Finance

JPMorgan disclosed that the Consumer Financial Protection Bureau could punish the lender for its role in Zelle, the giant peer-to-peer digital payments network.
In response, JPMorgan issued a thinly veiled threat: “The firm is evaluating next steps, including litigation.”
The prospect of a bank suing its regulator would’ve been unheard of in an earlier era, according to policy experts, but a combination of factors has created an environment where banks and their regulators have never been farther apart.
Banks, airlines, pharmaceutical companies and energy firms have found ways to undermine the power of federal agencies, according to legal experts.

JPMorgan Chase CEO and Chairman Jamie Dimon gestures as he speaks during the U.S. Senate Banking, Housing and Urban Affairs Committee oversight hearing on Wall Street firms, on Capitol Hill in Washington, D.C., on Dec. 6, 2023.
Evelyn Hockstein | Reuters

Buried in a roughly 200-page quarterly filing from JPMorgan Chase last month were eight words that underscore how contentious the bank’s relationship with the government has become.
The lender disclosed that the Consumer Financial Protection Bureau could punish JPMorgan for its role in Zelle, the giant peer-to-peer digital payments network. The bank is accused of failing to kick criminal accounts off its platform and failing to compensate some scam victims, according to people who declined to be identified speaking about an ongoing investigation.

In response, JPMorgan issued a thinly veiled threat: “The firm is evaluating next steps, including litigation.”
The prospect of a bank suing its regulator would’ve been unheard of in an earlier era, according to policy experts, mostly because corporations used to fear provoking their overseers. That was especially the case for the American banking industry, which needed hundreds of billions of dollars in taxpayer bailouts to survive after irresponsible lending and trading activities caused the 2008 financial crisis, those experts say.
But a combination of factors in the intervening years has created an environment where banks and their regulators have never been farther apart.
Trade groups say that in the aftermath of the financial crisis, banks became easy targets for populist attacks from Democrat-led regulatory agencies. Those on the side of regulators point out that banks and their lobbyists increasingly lean on courts in Republican-dominated districts to fend off reform and protect billions of dollars in fees at the expense of consumers.
“If you go back 15 or 20 years, the view was it’s not particularly smart to antagonize your regulator, that litigating all this stuff is just kicking the hornet’s nest,” said Tobin Marcus, head of U.S. policy at Wolfe Research.

“The disparity between how ambitious [President Joe] Biden’s regulators have been and how conservative the courts are, at least a subset of the courts, is historically wide,” Marcus said. “That’s created so many opportunities for successful industry litigation against regulatory proposals.”

Assault on fees

Those forces collided this year, which started out as one of the most consequential for bank regulation since the post-2008 reforms that curbed Wall Street risk-taking, introduced annual stress tests and created the industry’s lead antagonist, the CFPB.
In the final months of the Biden administration, efforts from a half-dozen government agencies were meant to slash fees on credit card late payments, debit transactions and overdrafts, among other proposals. The industry’s biggest threat was the Basel Endgame, a sweeping plan to force big banks to hold tens of billions of dollars more in capital for activities like trading and lending.
“The industry is facing an onslaught of regulatory and potential legislative change,” Marianne Lake, head of JPMorgan’s consumer bank, warned investors in May.

JPMorgan’s disclosure about the CFPB probe into Zelle comes after years of grilling by Democrat lawmakers over financial crimes on the platform. Zelle was launched in 2017 by a bank-owned firm called Early Warning Services in response to the threat from peer-to-peer networks including PayPal.
The vast majority of Zelle activity is uneventful; of the $806 billion that flowed across the network last year, only $166 million in transactions was disputed as fraud by customers of JPMorgan, Bank of America and Wells Fargo, the three biggest players on the platform.
But the three banks collectively reimbursed just 38% of those claims, according to a July Senate report that looked at disputed unauthorized transactions.
Banks are typically on the hook to reimburse fraudulent Zelle payments that the customer didn’t give permission for, but usually don’t refund losses if the customer is duped into authorizing the payment by a scammer, according to the Electronic Fund Transfer Act.
A JPMorgan payments executive told lawmakers in July that the bank actually reimburses 100% of unauthorized transactions; the discrepancy in the Senate report’s findings is because bank personnel often determine that customers have authorized the transactions.
Amid the scrutiny, the bank began warning Zelle users on the Chase app to “Stay safe from scams” and added disclosures that customers won’t likely be refunded for bogus transactions.
JPMorgan declined to comment for this article.

