Finance

Criminal investigations do not usually start with tweets. They very rarely start with tweets by government officials asserting someone’s guilt before a charge has even been laid. That, however, is how the case against Lisa Cook, a governor of the Federal Reserve, began on August 20th, when Bill Pulte, head of the Federal Housing Finance Agency, published a letter alleging that Ms Cook had “falsified bank documents and property records to acquire more favourable loan terms, potentially committing mortgage fraud”. Mr Pulte then tweeted a screenshot showing her signature on two documents. It is on the basis of this evidence that President Donald Trump sought to sack Ms Cook on August 25th. She has refused to resign; the courts will consider what is required to remove a Fed governor “for cause”. More

It is not hard to see why Jamie Dimon owns a lot of shares in JPMorgan Chase. He is the bank’s boss and its shareholders want his interests to be aligned with theirs. Paying him mostly in stock, rather than cash, helps ensure that they are. An executive with a significant proportion of savings invested in their firm’s shares has tied their future to the company’s. This discourages them from doing things that might pad their wallets in the short term at the expense of shareholders’ long-term returns, such as expanding the firm unsustainably fast. The incentives are stronger still if—as with Mr Dimon—the boss is promised shares for delivery some time hence, or if any sales prompt newspaper headlines. More

New York Fed President John Williams on Wednesday stressed the importance of central bank independence as President Donald Trump looks to exert control over monetary policy.
“We know from history that independent central banks can deliver low inflation, economic and financial stability,” Williams said in a CNBC interview.

New York Federal Reserve President John Williams on Wednesday stressed the importance of central bank independence as President Donald Trump looks to exert control over monetary policy.
In a CNBC interview, the influential policymaker avoided commenting directly on Trump’s efforts to fire Fed Governor Lisa Cook, but did note the important economic role the central bank plays in maintaining a stable economy.

“Personally, I have worked with Lisa Cook as she’s been a member of the Board of Governors, and she’s always brought integrity and commitment to the central bank’s mission,” Williams said during the “Squawk Box” interview. “I think Federal Reserve central bank independence is very important. … We know from history that independent central banks can deliver low inflation, economic and financial stability.”
During the first year of his second term, Trump repeatedly has pushed against the traditional barrier that has stood between the quasi-governmental Fed and influence from the White House and Capitol Hill.
The president has berated Fed Chair Jerome Powell and his fellow officials for not lowering interest rates. Previously, he has toyed with the idea of sacking Powell before eventually deciding to take on Cook, who faces accusations that she committed mortgage fraud before she became a board member.
Williams said that battle will have to play out in the courts.
“The structure of the Federal Reserve is such that it’s designed to have independent policymakers who are making decisions; longer decisions affect the economy over the longer term, away from short-term political pressure,” he said. “I think that’s really, really important.”

As far as the near-term direction of policy, Williams said it’s likely the Fed will be reducing rates, but he provided no timetable on when that might happen. Markets strongly expect that Federal Open Market Committee, where Williams serves as vice chair and a permanent voting member, will resume lowering its benchmark interest rate in September after spending the year on hold. The current fed funds rate stands at 4.25% to 4.50%.
Williams said he generally views the U.S. economy as strong if slowing a bit, and called the labor market “solid,” a term that many of his colleagues also have been using lately.
“If things move in the way that I hope they do in terms of our maximum employment and price stability goals, then I do think it will be appropriate to move interest rates down over time,” he said. “But we’ve got to be driven by the data.”
Powell said last Friday that he expects rates to come down as well, but also did not specify a time frame. More

The Economist is seeking promising journalists and would-be journalists to apply for our Marjorie Deane internship. Successful candidates will spend six months with us writing about economics and/or finance, and will be paid. The start date is flexible and no experience is required.Applicants should send a CV and an original article of no more than 600 words suitable for publication in the Finance & economics section. These should be sent to [email protected] by October 15th. More

Some affluent consumers are planning trips to Europe to buy luxury goods, with the goal of bringing them back tariff-free.
Watchmakers in Switzerland and fashion boutiques in France and Italy are among the most sought after, travel advisors said.
There are caveats to the strategy, experts said. For one: Travelers are supposed to declare items purchased abroad to customs agents when reentering the U.S., at which point they’d likely owe taxes.

