Finance

The many challenges facing Jay Powell as he tries to pull off a soft landing

Published

1 year ago

September 20, 2024

The many challenges facing Jay Powell as he tries to pull off a soft landing

Jay Powell argued this week that the Fed is not “behind” as it starts a cycle of interest rate cuts.

His main challenge in the coming months is to keep that narrative intact if the job market keeps cooling and the economy deteriorates.

“We don’t think we’re behind,” the Federal Reserve chairman said during a Wednesday press conference following a decision to cut rates for the first time since 2020. “We think this is timely, but I think you can take this as a sign of our commitment not to get behind.”

Some on Wall Street still have their doubts, arguing the jumbo 50 basis point move announced this week is an attempt to play catch up and that the path ahead for rate cuts may be too shallow.

Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington, Wednesday, Sept. 18, 2024. (AP Photo/Ben Curtis) — Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington on Wednesday. (AP Photo/Ben Curtis) (ASSOCIATED PRESS)

The central bank is being “reactionary” instead of proactive, said EY Chief Economist Gregory Daco, who pointed to the fact that Powell acknowledged the Fed might have cut rates in July if its policymakers had seen July’s employment figures first.

Those figures, released just two days after the Fed’s July 31 meeting, showed that the unemployment rate had risen to 4.3%, stoking concerns the Fed had waited too long.

The rate dropped to 4.2% in August, but another rise in the coming months could bring those same fears back.

“It’s essential for Fed policymakers to adopt a robust forward-looking framework and abandon data dependency,” Daco said. “Unfortunately, that’s not the case so far.”

There remain “real risks” that a soft landing for the US economy may not be achieved especially if the labor market deteriorates, Nationwide chief economist Kathy Bostjancic told Yahoo Finance Thursday.

“Chair Powell is trying to get ahead of that…but there is always the risk they have been a little too slow in doing this.”

Fed officials this week predicted the unemployment rate would tick up to 4.4% this year and hold at that level through next year.

Another hurdle for Powell is that Wall Street expects more future cuts than predicted by central bank policymakers, who this week estimated two more smaller cuts of 25 basis points through the rest of 2024 followed by four smaller cuts in 2025.

One Wall Street firm that came out with a more aggressive forecast was BofA Global Research, which raised its call for rate cuts during the remainder of this year to 75 basis points.

JPMorgan Chase chief economist Michael Feroli also said he is still expecting a faster pace of rate cuts than the Fed consensus.

Feroli expects a 50 basis point cut at the next meeting in early November contingent on further softening in the two jobs reports between now and then.

Luke Tilley, chief economist for Wilmington Trust, said the Fed’s predicted path is too slow for an economy where the job market has normalized and inflation is likely to reach the Fed’s 2% target in the first quarter of 2025.

Tilley thus expects 200 basis points of cuts next year — double the Fed’s projection — and for rates to come down to neutral – the level that neither boosts nor slows growth — by next fall.

“It’s the longer-term path that matters more, and here the Fed is still a bit behind in that the median expectation is for just 100 bps of cuts next year,” he said.

Signs of division

But the Fed expects the economy to continue to show strength, aligning with their shallower rate cut predictions. Officials see the economy expanding at 2% this year, roughly inline with the 2.1% previously forecast, and coasting at that level the next few years.

And the goal is to preserve that economic growth without re-stoking inflation. Officials predict inflation will end the year at 2.6%, down from 2.8% previously, before falling to 2.2% next year.

No matter what happens, Powell will also have to manage signs of internal division over the path ahead.

The Fed’s rate-setting committee is almost evenly split on the number of additional rate cuts expected this year, with seven policymakers favoring one additional 25 basis point rate cut before year end and nine members favoring 50 basis points of additional easing.

Two policymakers expect no more rate cuts.

That path implies several officials could have supported a 25 basis point cut this week but decided to err on the side of caution and not regret further deterioration in the job market.

Fed governor Michelle Bowman even voted against the 50 basis point cut, arguing instead for a smaller quarter point cut. Her dissent was the first for the Fed since 2005.

“The Fed chair is now seen to have significant influence over the FOMC as he managed to convince most officials that front-loading cuts was optimal,” said EY’s economist Daco.

“The bargain is probably that policymakers may be more resistant to rapid easing at the next two policy meetings.”

Bostjancic, the chief economist at Nationwide, said she believes the Fed should cut another 50 basis points at its next meeting in November, even though that is not her firm’s forecast.

But to cut by another 50 “you would really have to have consensus” among Fed officials. “It’s a hurdle and you would have to have broad agreement.”