Dimon in front

The company, which has grown to become the largest and most profitable American bank in history under CEO Jamie Dimon, is at the fore of several other skirmishes with regulators.
Thanks to his reputation guiding JPMorgan through the 2008 crisis and last year’s regional banking upheaval, Dimon may be one of few CEOs with the standing to openly criticize regulators. That was highlighted this year when Dimon led a campaign, both public and behind closed doors, to weaken the Basel proposal.
In May, at JPMorgan’s investor day, Dimon’s deputies made the case that Basel and other regulations would end up harming consumers instead of protecting them.
The cumulative effect of pending regulation would boost the cost of mortgages by at least $500 a year and credit card rates by 2%; it would also force banks to charge two-thirds of consumers for checking accounts, according to JPMorgan.
The message: banks won’t just eat the extra costs from regulation, but instead pass them on to consumers.
While all of these battles are ongoing, the financial industry has racked up several victories so far.
Some contend the threat of litigation helped convince the Federal Reserve to offer a new Basel Endgame proposal this month that roughly cuts in half the extra capital that the largest institutions would be forced to hold, among other industry-friendly changes.
It’s not even clear if the watered-down version of the proposal, a long-in-the-making response to the 2008 crisis, will ever be implemented because it won’t be finalized until well after U.S. elections.
If Republican candidate Donald Trump wins, the rules might be further weakened or killed outright, and even under a Kamala Harris administration, the industry could fight the regulation in court.
That’s been banks’ approach to the CFPB credit card rule, which aimed to cap late fees at $8 per incident and was set to go into effect in May.
A last-ditch effort from the U.S. Chamber of Commerce and bank trade groups successfully delayed its implementation when Judge Mark Pittman of the Northern District of Texas sided with the industry, granting a freeze of the rule.

‘Venue shopping’

A key playbook for banks has been to file cases in conservative jurisdictions where they are likely to prevail, according to Lori Yue, a Columbia Business School associate professor who has studied the interplay between corporations and the judicial system.
The Northern District of Texas feeds into the 5th Circuit Court of Appeals, which is “well-known for its friendliness to industry lawsuits against regulators,” Yue said.
“Venue-shopping like this has become well-established corporate strategy,” Yue said. “The financial industry has been particularly active this year in suing regulators.”
Since 2017, nearly two-thirds of the lawsuits filed by the U.S. Chamber of Commerce challenging federal regulations have been in courts under the 5th Circuit, according to an analysis by Accountable US.
Industries dominated by a few large players — from banks to airlines, pharmaceutical companies and energy firms — tend to have well-funded trade organizations that are more likely to resist regulators, Yue added.
The polarized environment, where weakened federal agencies are undermined by conservative courts, ultimately preserves the advantages of the largest corporations, according to Brian Graham, co-founder of bank consulting firm Klaros.
“It’s really bad in the long run, because it locks in place whatever the regulations have been, while the reality is that the world is changing,” Graham said. “It’s what happens when you can’t adopt new regulations because you’re terrified that you’ll get sued.”
— With data visualizations by CNBC’s Gabriel Cortes.

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In an email to OpenAI’s investors, CFO Sarah Friar said the company still has a “talented leadership bench” following key departures this week.
Friar also says its current funding round, which sources say values OpenAI at $150 billion, was oversubscribed and set to close next week.
“Collectively, we remain laser-focused on bringing AI to everyone and building sustainable revenue models that fuel our operations and deliver value to our investors and employees,” Friar wrote.