Visitors and salesmen stand at the booth of Swiss luxury watchmaker and jeweler Piaget, during the “Watches and Wonders Geneva” luxury watch fair, on April 1, 2025.
Fabrice Coffrini | Afp | Getty Images

Jamie and her husband are traveling to Switzerland in December for a ski vacation. But hitting the slopes isn’t the only motivator: The couple say they are also trying to sidestep steep U.S. tariffs on Swiss goods.
They intend to buy a luxury watch — a Patek Philippe Nautilus — from the watchmaker in Geneva, Jamie said, as a present for her husband’s birthday.

Their budget for the watch: $50,000 to $75,000.
If successful, buying abroad may save them many thousands of dollars relative to purchasing an imported Swiss timepiece. The Trump administration on Aug. 7 imposed a 39% tariff on Switzerland, among the highest rates in the world.
The couple say they had been thinking of a ski getaway in the Swiss mountains for some time. But the possibility of scoring a Patek watch at a hefty tax discount “was a motivator and added bonus,” said Jamie, a 42-year-old New Yorker. (She asked to use only her first name for privacy reasons.)
Interest among the affluent to travel for tariff-busting shopping sprees has spiked in recent weeks, said Erica Jackowitz, a travel advisor to wealthy clientele.

Switzerland — which is home to other high-end watchmakers like Rolex, Piaget and Audemars Piguet — is the top destination, she said.

Other European nations like France and Italy, where renowned fashion brands like Hermès and Prada are based, have also emerged as hot spots, Jackowitz said.
The European Union faces a 15% U.S. tariff on most goods. That levy also took effect in August. (Switzerland is not part of the EU.)
The specter of European tariffs has persisted since April, when President Donald Trump initially announced “reciprocal” tariffs on the EU and Switzerland (among more than 100 other countries) before delaying them.

‘Every dollar counts’

A Christian Dior luxury store in Paris on July 22, 2025.
Cyril Marcilhacy/Bloomberg via Getty Images

Tariffs add a new wrinkle to a well-worn concept: traveling abroad with an eye to discounts.
Many people travel to take advantage of favorable exchange rates, for example. And many Americans booked trips to Europe for Taylor Swift concerts in 2024, finding it more cost-effective to pay for airfare, hotel rooms and concert tickets abroad than to see the artist at home.
“That really set off people’s mindsets that you can get things at better prices in different places,” said Jack Ezon, a luxury travel advisor based in New York.
He’s seen the share of shopping-centric trips among his clientele jump 48% this summer relative to 2024.
Italy, Milan, Paris and Madrid have been the top destinations, said Ezon, founder and managing partner of Embark Beyond. Fashion and watches are the top draws, he said.
“Every dollar counts when you’re getting these kinds of tariffs,” Ezon said.

Take the example of an imported Rolex as an illustration of potential cost savings, according to an analysis by FlavorCloud, a cross-border logistics firm.
A Rolex Lady-Datejust watch in Oystersteel and Everose gold retails for $11,300, before taxes. After tariffs, the same watch is estimated to cost about $15,700 — or $4,400 more, according to the FlavorCloud analysis.
The analysis assumes the tariff cost is passed to the end consumer. Many economists believe companies will pass on at least some of the cost.
Rolex spokesperson Virginie de Meuron declined to comment.
The price tag for luxury Swiss watches can sometimes swell to $500,000 or more — in which case the potential tariff savings can be huge, Jackowitz said.
Any ultimate savings may depend on factors like an item’s country of origin and duties that may have already applied before reciprocal tariffs took effect, trade experts said.

