Finance

The Financial Industry Regulatory Authority has approved amendments that would replace the long-standing $25,000 minimum equity rule for pattern day trading.
The change is pending approval by the Securities and Exchange Commission.

A graph displaying the Apple stock price on a smartphone app.
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Regulators are moving to dismantle one of the most controversial barriers for active retail traders — the $25,000 minimum equity rule for pattern day trading.
The Financial Industry Regulatory Authority on Tuesday approved amendments that would replace the long-standing threshold, making active day trading more accessible to smaller accounts. The change is pending approval by the Securities and Exchange Commission.

The $25,000 minimum equity rule mandates that traders must maintain a minimum account balance of $25,000 in a margin account to execute four or more day trades within a five-business-day period. The rule was put in place in 2001 amid the dot-com bubble and crash as regulators grew worried that small traders were taking excessive risks with volatile internet stocks.
FINRA is replacing this mandate with an intraday margin rule that applies the existing maintenance margin rules to intraday exposure. In other words, one’s intraday buying power will be based on the margin requirements for the positions they take on during the day, not a fixed equity minimum.
The regulators said the overhaul reflects how technology and market access have transformed retail trading since the rules were first adopted.
The rule change could lead to more options trading and boost activity for brokers like Robinhood.
Robinhood shares rebounded from an earlier loss and were higher by 1% in Wednesday trading following the FINRA news. More

Several artificial intelligence models are now advanced enough to pass the three-part chartered financial analyst exam, even the most difficult Level III test.
Previous research, particularly from two years ago, had found AI could clear Levels I and II of the exam, but it struggled with Level III, due to the essay questions.
The new study was developed by researchers from New York University Stern School of Business and GoodFin, an AI-powered wealth-management platform.

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For humans to pass the prestigious, three-part chartered financial analyst exam, it typically takes around 1,000 hours of studying over the course of several years. New research found that the technology underpinning a slew of artificial intelligence models is now advanced enough to pass even the most difficult – Level III – mock exams in a matter of minutes.
The new study – developed by researchers from New York University Stern School of Business and GoodFin, an AI-powered wealth-management platform – evaluated 23 large language models on their ability to answer multiple choice and essay questions on mock CFA Level III exams. They found frontier reasoning models, including o4-mini, Gemini 2.5 Pro, and Claude Opus, were able to use “chain-of-thought prompting” to successfully pass.

Previous research, particularly from two years ago, had found AI could clear Levels I and II of the exam, but it struggled with Level III, due to the essay questions. However, the technology has evolved so rapidly that the researchers wanted to know whether the models could handle, “specialized, high-stakes analytical reasoning required for professional financial decision-making.” The third CFA exam is primarily focused on portfolio management and wealth planning.
“I think there’s absolutely a future where this technology transforms the industry,” said Anna Joo Fee, founder and CEO of GoodFin, which contributed to – but did not pay for – the research.
Still, Fee said she does not think the AI will ultimately replace the CFA.
“There are things like context and intent that are hard for the machine to assess right now,” Fee said. “That’s where a human shines, in understanding your body language and cues.”

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Fed Chair Jerome Powell said that weakness in the labor market is outweighing concerns about stubborn inflation, leading to a decision to lower the central bank’s key interest rate last week.
“This policy stance, which I see as still modestly restrictive, leaves us well positioned to respond to potential economic developments,” he added in a speech delivered in Rhode Island.
Powell is presiding over a Fed that has come under intense criticism from the White House and is seeing an unusually wide dispersion in views among officials.

U.S. Federal Reserve Chair Jerome Powell speaks during a press conference, following the issuance of the Federal Open Market Committee’s statement on interest rate policy, in Washington, D.C., U.S., Sept. 17, 2025.
Elizabeth Frantz | Reuters

Federal Reserve Chair Jerome Powell said Tuesday that weakness in the labor market is outweighing concerns about stubborn inflation, leading to a decision he backed to lower the central bank’s key interest rate last week.
The Federal Open Market Committee’s first cut of the year came amid signs that both supply and demand of workers is waning at the same time that near-term impact from tariffs has pushed inflation higher.