OpenAI’s Sora AI tool allows users to create AI-generated videos from text-based inputs.
Costfoto | Nurphoto | Getty Images

OpenAI CFO Sarah Friar is looking to reassure its investors that the richly valued artificial intelligence startup is still in a strong position and is poised to close a big funding round soon, despite losing top talent this week.
In an email to OpenAI’s investors seen by CNBC, Friar addressed the departure of Chief Technology Officer Mira Murati, who announced her exit on Wednesday. Later that day, Sam Altman said two top research executives, Bob McGrew and Barret Zoph, were also leaving.

“I wanted to personally reach out following the news of Mira’s departure from OpenAI,” Friar wrote in the letter, which was viewed by CNBC. “While leadership changes are never easy, I want to ensure you have the full context.”
Friar added that, “We are incredibly proud of everything she’s helped build,” and said the San Francisco-based company still has a “talented leadership bench” to compete.
OpenAI, which is backed by Microsoft and recently partnered with Apple on its AI for iPhones, is in the midst of closing a $6.5 billion funding round, which should value the company at roughly $150 billion, according to sources familiar with the matter. Thrive Capital is leading the round, and plans to invest $1 billion, according to sources.
Friar said in the email that the funding round was oversubscribed and would close by next week. She said the team plans to host a series of calls with investors to introduce the group to key leaders from product and research teams.
“Collectively, we remain laser-focused on bringing AI to everyone and building sustainable revenue models that fuel our operations and deliver value to our investors and employees,” Friar wrote. The company is “excited for you to be with us as we enter our next chapter,” she wrote.

OpenAI declined to comment on the email.
Murati’s departure comes after 6½ years at the company. She briefly served as interim CEO last year after the board of directors abruptly fired Altman. When Altman was quickly reinstated, Murati returned to the role of CTO.

Sarah Friar has been named OpenAI CFO
Anjali Sundaram | CNBC

The company was already dealing with the loss of key executives. Co-founder John Schulman and safety chief Jan Leike left to join rival Anthropic. Co-founder Ilya Sutskever departed to start another AI company, while another founder, Greg Brockman, is on a leave of absence.
Friar said Mark Chen will step into the role of of senior vice president of research, and leaders like Kevin Weil, who joined from Meta, and Srinivas Narayanan are the “right people to keep pushing the boundaries of innovation.”
Friar was formerly CEO of Nextdoor, and before that CFO at Block, formerly Square.
Also on Thursday, at an all-hands meeting, Altman denied that there are plans for him to receive a “giant equity stake” in the company, calling reports of such a development “just not true,” according to a person who was in attendance.
Altman and Friar both said at the meeting, conducted by video, that investors have raised concerns about Altman not having equity in the company that he co-founded almost nine years ago, said the person, who asked not to be named because the gathering was only for employees.

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China’s latest policy signals have a bigger impact on sentiment than resolving deeper issues such as real estate, analysts said.
“The ‘shock and awe’ strategy could be meant to jumpstart the markets and boost confidence,” said Ting Lu, chief China economist at Nomura, but eventually it is still necessary to introduce well thought out policies to address many of the “deep-rooted problems.”
“China’s policy moves to lower interest rates have not helped improve confidence among consumers who are fearful of borrowing in the first place,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said in an email.

A shareholder at a securities hall in Hangzhou, the capital of Zhejiang province in east China, on Sept. 24, 2024.
Cfoto | Future Publishing | Getty Images

BEIJING — China’s latest policy signals have a bigger impact on sentiment than resolving deeper issues such as real estate, analysts said.
The Shanghai Composite rallied Thursday to close at a three-month high after state media reported Chinese President Xi Jinping led a Politburo meeting on the economy that morning.

The unexpected high-level gathering called for halting the property market decline, and strengthening fiscal and monetary policy. It provided few specifics, while affirming central bank rate cuts announced earlier in the week.
Markets should value how Beijing is recognizing the severity of the economic situation, and how its piecemeal approach so far hasn’t worked, Ting Lu, chief China economist at Nomura, said in a report Friday.
“The ‘shock and awe’ strategy could be meant to jumpstart the markets and boost confidence,” Lu said, but eventually it is still necessary to introduce well thought out policies to address many of the “deep-rooted problems.”