‘There is no way around that’

Celal Gunes/Anadolu via Getty Images)

Of course, the gambit could backfire.
Travelers must declare any items they acquire abroad and bring back to the U.S., according to U.S. Customs and Border Protection.
In other words, travelers aren’t supposed to keep their purchases a secret — at which point that Swiss watch or French handbag could be hit with tariffs. Total duties would depend on factors like where a particular good was acquired and manufactured, and what it’s made of.
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While there are exemptions from customs duties in certain cases, especially for lower-value items, high-priced luxury goods would likely be treated exactly the same as if shipped: subject to all normal import costs including duty, tax, tariffs and fees, according to trade experts.
“A $4,000 handbag, a $10,000 watch, you will have taxes you need to pay and they will be assessed at the border based on the declaration,” said Rathna Sharad, co-founder and chief executive officer of FlavorCloud.
“There is no way around that,” she said.

Person walking past the Patek Philippe boutique on Rue du Rhône on Aug. 2, 2025 in Geneva, Switzerland.
Robert Hradil | Getty Images News | Getty Images

Ezon and Jackowitz, the travel advisors, are aware of this potential snafu, and say they tell travelers they should declare their purchases. Failure to do so could risk penalties like fines, forfeiture of the item and losing membership in the Global Entry program from U.S. Customs and Border Protection.
But customs agents do have some discretion to levy tariffs or not, trade experts said. From a practical standpoint, it’d also be hard for agents to ascertain if clothing or jewelry worn by a traveler was indeed a new purchase overseas, they said.
Each traveler gets a personal exemption that allows them to bring back $800 worth of items duty-free, according to a U.S. Customs and Border Protection spokesperson. The exemption is $1,600 from the U.S. Virgin Islands, American Samoa and Guam.
Families traveling together can combine these exemptions, the CBP spokesperson said. Duties on watches and other items are calculated based on the Harmonized Tariff Schedule, considering components like the movement, case and strap, they said.

The value of buying overseas

Travel agents and customs experts say there are still merits to buying European luxury goods overseas, even if they are slapped with tariffs upon reentry to the U.S.
Largely, that’s because of refunds that American travelers can get on the area’s value-added tax.
The upshot for travelers: That VAT refund can be hefty, often more than 15%.
Getting a VAT refund yields a double benefit, Sharad said: Americans get a discount courtesy of that refund, and also reduce any customs-related tax bills (because the tax would be owed on a lower declared value).
Additionally, the base rate for merchandise is often cheaper overseas, Ezon said.

An artisan works in the Montex workshop at the Chanel SA 19M campus in Aubervilliers, France, on Jan. 20, 2022.
Benjamin Girette/Bloomberg via Getty Images

Travelers should be aware that there are certain steps to take to claim a VAT refund, experts said.
For example, the retailer will need to provide a refund form at the point of sale to travelers, who generally need to have their passports handy. Travelers will then need to process the refund; these designated processing services are generally available at airports upon departure, experts said.
From a financial standpoint, potential savings — whether on the VAT or tariffs — would need to outweigh the overall cost of a trip to justify it.

But travel advisors are also planning experiences around the shopping.
Jackowitz, for example, is putting together a shopping-focused trip to Paris for a client and bundling a visit to La Galerie Dior into the itinerary.
For the New York couple traveling to Geneva, getting an appointment at Patek Philippe to try on different watches — along with the ski vacation — was part of the allure.
“The ability to be able to get the watch that we want at a significant discount to what it’d cost us in the U.S., and have the experience of the trip and the day of getting the watch — the combination of those things is what pushed us over the edge,” said Jamie.
“I imagine it’ll be a lot of fun.”

