Economy

The proposed class action against the largest U.S. bank was filed on Friday night in Manhattan federal court.It followed similar lawsuits against other banks and brokerages including Ameriprise, LPL Financial (NASDAQ:LPLA), Morgan Stanley, UBS and Wells Fargo.JPMorgan declined to comment on Monday.Illinois resident Dan Bodea alleged that JPMorgan has used its cash sweep program to shortchange customers, while pretending to act as their fiduciary and reaping “outsized benefits” for itself.The lawsuit seeks unspecified compensatory and punitive damages for JPMorgan’s alleged breaches of fiduciary duty, gross negligence and unjust enrichment.Bodea did not specify JPMorgan’s interest rates on uninvested cash or how its payouts compare with those of rivals.Some brokerages offer sweep rates well above 4%, at a time U.S. Treasury bills maturing within three months still yield more than 5%.Lawyers for Bodea did not immediately respond to requests for comment. Morgan Stanley and Wells Fargo said this month that the U.S. Securities and Exchange Commission has been investigating their cash sweep practices, and Wells Fargo said it was in settlement talks.Last month, Wells Fargo said it increased pricing on sweep deposits late in the second quarter, and that this would likely lower future net interest income.The case is Bodea v JPMorgan Chase & Co (NYSE:JPM) et al, U.S. District Court, Southern District of New York, No. 24-06404. More

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The two presidential candidates can both point to records of pushing poverty rates down, but their approaches could hardly be more different.Follow the latest updates on the Harris and Trump campaigns.The presidential race between Vice President Kamala Harris and former President Donald J. Trump presents the sharpest clash in antipoverty policy in at least a generation, and its outcome could shape the economic security of millions of low-income Americans.As the onset of the pandemic in early 2020 threatened to decimate the economy, Mr. Trump signed a large stimulus package that included substantial aid for the poor. When President Biden and Ms. Harris took office in 2021, their administration pushed more big aid expansions through Congress as part of their pandemic-recovery plan, driving the poverty rate still lower.But if the two candidates’ responses to that extraordinary period had elements in common, the lessons they took from it were very different.In the pandemic-era programs, now mostly expired or reduced, Ms. Harris and other Democrats found reinforcement of their faith in the government’s power to ameliorate hardship. If elected, she would seek to sustain or expand many of them, including subsidies for food, health care and housing, and revive a change to the child tax credit that essentially created a guaranteed income for families with children. Those policies helped temporarily cut the poverty rate by more than half from prepandemic levels.She backs a $15 federal minimum wage, which Republicans have fought, and is a vocal supporter of programs like subsidized child care and paid family leave meant to help balance work and family.Mr. Trump says little about his role in pandemic-era poverty programs, which many Republicans view as having been excessive and fraud-ridden. Instead, he touts his 2017 tax cuts, which he credits for boosting the economy and reducing poverty to a prepandemic low, and he has vowed to extend them when they expire next year. Most of the direct benefit from those cuts went to corporations and the wealthy.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

SAN FRANCISCO (Reuters) – ChatGPT developer OpenAI is supporting a California bill that would require tech companies to label AI-generated content, which can range from harmless memes to deepfakes aimed at spreading misinformation about political candidates.The bill, called AB 3211, has so far been overshadowed by attention on another California state artificial intelligence (AI) bill, SB 1047, which mandates that AI developers conduct safety testing on some of their own models. That bill has faced a backlash from the tech industry, including OpenAI, which has Microsoft (NASDAQ:MSFT) as a backer.California state lawmakers attempted to introduce 65 bills touching on AI this legislative season, according to the state’s legislative database, including measures to ensure all algorithmic decisions are proven unbiased and protect the intellectual property of deceased individuals from exploitation by AI companies. Many of the bills are already dead.San Francisco-based OpenAI believes that for AI-generated content, transparency and requirements around provenance such as watermarking are important, especially in an election year, according to a letter sent to California State Assembly member Buffy Wicks, who authored the bill.With countries representing a third of the world’s population having polls this year, experts are concerned about the role AI-generated content will play, and it has already been prominent in some elections, such as in Indonesia.”New technology and standards can help people understand the origin of content they find online, and avoid confusion between human-generated and photorealistic AI-generated content,” OpenAI Chief Strategy Officer Jason Kwon wrote in the letter, which was reviewed by Reuters.AB 3211 has already passed the state Assembly by a 62-0 vote. Earlier this month it passed the senate appropriations committee, setting it up for a vote by the full state Senate. If it passes by the end of the legislative session on Aug. 31, it would advance to Governor Gavin Newsom to sign or veto by Sept. 30. More

