Economy

The Supreme Court refused to allow a key part of President Biden’s student debt plan to move forward. Here’s what’s left of it, and who could still benefit.President Biden’s latest effort to wipe out student loan debt for millions of Americans is in jeopardy.The Supreme Court on Wednesday refused to allow a key component of the policy, known as the SAVE plan, to move forward after an emergency application by the Biden administration.Until Republican-led states sued to block the plan over the summer, SAVE had been the main way for borrowers to apply for loan forgiveness. The program allowed people to make payments based on income and family size; some borrowers ended up having their remaining debt canceled altogether.Other elements of Mr. Biden’s loan forgiveness plan remain in effect for now. And over the course of Mr. Biden’s presidency, his administration has canceled about $167 billion in loans for 4.75 million people, or roughly one in 10 federal loan holders.But Wednesday’s decision leaves millions of Americans in limbo.Here is a look at what the ruling means for borrowers and what happens next:Who was eligible for SAVE?Most people with federal undergraduate or graduate loans could apply for forgiveness under SAVE, which stands for Saving on a Valuable Education.But the amount of relief it provided varied depending on factors such as income and family size. More than eight million people enrolled in the program during the roughly 10 months that it was available, and about 400,000 of them got some amount of debt canceled.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

SINGAPORE (Reuters) – The dollar steadied on Thursday as it nursed some of its steep losses from previous sessions, with traders looking ahead to a key U.S. inflation reading at the end of the week that could offer further clues on the outlook for rates there.Friday’s release of the core personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred measure of inflation – headlines a week that’s otherwise been lacking on major market moving data, leaving currencies mostly rangebound.Still, the dollar held to its overnight gains in early Asia trade on Thursday, after having risen 0.48% against a basket of major peers in the previous session. Analysts also attributed the rise to month-end demand.The euro was off its 13-month high and last bought $1.1130. Sterling rose 0.08% to $1.3201, but was some distance away from Tuesday’s peak of $1.3269, its strongest level since March 2022.The Australian dollar eased away from an eight-month top and last stood at $0.6793.”PCE is definitely this week’s most important print in the U.S., but I doubt it will materially move market expectations for FOMC policy unless there is a significant miss,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY).Markets have fully priced in a 25-basis-point rate cut from the Fed next month, with a 34.5% chance of an outsized 50bp reduction, according to the CME FedWatch tool.Investor bets for imminent U.S. rate cuts were further cemented by Fed Chair Jerome Powell’s remarks at Jackson Hole last week that the “time has come” to cut rates, joining a chorus of Fed policymakers who have signalled the same in recent times.The prospect of lower U.S. rates next month has toppled the dollar, which had, for the most part of the past two years, been boosted by the Fed’s aggressive tightening cycle and expectations of how much higher rates could rise.The greenback has since fallen some 2.9% for the month thus far, putting it on track for its steepest monthly decline in nine months.The dollar index was last at 100.94, steadying from its fall to a 13-month low of 100.51 on Tuesday.In other currencies, the New Zealand dollar ticked up 0.2% to $0.6258, while the yen was last little changed at 144.57 per dollar. It was set to rise 3.7% for the month.Contrasting with an imminent Fed easing cycle, policymakers at the Bank of Japan (BOJ) have signalled that the central bank would continue to raise interest rates if inflation stayed on course, offering some relief to the Japanese currency which had come under immense pressure owing to stark interest rate differentials.”With the Fed now closer to cutting rates and the BOJ normalising still-negative real policy rates, the USD/JPY should decline closer to its fair value of around 135,” said strategists at Lombard Odier in a note. More

Earlier this month, X announced it would close its operations and fire its staff in Brazil due to what it called “censorship orders” from Moraes, while adding the firm’s service would remain available for users in Brazil.The Supreme Court posted a screenshot of Wednesday’s court decision on its X account, tagging Musk’s and X’s Global Government Affairs accounts.X did not immediately respond to a request for comment sent outside normal working hours. In the decision, Moraes says that under the country’s law regulating internet issues, companies that do not respect Brazilian legislation or the confidentiality of private information could have their activities temporarily suspended. More

NAIROBI (Reuters) – Chinese lenders approved loans worth $4.61 billion to Africa last year, marking the first annual increase since 2016, an independent study showed on Thursday.Africa secured more than $10 billion in loans a year from China between 2012-2018, thanks to President Xi Jinping’s Belt and Road Initiative (BRI), but the lending fell precipitously from the start of the COVID-19 pandemic in 2020.Last year’s figure, a more than three-fold increase from 2022, shows China is keen to curb risks associated with highly indebted economies, the study by Boston University’s Global Development Policy Centre found.”Beijing appears to be looking for a more sustainable equilibrium level of lending and experimenting with a (new) strategy,” said the university centre, which runs the Chinese Loans to Africa Database project. Last year’s biggest items include a nearly $1 billion loan from China Development Bank to Nigeria for the Kaduna-to-Kano Railway and similar size liquidity facility by the lender to Egypt’s central bank. China has vaulted to the top bilateral lender for many African nations like Ethiopia in recent years. It has lent the continent a total of $182.28 billion between 2000-2023, the Boston University study found, with the bulk of the finances going to Africa’s energy, transport and ICT sectors. Africa featured prominently in the initial years of BRI, as China sought to recreate the ancient Silk Road and extend its geopolitical and economic influence through a global infrastructure development push.China, however, started to turn off the cash spigot in 2019, a shift that was accelerated by the pandemic, leaving a series of incomplete projects around the region, including a modern railway meant to link Kenya with its neighbours.The reduction in loans was caused by China’s own domestic pressures and growing debt burdens among African economies. Zambia, Ghana and Ethiopia have gone into protracted debt overhauls since 2021.More than half of the loans committed last year, or $2.59 billion, were to regional and national lenders, underscoring Beijing’s new strategy, the study by Boston University found.”Chinese lenders’ focus on African financial institutions most likely represent a risk mitigation strategy that avoids exposure to African countries’ debt challenges,” it said.Nearly a tenth of 2023 loans were for three solar and hydropower energy projects, the study found, illustrating a desire by China to move into funding renewable energy instead of coal-fired power plants.Still, the discernible trends in last year’s figures did not offer a clear direction of China’s financial engagement with the continent, the study showed, since Chinese institutions also wrote loans to ailing economies like Nigeria and Angola.”It remains to be seen whether China’s partnerships in Africa will retain their quality,” the Global Development Policy Centre said. More