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For Chinese investors, the grass is almost always greener elsewhere. The country’s stockmarket chronically underperforms, meaning that local punters look to bourses in, say, America or Japan, and devise ways of getting cash around China’s capital controls. But this year is different. The Shanghai Composite, an index for China’s domestic market, hit a ten-year high on August 25th. It is up by 36% since the start of the year, ahead of both America’s S&P 500 and global indices. More

Wall Street’s largest firms are championing a new cause. They are bringing alternative assets — once reserved for the ultra-wealthy — to the portfolios of individual investors. Chief among the proponents are BlackRock and Goldman Sachs. But, as is usually the case in investing, the potential of greater returns comes at a risk. “The alternative market is becoming less alternative,” said Jon Diorio, head of alternatives for wealth at asset management giant BlackRock. Alternatives are assets outside of stocks, bonds, and cash — including private equity, private credit, real estate, infrastructure, cryptocurrencies, and more. “It’s growing very rapidly as public markets are shrinking,” Diorio told CNBC in a recent interview. Interest has been fueled by shrinking public market opportunities and a softening regulatory environment. President Donald Trump signed an executive order earlier this month that paved the way for alternative assets in 401(k) retirement accounts — an idea vehemently opposed by the Biden administration. Diorio, who also leads product strategy for BlackRock’s U.S. wealth advisory business, said that giving more investors exposure to alternatives — which have traditionally been part of the portfolios of ultra high net-worth individuals, hedge funds, and pension funds — can improve returns over the long run. “In some cases, you can get enhanced diversification [and] amplify return streams,” he added. Giving individual investors the same access to different asset classes as the pros has been championed as further democratizing Wall Street. However, it also comes with its own risks. These assets are not publicly traded, which means they are more difficult to value and less liquid. BlackRock’s Diorio and peers at other major financial firms are acutely aware of this and strive to make sure investors are, too, as they challenge the decades-old focus on the traditional retail portfolio split of 60% stocks and 40% bonds. Marc Nachmann, head of the asset and wealth management division at Goldman, explained the risk dynamic in a recent CNBC interview , noting that “you actually get paid for the fact that [these] are illiquid and [that] you can’t take your money out all the time.” The inclusion of alternative assets, he said, is well-suited for investors with longer-time horizons or those who do not need to access their money right away, such as retirement savers. “Think about a 401(k). When you’re 24 years old and you graduate from college and you start your first job and you start putting your first real dollars into a 401(k) fund, those are exactly the dollars that you should put into something that pays you for being locked up for a period of time, for being illiquid. Because at 24, you’re not going to access that liquidity for decades,” Nachmann said. So, it’s no wonder the defined-contribution market has been a key part of Wall Street’s push to make the opaque asset class more accessible. In July, Goldman’s asset-management arm announced a private credit product for retirement plans. The new vehicle is structured to offer exposure to a diverse mix of private investments, which includes North American and European direct lending. The product is set up as a collective investment trust (CIT), which is designed for defined-contribution plans such as 401(k)s. Great Gray Trust, a private equity-backed CIT specialist, and BlackRock will help support these offerings. It’s the natural next step for Goldman in mixing public and private markets, according to Nachmann. After all, many large pension funds are already invested in alternatives. Goldman is starting the effort with target date funds, which manage the risk/reward using an investor’s estimated retirement year to strategically adjust risk allocations. These funds usually start with higher allocations to stocks, but as investors approach retirement, exposure becomes more conservative to protect the nest egg. Before the Goldman announcement, BlackRock was tapped to underpin Great Gray’s first target date retirement fund, which allocates across both public and private markets. BlackRock will help to provide a long-term custom investment strategy that includes private credit and private equity exposure as well. While potentially giving investors a shot at higher returns, the push into alternatives also offers a financial windfall for Goldman and BlackRock over time. The newly announced Goldman product generates fees for the company on the alternative assets that people invest in. The fee structure, expected to be around 1% of assets, will be a consistent source of revenue for Goldman that grows as the effort gains traction and more retirement plans adopt it. The vehicle gives Goldman more room to expand its asset and wealth management division, its second largest by revenue, as well. It does this by tapping into the growing defined contribution market, which already holds trillions and trillions of dollars in assets. By making private credit more accessible to millions of retirement savers through products like target date funds, Goldman is tapping into a wider client base that was once largely limited to institutions and the extremely wealthy. To be sure, Goldman’s crown jewel has long been its investment banking division. However, these revenue streams from advising on initial public offerings (IPOs), as well as mergers and acquisitions (M & A), can be unpredictable depending on the economic backdrop and Wall Street’s dealmaking appetite. Conversely, a lot of revenue streams from asset and wealth management