Finance

Trump Victory Boosts Household Financial Outlook to Peak Not Seen Since February 2020, According to NY Fed Survey

Optimism regarding household finances reached a multi-year high following Donald Trump’s presidential election win in November, according to a New York Federal Reserve survey released on Monday.

The percentage of households expecting their financial situation to improve over the next year rose to 37.6%, an increase of around 8 percentage points from October. This marked the highest level since February 2020, just before the onset of the COVID-19 pandemic.

In tandem with this surge in optimism, the share of households anticipating their financial situation will worsen dropped to 20.7%, nearly 2 percentage points lower than the previous month and the lowest since May 2021.

These findings come in the wake of Trump’s victory on November 5, which will return him to the White House for a second, nonconsecutive term. The Republican has promised tax cuts and deregulation aimed at stimulating economic growth.

Despite solid overall economic growth through 2024, consumers are still grappling with rising prices, which have led to a cumulative increase of more than 20% in the consumer price index under President Joe Biden.

While sentiment has improved, the New York Fed survey indicates that consumers remain cautious about inflation. Inflation expectations for the one-, three-, and five-year horizons all increased by 0.1 percentage point, rising to 3%, 2.6%, and 2.9%, respectively. The Federal Reserve targets 2% inflation but is expected to reduce its benchmark interest rate by a quarter percentage point in its meeting next week.

Although Trump has not made significant remarks about addressing the government's debt and deficit, expectations surrounding government debt have also improved. The median forecast for government debt growth decreased to 6.2%, down 2.3 percentage points from October and the lowest since February 2020.

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TECH

Why the Hottest Tech Jobs Could Be Found in the Banking Industry

Working in a bank’s technology department is starting to rival a job at Google in terms of appeal.

While the tech talent market is more measured than it was a few years ago, major banks are still aggressively hiring. Professionals are increasingly drawn to the sector, where they can file patents and collaborate with researchers from prestigious academic institutions.

Job stability and the prestige of working for a company like JPMorgan Chase are also significant perks.

At recruitment events, students are flocking in record numbers, according to Christine Tu, a distinguished engineer at Morgan Stanley and head of artificial intelligence and machine learning within its wealth management technology division. This wasn’t the case just a few years ago, she notes.

Tu attributes this surge in interest partly to the sector's success in highlighting its work in AI and technology. Morgan Stanley, for instance, has frequently highlighted its early collaboration with OpenAI.

CRYPTO

Crypto Insiders Fuel Political Storm Over 'Debanking' Controversy

Early last year, Ryne Saxe began receiving requests from banks that partnered with his San Francisco-based startup, Eco. The banks outlined a series of new compliance and reporting requirements that Eco had to adhere to.

The issue? Eco was a cryptocurrency company, part of an industry under intense regulatory scrutiny. The banks explained they were facing pressure from government agencies to comply with new guidelines for crypto clients. Soon after, Bill.com, Eco’s payroll provider, canceled the company's account, citing a newly implemented policy, according to Mr. Saxe.

After months of mounting pressure, Mr. Saxe decided to shut down Eco’s app and revise his business model to operate without relying on bank partnerships. Eventually, his Bill.com account was reinstated.