Growth in the world’s second-largest economy has slowed, dragged down by the real estate slump. Retail sales have risen by barely more than 2% in recent months, and industrial profits have barely grown for the first eight months of the year. Exports are one of the few bright spots.
Nomura’s Lu said policymakers in particular need to stabilize property since it is in its fourth year of contraction. He estimated the impact of additional stimulus wouldn’t exceed 3% of China’s annual GDP.

“Markets should place more emphasis on the specifics of the stimulus,” Lu said. “If not designed well, a stimulus program in a haste, even if seemingly large, could have a slow and limited impact on growth.”
The People’s Bank of China this week cut major interest rates, and announced plans to lower rates for existing mortgage holders. The Ministry of Finance has yet to release major policies, despite reports of such plans.

Questions about scale

For some investment institutions, that’s still not enough to move the needle on their China outlook.
“China’s policy moves to lower interest rates have not helped improve confidence among consumers who are fearful of borrowing in the first place,” Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, said in an email.
“We would be selling emerging market equities at this point,” he said, “as we have little confidence in Beijing’s willingness to extend the large stimulus that is needed.”
Christopher added that Thursday’s “announcement of coming fiscal stimulus is welcome, but it remains to be seen if China’s government is willing to take the steps necessary to reverse the psychological damage to household and private business sentiment.”
The Chinese government has cracked down on real estate developers, after-school tutoring businesses and the gaming industry in recent years. Policymakers have since eased their stance, but business and consumer confidence has yet to recover.
China’s latest interest rate cuts follow the U.S. Federal Reserve’s shift last week to easier monetary policy. U.S rate cuts theoretically give China’s central bank more room to reduce already-low domestic rates.
A survey in September of more than 1,200 companies in China by the U.S.-based China Beige Book found that corporate borrowing declined, despite historic lows in the costs to do so.
“One can certainly hope for a wealth effect from stocks and property, but stocks will be temporary and the wealth decline from property is overwhelming compared to any relief,” Shehzad Qazi, chief operating officer at the China Beige Book, a U.S.-based research firm, said in a note Thursday.
He expects retail sales could pick up slightly in the next four to six months.
Qazi also expects the latest rally in Chinese stocks to continue into the last three months of the year. But cautioned that policies announced this week for driving more capital into the stock market “are not yet operational, and some may never be.”

Sentiment change

Those caveats haven’t discouraged investors from piling into beaten-down Chinese stocks. The CSI 300 stock index climbed Friday, on pace for its best week since 2008. It could rise another 10% in the near term, Laura Wang, chief China equity strategist at Morgan Stanley, told CNBC’s “Street Signs Asia.”
The sentiment shift has spread globally.
“I thought that what the Fed did last week would lead to China easing, and I didn’t know that they were going to bring out the big guns like they did,” U.S. billionaire hedge fund founder David Tepper told CNBC’s “Squawk Box” on Thursday. “And I think there’s a whole shift.”
Tepper said he bought more Chinese stocks this week.
An important takeaway from Thursday’s high-level government meeting was the support for capital markets, in contrast to a more negative perception in China on the financial industry in recent years, said Bruce Liu, CEO of Esoterica Capital, an asset manager.
“Hopefully this meeting is going to correct this misperception,” he said. “For China to keep growing in a healthy way, [they] really need a well-functioning capital market.”
“I don’t think they sent any different messages,” Liu said. “It’s just [that] they emphasize it with detailed action plans. That made a difference.” More

David Tepper, founder and president of Appaloosa Management.
David Orrell | CNBC

Appaloosa Management’s David Tepper said investors should believe the Federal Reserve when it says it will lower interest rates because the central bank has now to keep credibility.
“You just read what these guys are saying,” Tepper said Thursday on CNBC’s “Squawk Box.” “Powell told you something. … He told you some kind of recalibration. He has to follow through somewhat. I’m not that smart. I just read what they say and do they have conviction. They usually do what they say, especially when they have this level of conviction.”