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Finance

Reservists’ families protest outside Finance Minister’s home

Published

8 hours ago

December 13, 2025

Press Room

Reservists’ families protest outside Finance Minister’s home

Dozens of protesters from the “Religious Zionist Reservists Forum” and the “Shared Service Forum” demonstrated Saturday evening outside the home of Finance Minister Bezalel Smotrich in Kedumim.

The protesters arrived with a direct and pointed message, centered on a symbolic “draft order,” calling on Smotrich to “enlist” on behalf of the State of Israel and oppose what they termed the “sham law” being advanced by MK Boaz Bismuth and the Knesset’s haredi parties.

Among the protesters in Kedumim were the parents of Sergeant First Class (res.) Amichai Oster, who fell in battle in Gaza. Amichai grew up in Karnei Shomron and studied at the Shavei Hevron yeshiva.

Protesters held signs reading: “Smotrich, enlist for us,” along with the symbolic “draft order,” calling on him to “enlist for the sake of the State’s security and to save the people’s army – stand against the bill proposed by Bismuth and the haredim!”

Parallel demonstrations were held outside the homes of MK Ohad Tal in Efrat and MK Michal Woldiger in Givat Shmuel.

Representatives of the “Shared Service Forum” said: “We are members of the public that contributes the most, and we came here to say: Bezalel, without enlistment there will be no victory and no security. Do not abandon our values for the sake of the coalition. The exemption law is a strategic threat, and you bear the responsibility to stop it and lead a real, fair draft plan for a country in which we are all partners. It’s in your hands.”

Finance

Banking on carbon markets 2.0: why financial institutions should engage with carbon credits | Fortune

Published

20 hours ago

December 13, 2025

Press Room

Banking on carbon markets 2.0: why financial institutions should engage with carbon credits | Fortune

The global carbon market is at an inflection point as discussions during the recent COP meeting in Brazil demonstrated.

After years of negotiations over carbon market rules under Article 6 of the Paris Agreement, countries are finally moving on to the implementation phase, with more than 30 countries already developing Article 6 strategies. At the same time, the voluntary market is evolving after a period of intense scrutiny over the quality and integrity of carbon credit projects.

The era of Carbon Markets 2.0 is characterised by high integrity standards and is increasingly recognised as critical to meeting the emission reduction goals of the Paris Agreement.

And this ongoing transition presents enormous opportunities for financial institutions to apply their expertise to professionalise the trade of carbon credits and restore confidence in the market.

The engagement of banks, insurance companies, asset managers and others can ensure that carbon markets evolve with the same discipline, risk management, and transparency that define mature financial systems while benefitting from new business opportunities.

Carbon markets 2.0

Carbon markets are an untapped opportunity to deliver climate action at speed and scale. Based on solutions available now, they allow industries to take action on emissions for which there is currently no or limited solution, complementing their decarbonization programs and closing the gap between the net zero we need to achieve and the net zero that is possible now. They also generate debt-free climate finance for emerging and developing economies to support climate-positive growth – all of which is essential for the global transition to net zero.

Despite recent slowdowns in carbon markets, the volume of credit retirements, representing delivered, verifiable climate action, was higher in the first half of 2025 than in any prior first half-year on record. Corporate climate commitments are increasing, driving significant demand for carbon credits to help bridge the gap on the path to meeting net-zero goals.

According to recent market research from the Voluntary Carbon Markets Integrity initiative (VCMI), businesses are now looking for three core qualities in the market to further rebuild their trust: stability, consistency, and transparency – supported by robust infrastructure. These elements are vital to restoring investor confidence and enabling interoperability across markets.

MSCI estimates that the global carbon credit market could grow from $1.4 billion in 2024 to up to $35 billion by 2030 and between $40 billion and $250 billion by 2050. Achieving such growth will rely on institutions equipped with capital, analytical rigour, risk frameworks, and market infrastructure.

Carbon Markets 2.0 will both benefit from and rely on the participation of financial institutions. Now is the time for them to engage, support the growth and professionalism of this nascent market, and, in doing so, benefit from new business opportunities.

The opportunity

Institutional capital has a unique role to play in shaping the carbon market as it grows. Financial institutions can go beyond investing or lending to high-quality projects by helping build the infrastructure that will enable growth at scale. This includes insurance, aggregation platforms, verification services, market-making capacity, and long-term investment vehicles.

By applying their expertise and understanding of the data and infrastructure required for a functioning, transparent market, financial institutions can help accelerate the integration of carbon credits into the global financial architecture.