businesses can be recurring as they are a percentage of a firm’s assets under management, which tends to be more stable. The promise of diversifying revenues is a key reason why Goldman and other major financial firms are growing their wealth management divisions. BlackRock’s overall business mix differs from Goldman’s, however, because it does not engage in investment banking. BlackRock is the biggest asset management firm in the world, providing all kinds of investment options — including mutual funds and exchange-traded funds (ETFs), and alternative asset products, just to name a few. Money managers like BlackRock and Goldman’s wealth arm can also typically charge a higher amount to manage alternatives because they’re more complex. “From the economic impact of it, it opens up a massive opportunity for growth, and it should be accretive to their base fee rate,” TD Cowen analyst Bill Katz said of BlackRock, in particular. “It should be very good for their revenues.” We agree. “For BlackRock, alternatives generate higher fees than traditional index funds, which have become commoditized and with expense ratios essentially in a race to the bottom,” said Jeff Marks, the Investing Club’s director of portfolio analysis. Wall Street firms are making alternative assets available through more than just the retirement channel. Apollo Global and State Street Global Advisors , for example, have developed a private-credit ETF that debuted on the New York Stock Exchange back in February. BlackRock is making strides beyond retirement too, specifically within its wealth business, which accounted for a quarter of its overall revenues last year. In March, management unveiled plans to make it easier for advisors to offer their clients exposure to private assets. BlackRock included private credit into its model portfolios business, which Diorio said helps take out the “cumbersome” and “less convenient” parts of allocating to the market. Diorio explained that the announcement addresses a barrier to entry for many investors in private markets because a lot of them invest based on the product itself, rather than considering the entirety of their portfolio. “What I mean by that is somebody would buy a potential non-traded [business development company] private credit fund because it yields 10%, not because it improves the risk-adjusted returns in the portfolio,” he added. “They’re typically choosing it on its product basis, [meaning] who’s the manager, what’s the narrative of the product, and how much does it yield. They’re thinking about it less from a portfolio construction standpoint.” Now, advisors using BlackRock’s custom model portfolios can offer clients across the wealth spectrum different ones to choose from, rather than going through the arduous process of selecting individual investments themselves. Private assets account for 15% of the investments in these portfolios on average, according to BlackRock. “We are now delivering basically a whole portfolio where the client can come in and actually choose,” he said. “We have a private equity fund that goes into the equity sleeve of that portfolio. We have a private credit fund that fits into the fixed income sleeve. We make the integration of that easier.” But education around the risk/reward dynamic of investing in alternatives is paramount. Everyone wants to avoid what happened when Blackstone offered a wider client base exposure to alternatives in years past. In 2017, Blackstone rolled out a real-estate fund, which has commonly been geared towards institutions like pension funds, to individual investors for an opportunity to own a piece of assets like warehouses, data centers, and apartment buildings. The fund’s net asset value ballooned and performed extremely well when interest rates were low, but it turned a corner in 2022 once the Federal Reserve started aggressively hiking rates from the near 0% levels of the Covid pandemic-era. Real estate prices fell. Unnerved investors wanted to pull their money out in large swaths as a result, causing management to temporarily limit withdrawals. Blackstone, however, has consistently denied any wrongdoing in the matter. Katz said the debacle provided a “painful” yet “good learning experience” for Blackstone and its peers moving forward. “That created a lot of pressure on Blackstone and the industry at large around this whole construct,” Katz added. “[But], I think the investment community now is far more understanding. The education process is far better as well.” CNBC reporter Hugh Son highlighted a more recent example last week amid the troubles facing startup Yieldstreet, whose stated mission is to democratize access to alternative assets such as real estate, litigation proceeds, and private credit. Yieldstreet told CNBC that some of its real estate funds were “significantly impacted” by rising interest rates and market conditions. According to clients who spoke to CNBC, these investments were much riskier than they thought, leading to huge losses in their portfolios. “If you were to start adding things that are not publicly traded, like private equity, private credit, private real estate, a lot of these things are not marked to market,” said Sam Stovall, chief investment strategist at CFRA Research. “You don’t see on a daily basis what they’re worth. When you get your quarterly review statements from your 401(k) administrator, it might be misleading because it could be a quarter behind.” Stovall told CNBC that “having alts available is good, but requiring the investor to fully understand them and their [risk tolerance] is very, very important.” Regardless of the risks, this trend is not expected to die out anytime soon. In fact, Stovall expects the assets under management for alternative assets to “grow dramatically” over the next ten years as individual investors increase their exposure. For his part, Katz described money managers’ offering private assets to more clientele as “more commonplace than not” in the future. (Jim Cramer’s Charitable Trust is long GS, BLK. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