The Fed last week sliced half a percentage point off benchmark rates, starting its first easing campaign in four years with an aggressive move despite a pretty stable economy. In addition to this reduction, the central bank indicated through its “dot plot” the equivalent of 50 more basis points of cuts by the end of the year.
Fed Chairman Jerome Powell said the cut was a “recalibration” for the central bank and did not commit to similar moves at each upcoming meeting.
“Probably two or three interest rates, 25 basis point cuts, they have to do, or they lose credibility,” Tepper said. “They’re going to do something besides the 50. You know, another 25, 25, 25 seems like it’s going to have to be done.” (One basis point equals 0.01%.)
‘I don’t love the U.S. markets’
Still, Tepper said the macro setup for U.S. stocks makes him nervous as the Fed eases monetary policy in a relatively solid economy like it did in the 1990s. The supersized rate cut last week came despite most economic indicators looking fairly solid.
“It was around the ’90s in that market where the Fed cut rates into Y2K in a good economy,” he said. That turned into “bubble mania in ’99, early 2000 so I don’t love this. I’m a value guy.”

Gross domestic product has been rising steadily, and the Atlanta Fed is tracking 3% growth in the third quarter based on the resilience in consumer spending. Meanwhile, most gauges showed inflation is still well ahead of the Fed’s 2% target. However, there has been a slowdown in the labor market, which partly prompted the oversized rate reduction.
‘Sure as heck won’t be short’
The widely followed hedge fund manager said while the central bank’s move gave him hesitation, he certainly is not betting against U.S. equities because of the immediate benefits of easy policy.
“I don’t love the U.S. markets on a value standpoint, but I sure as heck won’t be short, because I would be nervous as heck about the setup with easy money everywhere, a relatively good economy,” Tepper said. “It would make me nervous, not to be somewhat long the U.S.”
Tepper, who is also the owner of National Football League’s Carolina Panthers franchise, revealed that he’s going all in on China on the back of a rate cut and a flood of support measures the government recently announced to shore up a flailing economy.
He added that he prefers Asian and European equities to U.S. stocks.

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Distance Technologies, a Helsinki-based mixed-reality startup, raised 10 million euros ($11.1 million) of funding in a round led by GV, the venture capital arm of Alphabet.
The company says its technology can turn any transparent surface into an augmented-reality display, meaning that the user can view 3D digital objects overlayed on top of the panel they’re viewing.
Distance says its system is capable of “infinite” pixel depth, allowing it to create a life-size field of view in any setting — whether behind the wheel of a car or flying an F-18 fighter jet.

Distance Technologies develops a product that it says can turn any transparent surface into an augmented-reality display.
Distance Technologies

Distance Technologies, a Finnish startup that aims to bring mixed-reality technology to any car windshield or plane cockpit, has raised 10 million euros ($11.1 million) of funding from GV, the venture capital arm of Alphabet and other investors.
Distance raised the cash injection in a seed round led by GV, with existing investors FOV Ventures and Maki.vc also stumping up more cash for the startup, the company told CNBC on Thursday.

Helsinki-headquartered Distance develops technology that it says can turn any transparent surface into an augmented-reality display, enabling the user to see 3D digital objects overlayed on top of the panel they’re viewing.
This avoids the need for any clunky hardware, like a mixed reality headset or augmented reality glasses, both of which require a user to pull an actual device over their eyes to immerse themselves in the experience.
“One of the great barriers for mixed-reality is that, as long as you need to put something on your head, it will never be effortless or elegant as a solution,” Urho Konttori, CEO and co-founder of Distance, told CNBC in an interview earlier this week. Konttori was formerly chief technology officer of Varjo, another Helsinki-based mixed-reality firm.
Distance is primarily focused on selling into the auto, aerospace and defense markets.

The way Distance works is by using tracking technology to identify where you are looking and then compute the correct light field to match the exact positions of your eyes, according to Konttori.