PARIS (Reuters) – Leaders from France’s far-right National Rally said on Monday their party will block any prime ministerial candidate from the leftist New Popular Front, narrowing President Emmanuel Macron’s options to resolve the country’s political crisis.Marine Le Pen and Jordan Bardella, the political tag team that runs the National Rally, met with Macron on Monday as he seeks to unlock the political deadlock caused by July’s inconclusive snap legislative election which he called. After their one-hour meeting, Bardella said the New Popular Front – a broad alliance of parties ranging from the moderate Socialists to Jean-Luc Melenchon’s far-left France Unbowed – was a “danger” for the country.Bardella said his camp would immediately call a no-confidence vote against any leftist premier. “The New Popular Front in its programme, in its movements, as well as the personalities who embody it represents a danger to public order, civil peace and obviously for the economic life of the country,” Bardella told reporters. “We intend to protect the country from a government that would fracture French society.”A Macron aide said the president could name a prime minister by the end of this week, but it remains to be seen if the person he picks – someone with the broadest possible appeal – will win approval by lawmakers. If not, Macron will have to go back to the drawing board, deepening the political crisis. No grouping emerged from the snap election with a majority, with the vote evenly split between the New Popular Front, Macron’s centrist bloc and the National Rally. The New Popular Front won more votes than any other party, and has argued that its candidate, a little known civil servant called Lucie Castets, should be named prime minister.Castets told Macron on Friday that the left has the right to form the next government. Macron has ignored the New Popular Front’s nomination, and a source close to him said he believed the balance of power lies more with the centre or centre-right. Some possible candidates that Macron is mulling include a conservative regional president, Xavier Bertrand, and former Socialist Prime Minister Bernard Cazeneuve, sources have said. French media recently mentioned Karim Bouamrane, the Socialist mayor of an impoverished Paris suburb, as another possible name.Le Pen suggested Macron could call a referendum to chart a path out of the chaos, and said she was opposed to a so-called “technical” government of apolitical technocrats, saying “there are only political governments hiding behind technical names.” More

SYDNEY (Reuters) – Is your boss texting you on the weekend? Work email pinging long after you’ve left for home? Australian employees can now ignore those and other intrusions into home life thanks to a new “right to disconnect” law designed to curb the creep of work emails and calls into personal lives.The new rule, which came into force on Monday, means employees, in most cases, cannot be punished for refusing to read or respond to contacts from their employers outside work hours.Supporters say the law gives workers the confidence to stand up against the steady invasion of their personal lives by work emails, texts and calls, a trend that has accelerated since the COVID-19 pandemic scrambled the division between home and work.”Before we had digital technology there was no encroachment, people would go home at the end of a shift and there would be no contact until they returned the following day,” said John Hopkins, an associate professor at Swinburne University of Technology. “Now, globally it’s the norm to have emails, SMS, phone calls outside those hours, even when on holiday.”Australians worked on average 281 hours of unpaid overtime in 2023, according to a survey last year by the Australia Institute, which estimated the monetary value of the labour at A$130 billion ($88 billion).The changes add Australia to a group of roughly two dozen countries, mostly in Europe and Latin America, which have similar laws. Pioneer France introduced the rules in 2017 and a year later fined pest control firm Rentokil Initial 60,000 euros ($66,700) for requiring an employee to always have his phone on.Rachel Abdelnour, who works in advertising, said the changes would help her disconnect in an industry where clients often have different working hours.”I think it’s actually really important that we have laws like this,” she told Reuters. “We spend so much of our time connected to our phones, connected to our emails all day, and I think that it’s really hard to switch off as it is.”REFUSALS MUST BE REASONABLETo cater for emergencies and jobs with irregular hours, the rule still allows employers to contact their workers, who can only refuse to respond where it is reasonable to do so. Determining whether a refusal is reasonable will be up to Australia’s industrial umpire, the Fair Work Commission (FWC), which must take into account an employee’s role, personal circumstances and how and why the contact was made.It has the power to issue a cease and desist order and, failing that, levy fines of up A$19,000 for an employee or up to A$94,000 for a company.But the Australian Industry Group, an employer group, says ambiguity about how the rule applies will create confusion for bosses and workers. Jobs will become less flexible and in doing so slow the economy, it added.”The laws came literally and figuratively out of left field, were introduced with minimal consultation about their practical effect and have left little time for employers to prepare,” the group said on Thursday. The president of the Australian Council of Trade Unions Michele O’Neil said the caveat built into the law meant it won’t interfere with reasonable requests. Instead, it will stop workers paying the price for poor planning by management, she said.She cited an unidentified worker who finished a shift at midnight, only to be texted four hours later and told to be back at work by 6 a.m.”It’s so easy to make contact, common sense doesn’t get applied anymore,” she said. “We think this will cause bosses to pause and think about whether they really need to send that text or that email.”($1 = 0.8992 euros)($1 = 1.4723 Australian dollars) More

