Tuesday.

“That could have truly harmed people — if you take away people’s nutrition, healthcare, housing, education — things people depend on,” Kogan said.

What may still be in the crosshairs: under-the-radar supports that millions of Americans rely on but may not recognize on a daily basis.

Abraham Lincoln impersonator Fritz Klein, marches with AmeriCorps and Senior Corps members from across Illinois to mark the 20th anniversary of the AmeriCorps national service program, Friday, Sept. 12, 2014, in Springfield, Ill. (AP Photo/Seth Perlman)
Abraham Lincoln impersonator Fritz Klein, marches with AmeriCorps and Senior Corps members from across Illinois to mark the 20th anniversary of the AmeriCorps national service program, Friday, Sept. 12, 2014, in Springfield, Ill. (AP Photo/Seth Perlman) · ASSOCIATED PRESS

There are loans for farm storage, grants to ensure safe drinking water, funding to implement pool and spa safety laws, money for suicide prevention for veterans, and grants for AmeriCorps programs. The beneficiaries of this funding run the gamut: farmers, Native tribes, seniors, people with disabilities, those living in rural areas, children, veterans, and victims of mass violence and acts of terror.

There’s even a grant to Florida to reimburse citrus producers for the costs associated with recovering from the 2017 hurricane destruction.

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What’s the federal government good for? Seems like a lot.

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Finance

Dark side of RBA interest rate cut millions are waiting for: ‘Disaster’

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Dark side of RBA interest rate cut millions are waiting for: ‘Disaster’
Judo Bank economist Warren Hogan has warned an RBA interest rate cut could have dire impacts for mortgage holders. · Source: Yellow Brick Road/AAP

A top economist has warned Australian mortgage holders they could face interest rate hikes later this year should the Reserve Bank of Australia (RBA) cut interest rates today. The central bank is expected to cut the cash rate from its high of 4.35 per cent, marking the first time rates have been lowered in more than four years.

Judo Bank chief economic advisor Warren Hogan told Yahoo Finance it was still too early for the RBA to cut interest rates and the board risked driving up inflation before it was under control. Headline inflation eased to 2.4 per cent annually in December, while underlying inflation slowed to 3.2 per cent annually. This was its lowest in three years.

“It might sound attractive to a lot of Australians with mortgages to get a rate cut or two and save $50 a month in the short-term over the next six months, maybe even 12 months,” Hogan said.

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“But if that puts at risk rates going up by a percentage point or two, and then having to come up with actually not just that $50 back, but then another $100 or $150, do they really want that $50 right now and then putting at risk that it’s going to go up later?”

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Hogan said the economy was recovering, with private sector demand starting to accelerate, strong employment, a jump in job vacancies, low unemployment and strong consumer spending.

“If you cut just as the economy is picking up and before inflation comes down, you risk not only stopping inflation coming down, but inflation going back up again, and then having to raise rates and not just a few times, a lot,” he said.

“That’s the disaster situation that we really must avoid, is rates going up a lot from here.”

Do you have an interest rates story to share? Contact tamika.seeto@yahooinc.com

Hogan said this “disaster situation” could play out very quickly and the RBA could be forced to hike the cash rate to 5 per cent through 2026.

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“What worries me is that a rate cut now lays the foundation for what we know all through history of the disaster, which is that inflation starts to rise again and they’ve got to really jack rates up until it really hurts,” he said.

“Of course, that’s when people who are vulnerable get hurt.”

Hogan said the RBA also risked damaging their credibility if they ended up needing to hike interest rates again to bring down inflation.

“It’s very important for central banks that people believe them when they say they’re going to get inflation down and keep it there,” Hogan said.

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China’s central bank governor says stable yuan key to global financial stability

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China’s central bank governor says stable yuan key to global financial stability

BEIJING (Reuters) – China’s central bank governor said on Sunday a stable yuan currency has been key to global financial and economic stability and Beijing will continue to let the market play a decisive role in deciding the exchange rate.

People’s Bank of China Governor Pan Gongsheng told a conference in Saudi Arabia that while most currencies have fallen against the dollar, the yuan has remained stable.

“Recently, a number of factors have pushed up (the) dollar index, and non-dollar currencies have mostly depreciated. But RMB (yuan) has remained largely stable despite the high market volatility,” Pan said at AlUla Conference for Emerging Market Economies.

He also noted that China was increasingly prioritising consumption, implementing pro-consumption policies such as increasing household income and providing subsidies.

China has emphasised that boosting consumption is a top economic priority in 2025, moving away from an over-reliance on investment to stimulate domestic demand and address potential export challenges.

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Pan also said in his speech that China will adopt a proactive fiscal policy and an accommodative monetary policy, and strengthen counter-cyclical policy adjustments.

(Reporting by Selena Li, Sophie Yu and Ryan Woo; Editing by William Mallard and Jamie Freed)

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DeepSeek Drives $1.3 Trillion China Stock Rally as Funds Pile In

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DeepSeek Drives .3 Trillion China Stock Rally as Funds Pile In

(Bloomberg) — DeepSeek’s breakthrough in artificial intelligence is helping drive a rotation of stock funds back into China from India.

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Hedge funds have been piling into Chinese equities at the fastest pace in months as bullishness on the DeepSeek-driven technology rally adds to hopes for more economic stimulus. In contrast, India is suffering a record exodus of cash on concerns over waning macro growth, slowing corporate earnings and expensive stock valuations.

China’s onshore and offshore equity markets have added more than $1.3 trillion in total value in just the past month amid such reallocations, while India’s market has shrunk by more than $720 billion. The MSCI China Index is on track to outperform its Indian counterpart for a third-straight month, the longest such streak in two years.

DeepSeek has shown “that China actually has companies that are forming a vital part of the whole AI ecosystem,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments. His firm has been adding Chinese internet holdings over the past few months, while trimming smaller Indian stocks that had “run up way past their valuation multiples.”

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The rotation marks an about-face from the pivot into India seen over the past several years, luring funds away from China. That was based on an India’s infrastructure spending splurge and its potential as an alternative manufacturing hub to China. Domestic-focused India has also been seen as a relative haven amid Donald Trump’s tariff plans.

China looks to be regaining its former appeal on a fundamental reevaluation of its investability, especially in tech. After scaring investors with corporate crackdowns not long ago, Beijing may actually help push the new AI theme, as indicated by the news that entrepreneurs including Alibaba Group Holding Ltd. co-founder Jack Ma have been invited to meet the nation’s top leaders.

DeepSeek-related developments are likely to help boost China’s economy as well as its markets, providing an extended boost, said Vivek Dhawan, a fund manager at Candriam. “If you put all the pieces together, China becomes more attractive than India in the current set-up on a risk-reward basis.”

The valuation differential adds to China’s allure as well. The MSCI China Index is trading at just 11 times forward earnings estimates, compared with about 21 times for the MSCI India Index.

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