Distance’s solution adds a set of optics layers on top of most liquid crystal displays (LCDs), which allow its tech to beam an image onto the places where your eyes are focusing.
Using this technique, Distance can separate the light fields into your left and right eyes, while also creating an additional optical layer underneath that creates a high brightness.
Distance says its system is capable of “infinite” pixel depth, meaning it can create a life-size field of view in any setting — whether behind the wheel of a car or flying an F-18 fighter jet.
GV, which was formerly known as Google Ventures and counts the internet search giant’s holding company Alphabet as its sole limited partner, told CNBC that it was attracted to invest in Distance due to the “potential to build the next-generation of user interfaces.”
“We are particularly excited about how some of the nearer-term pathways to bring this to market in automotive and aerospace allow the potential for users to get their hands on this technology,” Roni Hiranand, principal at GV, told CNBC.
Commercializing mixed reality isn’t an easy feat. For one, mixed-reality devices are still expensive. Apple’s Vision Pro and Microsoft’s HoloLens 2 devices both start at $3,500 — and they’re not cheap to make, either. A new AR glasses concept device Meta unveiled Wednesday reportedly cost the firm $10,000 per unit to make, according to The Verge.
Meta was not immediately available for comment when contacted by CNBC.

Augmented reality heads-up displays, or HUDs, aren’t a new phenomenon in the automotive industry. Companies have been working to add AR features to cars for several years, with tech giant Huawei among the early movers to pioneer the tech in China.
A slew of other display technology firms are developing their own AR HUDs for cars, including First International Computer, Spectralics, Envisics, Futurus, CY Vision, Raythink, Denso, Bosch, Continental, and Panasonic.
According to Distance Technologies Chief Marketing Officer Jussi Mäkinen, the company’s system can cover the entire surface of any transparent surface, not just a specific corner or the bottom half of a display — a limitation that most automotive AR HUDs are facing today.
“The main difference here is that we are driven by the software,” Mäkinen told CNBC.
The company previously showcased a proof-of-concept version of its technology at the Augmented World Expo USA 2024 mixed-reality industry trade show in June.
For now, Distance has had to use simple optics and normal LCD displays to demonstrate its technology to prospective partners and investors. Going forward, Konttori said he’s getting ready to push a “very expensive” button: advancing Distance’s optics technology into what he calls the next generation early next year.
“I would say that we have been in the research cycle now,” Distance’s CEO said. “Now, we are switching into the product cycle. And the key thing to do is work with somebody who will become your customer … one or two to work very closely with, and then a finalized product specification.” More

China aims to stop the property slump, top leaders said Thursday in a readout of a high-level meeting published by state media.
While the meeting did not provide many details, it is significant for a country where policy directives are increasingly determined at the very top.
Stocks in mainland China and Hong Kong extended gains after the news to close sharply higher.

Builders step up construction in Yuexi County, Anqing city, Anhui province, China, on Sept 25, 2024.
Cfoto | Future Publishing | Getty Images

BEIJING — China aims to stop the property slump, top leaders said Thursday in a readout of a high-level meeting published by state media.
Authorities “must work to halt the real estate market decline and spur a stable recovery,” the readout said in Chinese, translated by CNBC. It also called for “responding to concerns of the masses.”

Chinese President Xi Jinping led Thursday’s meeting of the Politburo, the second-highest circle of power in the ruling Chinese Communist Party, state media said.
The readout said leaders called for strengthening fiscal and monetary policy support, and touched on a swath of issues from employment to the aging population. It did not specify the timeframe or scale of any measures.
“I take the messages from this meeting as a positive step,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in an email to CNBC. “It takes time to formulate a comprehensive fiscal package to address the economic challenges, [and] the meeting took one step in that direction.”
Stocks in mainland China and Hong Kong extended gains after the news to close sharply higher on Thursday. An index of Chinese property stocks in Hong Kong surged by nearly 12%.

Real estate once accounted for more than a quarter of China’s economy. The sector has slumped since Beijing’s crackdown in 2020 on developers’ high levels of debt. But the decline has also cut into local government revenue and household wealth.

