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Markets are near-certain of a September rate cut as more presidents turn dovish

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For the majority of 2025, analysts and investors have begrudgingly backed the stance of Jerome Powell and the Federal Open Market Committee (FOMC). Looking at the same economic data as the Fed, they have thus far drawn the conclusion that it hasn’t been time to cut.

Until now—or more specifically, until Friday.

Late last week’s bombshell jobs report from the Bureau of Labor Statistics threw the dual mandate of the Fed (inflation at 2% and maximum employment) into sharp focus. The labor market is doing considerably worst than previously realized, to the tune of 258,000 jobs stripped from earlier estimates and unemployment pushing up to 4.2%.

With two members of the FOMC having dissented from the decision to keep the rate at the current level of 4.25% to 4.5%, more regional bank presidents are now suggesting a change of tune.

Neel Kashkari, president of the Minneapolis Fed, is generally seen as a hawkish member of the Fed but said in an interview yesterday it may now be time to cut: “There’s two categories of data that I’m focussed on: There’s a bunch of data that I know and that I’ve got confidence in, and there’s data that I don’t know and we’re not going to know for a while.

“The data that I think we know is that the economy is slowing … and that means in the near term it may become appropriate to start adjusting the federal funds rate.”

He was echoed by San Francisco Fed president Mary Daly, who told the Anchorage Economic Summit yesterday in prepared remarks: “My own assessment is that the risks to our employment and inflation goals are roughly balanced. Inflation, absent tariffs, has been gradually trending down, and with a slowing economy and ongoing restrictive monetary policy, should continue to do so. Tariffs will boost inflation in the near term, but likely not in a persistent way that monetary policy would need to offset.

“At the same time, the labor market has softened. And I would see additional slowing as unwelcome, especially since we know that once the labor market stumbles, it tends to fall quickly and hard. All this means that we will likely need to adjust policy in the coming months.”

Meanwhile Federal Reserve Governor Lisa Cook told a Boston Fed event the jobs report “concerning”, adding “these revisions are somewhat typical of turning points.”

More importantly, neither Presidents Kashkari or Daly—or Governor Cook—were among the dissenters a the July meeting. With Governor Chris Waller and FOMC member Michelle Bowman already lobbying for a cut, the ranks of those on the dovish end of the spectrum are growing by the day.

“Pricing of a September Fed rate cut ticked up from 90% to 95% amid the shifting rhetoric, with 60bps of cuts priced by the December meeting (+2.0bps on the day),” noted Deutsche Bank’s Jim Reid to clients on Thursday morning.

While 2-year treasuries bumped slightly on the news, yields are still moving higher in the long term with 10-year up to 4.24% and 30-year up to 4.8%.

Per the FedWatch tool from derivatives platform CME Group, 93.4% of the market is expecting the base rate to go down to 4% to 4.25% in September—down one click on the current rate. Only 6.6% of investors expect a further hold.

Goldman Sachs did have a potential counter to this seemingly foregone conclusion. Chief U.S. economist Jan Hatzius, wrote earlier this week his call is three consecutive cuts of 25 points in September, October, and December (followed by two more 25bp cuts in 2026H1), but cautioned: “A delay is possible if upcoming reports show bigger-than-expected price hikes and a rebound in the labor market.

“But a 50bp cut in September is also possible if the unemployment rate rises again in the August employment report or initial jobless claims increase from their still-low level. Even after Friday’s front-end rally, our funds rate forecast remains below market pricing, especially on a probability-weighted basis.”

Could have been two

Had the Fed learned of he “bombshell” jobs report in real time, Professor Jeremy Siegel believes the Fed would have not only cut this month, but by two clicks.

The emeritus professor of finance at The Wharton School of the University of Pennsylvania wrote in a column for WisdomTree, where he is senior economist, that the Fed may have even been tempted to lower by 50bps.