President Donald Trump’s attempt to fire Fed Governor Lisa Cook will likely end up before the Supreme Court, Wall Street economists and analysts say.
The Federal Reserve Act allows presidents to remove Fed governors “for cause,” but the statute is ambiguous about what this means.
If Trump successfully ousts Cook, he would be on a path to gain a Fed majority and reshape the Federal Open Market Committee, giving him more influence over rates.

The U.S. Supreme Court is shown March 17, 2025 in Washington, DC. 
Win Mcnamee | Getty Images

President Donald Trump’s unprecedented attempt to fire Federal Reserve Board Governor Lisa Cook will likely end up in the hands of the Supreme Court, according to Wall Street economists and analysts.
Trump on Monday evening claimed to fire Cook “for cause” effectively immediately over allegations she made false statements on applications for home mortgages.

It is the first time a president has attempted to fire a Fed governor since Congress established the central bank in 1913, Evercore ISI told clients in a note Tuesday.
“Although we think it could go either way, our guess is that SCOTUS will uphold this move,” Wolfe Research head of U.S. policy and politics Tobin Marcus told clients Tuesday. “The legal protections for the Fed chair and for non-chair governors are the same, so a SCOTUS ratification of this move would sharply erode Fed independence, and even the attempt to fire Cook raises obvious concerns.”

For cause, or not for cause

Cook said she would not leave her post, arguing that Trump had no cause under the law to fire her. Cook’s lawyer Abbe Lowell said Tuesday that they “will be filing a lawsuit challenging this illegal action.”
The case will likely wind its way through the courts and end up before the Supreme Court, Raymond James Washington policy analyst Ed Mills told clients Monday. This is because the Federal Reserve Act gives the president the authority to fire board governors “for cause” but what that means exactly is left ambiguous in the statute, Mills said.

FILE PHOTO: Lisa DeNell Cook, nominee to be a member of the Board of Governors of the Federal Reserve System, testifies during a Senate Banking nominations hearing on June 21, 2023 in Washington, DC.
Drew Angerer | Getty Images

“The alleged mortgage fraud occurred before Cook became Governor, and ‘for cause’ protection is often believed to be limited to causes occurring during one’s tenure in office,” JPMorgan chief U.S. economist Michael Feroli told clients Monday, though he noted that “for cause” removals do not have much precedent.

Trump path to Fed majority

In the near term, Cook will seek an injunction against Trump’s move and the U.S. District Court for the District of Columbia will likely grant her one, Marcus said. This would preserve the status quo at the Fed until the Supreme Court weighs in, the analyst said.
If Trump gets his way and forces Cook out before the year is over, he will be on a path to gain a majority on the Fed’s board before it votes on regional presidents in January, TD Cowen policy analyst Jaret Seiberg told clients on Tuesday. 
Trump’s replacement for Cook would join appointees Fed Vice Chair Michelle Bowman and Fed Governor Chris Waller — and nominee Stephen Miran, who is expected to fill the vacancy left by Adriana Kugler after she resigned earlier this month.
“This matters as the President’s majority could reject the picks from the reserve banks in favor of picks that support lower rates,” Seiberg said. “This would face hurdles, but if it works it would give Trump more influence over the FOMC and interest rates.” More