China’s broader economic growth has slowed, raising concerns about whether it can reach the full-year GDP target of around 5% without additional stimulus. Just days after the U.S. cut interest rates, the People’s Bank of China on Tuesday announced a slew of planned interest rate cuts and real estate support. Stocks rose, but analysts cautioned the economy still needed fiscal support.
Official data shows real estate’s decline has moderated slightly in recent months. The value of new homes sold fell by 23.6% for the year through August, slightly better than the 24.3% drop year-to-date as of July.
Average home prices fell by 6.8% in August from the prior month on a seasonally adjusted basis, according to Goldman Sachs. That was a modest improvement from a 7.6% decline in July.
“Bottom-out stabilization in the housing market will be a prerequisite for households to take action and break the ‘wait-and-see’ cycle,” Yue Su, principal economist China, at the Economist Intelligence Unit, said in a note. “This suggests that the policy priority is not to boost housing prices to create a wealth effect, but to encourage households to make purchases. This real estate policy is aiming at reducing its drag on the economy.”

Thursday’s meeting called for limiting growth in housing supply, increasing loans for whitelisted projects and reducing the interest on existing mortgages. The People’s Bank of China on Tuesday said forthcoming cuts should lower the mortgage payment burden by 150 billion yuan ($21.37 billion) a year.
While Thursday’s meeting did not provide many details, it is significant for a country where policy directives are increasingly determined at the very top.
The high-level meeting reflects the setting of an “overall policy,” as there previously wasn’t a single meeting to sum up the measures, Bank of China’s chief researcher Zong Liang said in Mandarin, translated by CNBC.
He noted how the meeting follows the market’s positive response to the policy announcements earlier in the week. Zong expects Beijing to increase support, noting a shift from focus on stability to taking action.

Tempering growth expectations

The meeting readout said China would “work hard to complete” the country’s full-year economic targets.
That’s less aggressive than the Politburo meeting in July, when the readout said China would work to achieve those goals “at all costs,” according to Bruce Pang, chief economist and head of research for Greater China at JLL.
That shows policymakers are looking for middle ground between short-term growth and longer-term efforts to address structural issues, he said.

Goldman Sachs and other firms have trimmed their growth forecasts in the last few weeks.
The change in tone about the economic targets signals “the government may tolerate growth below 5%,” the EIU’s Su said. “We estimate real economic growth to be around 4.7% in 2024, before slowing down to 4.5% (a moderate upward revision to our previous forecast).”
“The Politburo meetings on economic deployment usually take place in April, July, and October,” she said.
“The fact that this meeting was held earlier, along with the emphasis on stabilizing growth, reflects policymakers’ concerns about the current economic growth trend.”
Initial analyst reactions to Thursday’s meeting readout were varied.
HSBC said “the tide has turned; be prepared for more proactive initiatives.” Capital Economics, on the other hand, said Beijing’s hint at stimulus did not make it clear whether it would include large-scale fiscal support.
S&P Global Ratings analysts said in a report earlier this year that fiscal stimulus is losing its effectiveness in China and is more of a strategy to buy time for longer-term goals.
Senior officials in the summer told reporters that the economy needed to endure necessary “pain” as it transitioned to one of higher-quality growth with a bigger high-tech industry.
— CNBC’s Sonia Heng contributed to this report. More

A single dissent on the Federal Reserve’s interest-rate committee garnered plenty of attention last week. Understandably so. It marked the first time since 2005 that a Fed governor had opposed a rate decision. Michelle Bowman’s disagreement highlighted concerns that a half-percentage-point cut might be excessive for an economy yet to vanquish inflation. Nevertheless, her 11 other voting colleagues all supported the cut—an indication of near-total unanimity on where the Fed should set rates today. More

At what time and place should you meet a stranger in New York if you cannot communicate with them beforehand? This hypothetical puzzle was first posed by Thomas Schelling, a game theorist, in 1960, as a method of explaining “focal points”—the solution people default to when co-ordinating if they are unable to converse. The most common answer, according to students he quizzed, was noon at “the information booth in Grand Central Station”. More