At such times, Powell said, during a speech to business leaders in Providence, Rhode Island, the Fed’s job is to “balance both sides of our dual mandate” for stable prices and low unemployment.
“Near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation,” he said. “Two-sided risks mean that there is no risk-free path.”
The conditions Powell described in the speech are consistent with stagflation, in which growth slows and inflation is high. While the current situation is far less severe than what the U.S. encountered in the 1970s and early ’80s, it nonetheless has presented a policy challenge for the Fed.
Powell, however, said he is comfortable with the central bank’s current policy path though he indicated the possibility of additional cuts should the FOMC see the need to be more accommodative.
“The increased downside risks to employment have shifted the balance of risks to achieving our goals,” he said. “This policy stance, which I see as still modestly restrictive, leaves us well positioned to respond to potential economic developments.”

Stocks took a turn lower during Powell’s presentation as he said during a question-and-answer period that assets are “fairly highly valued.”

Watching jobs, inflation

On the labor market, Powell noted “a marked slowdown” in supply and demand. “In this less dynamic and somewhat softer labor market, the downside risks to employment have risen,” he said.
Indeed, payroll growth has slowed dramatically, averaging below 30,000 during the summer months while benchmark revisions showed nearly a million fewer jobs created in the 12 months prior to March 2025.
At the same time, inflation has cooled substantially since hitting a more than 40-year peak in 2022 but is still considerably above the Fed’s 2% goal. Commerce Department data to be released Friday is expected to indicate that personal consumption prices rose 2.7% on an annual all-items basis and 2.9% when excluding food and energy, Powell said.
Adding to uncertainty is the impact of President Donald Trump’s tariffs. The president continues to negotiate with major U.S. trading partners about the ultimate level for the duties, with a key deadline with China coming up in early November. Fed economists for now are viewing the tariffs as mostly a temporary rise in prices, though that could change.
“Uncertainty around the path of inflation remains high,” Powell said. “We will carefully assess and manage the risk of higher and more persistent inflation. We will make sure that this one-time increase in prices does not become an ongoing inflation problem.”
Powell is presiding over a Fed that has come under intense criticism from the White House and is seeing an unusually wide dispersion in views among officials. The FOMC meeting concluded with participants narrowly split, 10-9, over whether one or two more quarter-point cuts would be appropriate this year. Trump appointee Stephen Miran has pushed for a much more aggressive course, but his term as governor ends in January.
Earlier Tuesday, Governor Michelle Bowman warned about the dangers of moving too slowly to address the labor market. Bowman, also a Trump appointee, said “we are at serious risk of already being behind the curve in addressing deteriorating labor market conditions.”
“I am concerned that the labor market could enter into a precarious phase and there is a risk that a shock could tip it into a sudden and significant deterioration,” she said.
While Powell has not provided his expectations for future rate moves, Bowman said she hopes the recent action is “the first step” in an ongoing move back to a neutral interest rate level.

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Morgan Stanley is months away from offering crypto trading to retail customers through its E-Trade division as the Wall Street giant embraces what it called a transformative moment for the wealth management industry.
The firm is working with the startup Zerohash for liquidity, custody and settlement around crypto trading, according to a memo obtained by CNBC.
“We are well underway in preparing to offer crypto trading through a partner model to E-Trade clients in the first half of 2026,” Jed Finn, head of wealth management at Morgan Stanley, said in the memo.

Morgan Stanley is months away from offering crypto trading to retail customers through its E-Trade division as the Wall Street giant embraces what it called a transformative moment for the wealth management industry.
The firm is working with the startup Zerohash — which Morgan Stanley also took an investment stake in — for liquidity, custody and settlement around crypto trading, according to a memo obtained by CNBC.