“My view following Chair Powell’s press conference last week was that Powell was too hawkish, even before we knew about Friday’s data,” Professor Siegel wrote. “I expect the first 25 basis point rate cut at the September 18th FOMC meeting, followed by identical moves in November and December, taking the fed funds rate to 3.58% by year‑end.

“A slower cadence, a “firm but flexible glide‑path”, keeps the committee’s hawks on board while acknowledging that real activity is cooling; first‑half real GDP averaged only 1.2% at an annual rate, and forward indicators such as continuing claims are inching higher.”

Professor Siegel, like many other economists, are looking to the Jackson Hole Symposium later this year for hints of an about-turn on monetary policy.

But even then, Professor Siegel—like some other notable economists—still believe Fed chairman Jerome Powell should step down before his term is up.

“The Fed’s independence has long been one of the cornerstones of a well-functioning U.S. economy,” Siegel noted last month. “But in today’s politically charged environment, that very independence could face a greater threat if Powell remains in place and the economy falters in the second half of the year … If growth slows and Powell hasn’t moved aggressively enough on rate cuts, Powell will become the scapegoat.

“In that case, a Republican-led Congress, already skeptical of the central bank, could impose serious structural restrictions, including changes to the Fed’s governing mandate or the president’s power to remove the Chair. We must remember: the Fed is a creature of Congress. It has no constitutional status, and its rules can be rewritten.”



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Mark Zuckerberg says the ‘most important thing’ he built at Harvard was a prank website

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For Mark Zuckerberg, the most significant creation from his two years at Harvard University wasn’t the precursor to a global social network, but a prank website that nearly got him expelled.

The Meta CEO said in a 2017 commencement address at his alma mater that the controversial site, Facemash, was “the most important thing I built in my time here” for one simple reason: it led him to his wife, Priscilla Chan.

“Without Facemash I wouldn’t have met Priscilla, and she’s the most important person in my life,” Zuckerberg said during the speech.

In 2003, Zuckerberg, then a sophomore, created Facemash by hacking into Harvard’s online student directories and using the photos to create a site where users could rank students’ attractiveness. The site went viral, but it was quickly shut down by the university. Zuckerberg was called before Harvard’s Administrative Board, facing accusations of breaching security, violating copyrights, and infringing on individual privacy.

“Everyone thought I was going to get kicked out,” Zuckerberg recalled in his speech. “My parents came to help me pack. My friends threw me a going-away party.”

It was at this party, thrown by friends who believed his expulsion was imminent, where he met Chan, another Harvard undergraduate. “We met in line for the bathroom in the Pfoho Belltower, and in what must be one of the all time romantic lines, I said: ‘I’m going to get kicked out in three days, so we need to go on a date quickly,’” Zuckerberg said.

Chan, who described her now-husband to The New Yorker as “this nerdy guy who was just a little bit out there,” went on the date with him. Zuckerberg did not get expelled from Harvard after all, but he did famously drop out the following year to focus on building Facebook.

While the 2010 film The Social Network portrayed Facemash as a critical stepping stone to the creation of Facebook, Zuckerberg himself has downplayed its technical or conceptual importance.

“And, you know, that movie made it seem like Facemash was so important to creating Facebook. It wasn’t,” he said during his commencement speech. But he did confirm that the series of events it set in motion—the administrative hearing, the “going-away” party, the line for the bathroom—ultimately connected him with the mother of his three children.

Chan, for her part, went on to graduate from Harvard in 2007, taught science, and then attended medical school at the University of California, San Francisco, becoming a pediatrician.

She and Zuckerberg got married in 2012, and in 2015, they co-founded the Chan Zuckerberg Initiative, a philanthropic organization focused on leveraging technology to address major world challenges in health, education, and science. Chan serves as co-CEO of the initiative, which has pledged to give away 99% of the couple’s shares in Meta Platforms to fund its work.

You can watch the entirety of Zuckerberg’s Harvard commencement speech below:

For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing. 



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of ThronesFriends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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