“I don’t want us to be in a situation where we cut, and then we have to raise rates again: that would be a very bad outcome” because it would undermine people’s confidence in the Fed, he said at an event organized by the Stanford Club of Georgia and the Stanford Black Alumni Association–Atlanta. “If I’m going to err on one side, it’s going to be waiting longer just to make sure that we don’t have that up and down.”The Fed has kept its policy rate in the 5.25%-5.50% range for more than year to bring down high inflation. Last week Fed Chair Powell said “the time has come” to reduce borrowing costs, given that price pressures have eased considerably and the labor market has cooled.For much of this year Bostic had said he expected the Fed would need to cut rates just once this year, likely in the fourth quarter. In recent weeks he has signaled his openness to starting earlier. More

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The company is also looking for investors in a bid to avoid Chapter 11, according to the report. Big Lots did not immediately reply to a Reuters request for comment. Its shares fell 27% in extended trading and have lost nearly 88% of their value this year. Big Lots is attempting to shore up its liquidity that has been pressured by a sales decline over the last two years as high interest rates hurt demand for big-ticket discretionary purchases. The plans are not final and Big Lots’ path may change, the report said.In June, the company raised going-concern doubts after posting a bigger-than-expected quarterly loss and said it may not be able to meet its credit and loan obligations in the near future.At the end of the first quarter, the company had $289 million of net liquidity and $44 million in cash and cash equivalents. More

BRASILIA (Reuters) – Gabriel Galipolo, picked to be the next head of Brazil’s central bank, is a 42-year-old economist who has not always expressed mainstream orthodox economic views.His nomination by President Luiz Inacio Lula da Silva, confirmed on Wednesday by Finance Minister Fernando Haddad, was widely anticipated. If confirmed by the Senate, he will take over when Roberto Campos Neto’s term ends in December.Galipolo is currently the bank’s director of monetary policy and was previously the second-in-command at the Finance Ministry.His arrival at the central bank in July last year, appointed by Lula, sparked skepticism among many in the market, who worried about what they said was a lack of technical expertise, as well as his heterodox opinions on topics such as the need for state intervention to prioritize social needs and the suggestion that the central bank could act across the entire yield curve.Since then, however, economists have warmed to him, and he is now seen by many as the best option to succeed Campos Neto, not least because of his rapport with Lula.Lula has called Galipolo a “golden boy,” saying he is “extremely competent” and has “unparalleled honesty.”For the last two years, Lula has regularly voiced frustration about working with Campos Neto and complained about high interest rates. The benchmark rate is currently at 10.5%. But recently Lula appears to have softened his stance, saying of policymakers earlier this month, “If they need to hike interest rates, then they need to hike interest rates.” That change in tone coincided with statements by Galipolo in which he emphasized that a rate hike was on the table for September’s monetary policy meeting amid continued inflation risks. The comments provided some relief to investors who had been worried that once Lula had most of his appointees on the monetary policy committee, from next year, the central bank would be more lenient on inflation.One market player, speaking anonymously due to the subject’s sensitivity, said the comments indicated Galipolo had shown “persuasive ability” with the president.A second source said Galipolo was “evolving rapidly” within the central bank and appeared to have aligned himself with the institution’s essentially technical stance.Galipolo was introduced to Lula in 2021 by Luiz Gonzaga Belluzzo, a Lula adviser and economics professor at Unicamp, a Sao Paulo university known for heterodox economics.In one of three books Galipolo and Belluzzo co-authored, they criticized the ease with which multinational companies engage in interest rate and currency arbitrage, with subsidiaries borrowing at low interest rates in their home countries and profiting from leveraged investments in Brazilian interest rates.However, as director of monetary policy and responsible for the crucial foreign exchange desk, Galipolo has not implemented any changes to the central bank’s exchange rate policy, refraining from intervening in the market amid a recent sharp weakening of the Brazilian real, which has lost more than 12% against the U.S. dollar this year. Galipolo has a master’s degree in political economy from the Pontifical Catholic University of Sao Paulo.He previously served as an economic adviser to the Sao Paulo state government and CEO of Banco Fator. He also founded a consultancy on public-private partnerships.At the Finance Ministry, he earned goodwill in Congress as a good listener and negotiator, helping Haddad secure important victories, including the approval of a new framework for public accounts.”He’s a good choice, he’s already been vetted here, everything’s fine, people liked him,” said Senator Vanderlan Cardoso, chair of the Senate’s Economic Affairs Committee, which must confirm his nomination before it is put to the full Senate. More