“We are well underway in preparing to offer crypto trading through a partner model to E-Trade clients in the first half of 2026,” Jed Finn, head of wealth management at Morgan Stanley, said in the memo.
Morgan Stanley is among the most aggressive of big banks in embracing crypto after the U.S. government’s stance toward the technology flipped with the election of President Donald Trump. Wealth management accounted for nearly half of Morgan Stanley’s total revenue last year, making it more reliant on the industry than its other big bank peers.
The move is the latest sign of crypto adoption by financial incumbents. In an earlier wave about four years ago, banks including Morgan Stanley and Goldman Sachs began offering bitcoin funds to their wealthy clients. That gave clients exposure to the asset class though crypto firms including Galaxy Digital that managed the funds.
But what Morgan Stanley is doing now is preparing to offer direct ownership of crypto, which cuts out some third-party management fees and comes with greater risks. Morgan Stanley will first offer bitcoin, ether and solana trading, according to Bloomberg News.
Morgan Stanley is preparing for a future in which wealthy clients expect to see traditional and digital assets managed in the same environment, Finn said in the memo.

The bank is working on a wallet that will allow it to be the custodian for clients’ digital assets, a key part of its overall strategy, he said.
“Offering clients the ability to trade crypto is the tip of the iceberg,” Finn said.

Tokenized assets

The bank expects to help clients hold not just crypto, but also tokenized versions of traditional financial assets, according to the memo.
Tokenization — or creating a digital representation of assets including cash, stocks, bonds and real estate on a blockchain — will “significantly disrupt” the wealth management industry, Finn said.
“Tokenized substitutes for cash begin paying interest as soon as it hits the wallet,” Finn said. “The rest of the asset classes will follow suit in seeking this efficiency.”
“We see immense power in the cryptocurrency space, not just with crypto as an investment for our clients, but also around DLT and tokenization more broadly,” he said, using the acronym for distributed ledger technology, the concept underpinning blockchain.

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Chicago Fed President Austan Goolsbee expressed caution about lowering interest rates as the U.S. economy grapples with the forces of slower growth and a weaker labor market.
“With inflation having been over the target for 4½ years in a row and rising, I think we need to be a little careful with getting all really up-front aggressive,” he told CNBC.

Chicago Federal Reserve President Austan Goolsbee expressed caution Tuesday about lowering interest rates as the U.S. economy grapples with the forces of slower growth and a weaker labor market.
While he joined the rest of the Federal Open Market Committee last week in voting to cut the central bank’s key borrowing rate, he told CNBC that further moves would depend on economic progress.

“I’m OK with moving to be in a better spot, and I think eventually, at a gradual pace, rates can come down a fair amount if we can get this stagflationary dust out of the air,” he said during a “Squawk Box” interview. “But with inflation having been over the target for 4½ years in a row and rising, I think we need to be a little careful with getting all really up-front aggressive.”
The FOMC voted 11-1 to lower the federal funds rate to a range of 4%-4.25%, the first easing this year. Committee members have worried about the impact that tariffs will have on prices. While inflation has stayed above the Fed’s 2% target, the pace of price increases has accelerated only modestly since the tariffs came on line in April.
Much of the Fed’s calculus comes down to finding the “neutral” rate that neither boosts nor restricts growth. Projections released following the meeting show the committee thinks that the neutral level would be consistent with a funds rate around 3.1%, an area where Goolsbee said he feels “comfortable.”
That in turn would imply bringing down the benchmark rate another percentage point, which the FOMC “dot plot” indicated would come with two more cuts this year followed by one each in the subsequent two years.
“I think the neutral rate of interest is somewhere below where we are right now,” he said. “If we’re on a path to get inflation back down to where it’s supposed to be, and where we promise we’re going to bring it, I think rates can come down some.”