JERUSALEM (Reuters) – The Bank of Israel (BoI) will keep short-term interest rates unchanged for a fifth straight meeting on Wednesday, with economists uncertain over the timing of a rate cut due to rising price pressures and the Israel-Hamas war, a Reuters poll showed.All 15 economists polled said they expected the central bank to hold its benchmark rate at 4.5% when the decision is announced on Wednesday at 4 p.m. (1300 GMT).Israel’s annual inflation rate accelerated to 3.2% in July from 2.9% in the previous month, moving back above the bank’s 1-3% target range after falling as low as 2.5% in February.In contrast, Israel’s economy grew by a less than expected 1.2% annualised in the second quarter, according to a preliminary estimate. “The BoI, in our view, will attach higher weight to higher inflation news rather than to soft growth news,” said JP Morgan economist Anatoliy Shal. It “will continue to err on the side of caution near term, especially as the geopolitical environment remains tense.”Shal and most other economists expect rates to stay on hold for at least the next few months due to higher inflation, looser fiscal policy and an increase in the risk premium resulting from the 10-month-old war in Gaza against Hamas and fears of an escalation involving Hezbollah and Iran.”The uncertainty makes it difficult to be confident on the likely timing of the next cut,” said Golman Sachs economist Kevin Daly.The budget deficit – on the heels of higher defence costs – has surged to 8.1% of gross domestic product, above a 2024 target of 6.6%.Meanwhile, the U.S. Federal Reserve is likely to reduce rates in September and the European Central Bank is also expected to reduce borrowing costs again next month.”Unlike the Fed and ECB, the Bank of Israel will continue to stress several inflationary risks, including fiscal policy, a tight labour market, housing price pressures, and supply disruptions,” said Leader Capital Markets Chief Economist Jonathan Katz. Still, the shekel has moved to a month high of around 3.65 per dollar, gaining 3% so far in August, on a belief that the current conflict is contained and will not turn into an all-out war with Hezbollah or Iran, as well as on expectations of near-term U.S. rate cuts.The monetary policy committee in January reduced its key rate by 25 basis points, which followed 10 straight rate hikes in an aggressive tightening cycle from an all-time low of 0.1% in April 2022, before a pause last July.Daly said he had a relatively dovish view on Israeli inflation and rates, believing the inflation rate would ease in coming months while “a reduction in shekel volatility will enable the BoI to resume its cutting cycle later this year”. More

Drawing a historical parallel to the late 1960s, they cautioned that such a move could reignite inflation, especially if unemployment remains low.Reflecting on past events, Piper Sandler noted, “Back in 1966, unemployment was a very low 3.6%,” and after a period of tightening, the Fed aggressively cut rates to maintain a strong labor market.Piper Sandler explains that this decision led to a temporary decrease in unemployment but ultimately set the stage for a surge in inflation by 1969.The analysts fear that history might repeat itself if the Fed acts similarly today.Piper Sandler emphasized that while “upside risks to inflation have diminished,” this is largely due to a weakening labor market. They noted that companies are cutting prices because “labor and spending power” are slowing, suggesting that the inflationary effects from earlier fiscal and monetary stimulus measures are still lingering.The analysts are particularly concerned about Fed Chair Jerome Powell’s recent comments, where he emphasized the Fed’s commitment to supporting a strong labor market. They questioned whether there is “ample room” in the current labor market to prevent inflation from reaccelerating if the Fed eases too much.Piper Sandler posed a critical question: “Is Powell risking a 1968-1969 inflation repeat by easing aggressively with unemployment still near multi-decade lows?”They contend that without a “sustained shift up in the unemployment rate,” inflation may not decline as hoped. If the Fed eases too aggressively, the analysts warn, investors should be “very worried about inflation.” More