As global efforts to decarbonise intensify, high-integrity carbon markets offer financial institutions a pathway to deliver tangible climate impact, support broader social and nature-positive goals, and unlock new sources of revenue, such as:

Leveraging core competencies for market growth, including advisory, lending, project finance, asset management, trading, market access, and risk management solutions.
Unlocking new commercial pathways and portfolio diversification beyond existing business models, supporting long-term growth, and facilitating entry into emerging decarbonisation-driven markets.
Securing first-mover advantage, helping to shape norms, gain market share, and capture opportunities across advisory, structuring, and product innovation.
Deepening client engagement by helping clients navigate carbon markets to add strategic value and strengthen long-term relationships.

Harnessing the opportunity

To make the most of these opportunities, financial institutions should consider engagements in high-integrity carbon markets to signal confidence and foster market stability. Visible participation, such as integrating high-quality carbon credits into institutional climate strategies, can help normalise the voluntary use of carbon credits alongside decarbonisation efforts and demonstrate leadership in climate-aligned financial practices.

Financial institutions can also deliver solutions that reduce market risk and improve project bankability. For instance, de-risking mechanisms like carbon credit insurance can mitigate performance, political, and delivery risks, addressing one of the core challenges holding back investments in carbon projects.

Additionally, diversified funding structures, including blended finance and concessional capital, can lower the cost of capital and de-risk early-stage startups. Fixed-price offtake agreements with investment-grade buyers and the use of project aggregation platforms can improve cash flow predictability and risk distribution, further enhancing bankability.

By structuring investments into carbon project developers, funds, or the broader market ecosystem, financial institutions can unlock much-needed finance and create an investable pathway for nature and carbon solutions.

For instance, earlier this year JPMorgan Chase struck a long-term offtake agreement for carbon credits tied to CO₂ capture, blending its roles as investor and market facilitator. Standard Chartered is also set to sell jurisdictional forest credits on behalf of the Brazilian state of Acre, while embedding transparency, local consultation, and benefit-sharing into the deal. These examples offer promising precedents in demonstrating that institutions can act not only as financiers but as integrators of high-integrity carbon markets.

The institutions that lead the growth of carbon markets will not only drive climate and nature outcomes but also unlock strategic commercial advantages in an emerging and rapidly evolving asset class.

However, the window to secure first-mover advantage is narrow: carbon markets are now shifting from speculation to implementation. Now is the moment for financial institutions to move from the sidelines and into leadership, helping shape the future of high-integrity carbon markets while capturing the opportunities they offer.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Finance

Plano-Based Finance of America Announces $2.5B Partnership with Funds Managed by Blue Owl to Expand FOA’s Home Equity Lending

Published

1 day ago

December 12, 2025

Press Room

Plano-Based Finance of America Announces .5B Partnership with Funds Managed by Blue Owl to Expand FOA’s Home Equity Lending

Graham Fleming, CEO of Finance of America [Composite image; source: Finance of America/DI Studio]

Finance of America Companies, a leading provider of home equity-based financing solutions for a modern retirement, and funds managed by Blue Owl Capital, a leading alternative asset manager, announced an enhanced $2.5 billion strategic partnership to accelerate product innovation and distribution for the nation’s fast-growing retirement demographic.

With more than 10,000 Americans entering retirement age every day, the market for home equity access continues to expand. FOA said its collaboration with New York City-based Blue Owl positions it to capture significant share in this rapidly evolving sector.

“This is a pivotal moment not just for Finance of America, but for the senior finance market as a whole,” Graham Fleming, CEO of Finance of America, said in a statement. “By aligning with Blue Owl, we are creating a platform of scale and innovation to better serve one of the fastest-growing demographics in the United States.”

The enhanced partnership includes, per FOA:

$2.5 billion commitment for new product innovation, providing scale and liquidity to support origination growth across multiple asset classes
$50 million equity investment in Finance of America, enhancing long-term alignment between the companies and supporting FOA’s continued growth initiatives
Joint innovation and product-development initiative focused on the continuous rollout of new, differentiated financial products tailored for people looking to maximize freedom, security, and opportunity throughout their retirement

This product expansion will complement FOA’s existing industry-leading reverse mortgage product suite while strengthening the company’s commitment to innovation and its role as a leader in delivering powerful financial solutions for retirees.

FOA said it continues to empower retirees with responsible, flexible access to capital to support aging in place, healthcare expenses, and lifestyle goals.

The partnership reinforces Finance of America’s mission to provide comprehensive, retirement-focused financial solutions, with the goal of expanding beyond reverse mortgages to become the nation’s leading, full-spectrum home equity lending platform, the company said.

“We believe Finance of America is uniquely positioned to redefine how financial products are delivered to retirees,” said David Aidi, senior managing director and co-head of Asset Based Finance at Blue Owl.

“This partnership provides the capital, the strategic alignment, and the innovation engine to build category-defining products at scale,” added Ray Chan, senior managing director and co-head of Asset Based Finance at Blue Owl.