While inflation numbers will be watched closely, so will the labor market. Recent trends have indicated a substantial softening in hiring, though the unemployment rate of 4.3% is low in historical terms.
The Chicago Fed on Tuesday introduced its own labor market monitor, including a forecast for the unemployment rate as well as other real-time labor statistics. The district’s data indicates the unemployment rate for September will be unchanged.
Goolsbee said the reports will come from 11 different data sets that will compute a jobless rate projection as well as estimates for layoffs and other separations and a rate of hiring unemployed workers. So far, the data is showing “a lot of stability” in the labor market, he said.

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Crypto infrastructure startup Zerohash has raised $104 million in funding with backing from financial firms including Morgan Stanley and SoFi, CNBC has learned.
The round was led by Interactive Brokers, the global automated trading firm, and includes strategic investors who are also clients of Zerohash, founder and CEO Edward Woodford told CNBC.
Zerohash provides banks and fintech firms with the ability to offer blockchain-based products in three major areas: crypto trading, stablecoins and tokenization.

Edward Woodford, founder and CEO of crypto infrastructure firm zerohash.
Courtesy: zerohash

Crypto infrastructure startup Zerohash has raised $104 million in funding with backing from financial firms including Morgan Stanley and SoFi, CNBC has learned.
The Series D round was led by Interactive Brokers, the global automated trading firm, and includes strategic investors who are also clients of Zerohash, founder and CEO Edward Woodford told CNBC in an interview. The company is valued at $1 billion, he said.

“We wanted to raise from the largest, most trusted brands in the world and have that be the bridge into this new technology,” he said.
Funds managed by Apollo also participated in the round, according to Zerohash.
The startup is among a wave of firms, both publicly traded and privately held, taking advantage of the more favorable regulatory environment for cryptocurrencies under President Donald Trump.
After Trump took office this year, the government flipped from being highly skeptical of crypto under former Securities and Exchange Commission Chairman Gary Gensler to embracing it as a nascent technology.
Suddenly, the CEOs of financial firms including Morgan Stanley and Bank of America were expressing confidence that they would get involved. SoFi CEO Anthony Noto told CNBC in April that he was ready to bring crypto trading back after the regulatory shift.

Founded in 2017, Zerohash provides banks and fintech firms with the ability to offer blockchain-based products in three major areas: crypto trading, stablecoins and tokenization, according to Woodford.
“Part of this raise is obviously accelerating [adoption] across all three of those verticals with a range of customers who are also investors,” he said.
Interactive Brokers already uses Zerohash for crypto trading and custody and will launch a stablecoin product with the firm, Woodford said.
While Woodford said he couldn’t comment on whether Morgan Stanley and SoFi were also clients, he suggested announcements will be coming. Spokespeople for Morgan Stanley and SoFi declined to comment.
“These groups aren’t VCs,” Woodford said. “You can assume that there’s obviously a couple of announcements coming down the road with these other investors.” More

Eric Jackson, a hedge fund manager who partly contributed to the trading explosion in Opendoor, unveiled his new pick Monday — Better Home & Finance Holding Co. Jackson said his firm holds a position in Better Home but didn’t disclose its size.
Shares of Better Home soared 46.6% on Monday after Jackson touted the stock on X. At one point during the session, the stock more than doubled in price. The New York-based mortgage lender jumped more than 36% last week. Better Home’s market capitalization was a little more than $500 million as of Friday’s close, according to FactSet data.

The EMJ Capital president and founder called Better Home “the Shopify of mortgages” and said the company is rebuilding a $15 trillion industry from scratch using artificial intelligence. Shopify is a Canadian e-commerce platform.

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Better Home & Finance Monday

Jackson noted that newly public blockchain lender Figure Technology Solutions has a much higher multiple that Better Home.
“$FIGR just IPO’ed & trades at 19× 2026 sales. BETR trades at just 1× — but is growing faster than FIGR,” he said. “I believe BETR is a potential 350-bagger in 2 years. They laugh at BETR now at $34 like they laughed at CVNA at $3.50 and OPEN at 51¢. But this is no meme.” More