Traders stick to bets on September Fed rate cut after inflation report
The market-priced probability of a Fed interest-rate cut by September remained around 60% after the Bureau of Labor Statistics reported that the consumer price index rose 2.7% in June from a year earlier, and underlying inflation was up 2.9%.
Traders continue to see just a 5% chance of a rate cut this month, with Fed policymakers mostly saying they want to see more data before reducing rates.
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The Independent
13 minutes ago
- The Independent
Delta's AI pricing — good or bad? Experts give their verdicts (and it's not great news for business-class fliers)
Delta Air Lines has revealed that it wants 20 percent of flights to be priced using AI by the end of the year, up from three percent presently. Ultimately, it wants all flights to be ticketed using artificial intelligence. What does this mean for passengers? We asked financial and travel experts, from a frequent flier to a former Walmart and Amazon pricing analyst, for their take on what the move will mean for prices and consumer trust in Delta. And one thing is clear. It's a hot debate. Here we explain how AI pricing works, plus the good, the bad and the potentially ugly of the system, including why business-class passengers, in particular, should be concerned. How will Delta's AI pricing work? Think of AI pricing as taking dynamic pricing, which is already around, to the next level. Sean Cudahy from The Points Guy explains: "We've all searched a flight, found a price, and come back the next day to see that it's spiked by $100. Or, maybe, you got lucky and it dropped by $50. Expect more of that. "Delta says its AI pricing tool amounts to a 'super-analyst' working around the clock. Expect that super analyst to constantly be calculating what it would take to get a passenger to book a seat, or what price point it could raise a fare to, to maximize profits without risking the seat going unsold." Delta's system is supplied by Israeli start-up Fetcherr, which will set the fare and the number of seats offered at that fare for each shopper in near real time. Nabeel Siddiqi, CEO at Price Perfect, likens it to the way merchants in markets of old would "read" a customer and charge based on what they think the customer could afford. The pros for passengers Gonzalo Vazquez, CEO Airlines AI Studio at Globant, applauds the move, telling The Independent that it "reflects a broader shift in the industry toward personalized pricing, using AI to better match fares to individual customer preferences and willingness to pay". He adds: "By moving away from rigid, legacy pricing structures, Delta is embracing a more modern and dynamic retail model that can benefit both the airline and the passenger. "Airlines have long relied on outdated systems that limit flexibility and responsiveness to real-time market signals. "Embracing AI-driven pricing allows Delta to innovate in how value is offered and perceived, bringing the airline closer to modern retail practices seen in other industries." He argues that AI pricing will mean a shift for passengers towards "more tailored options, potentially unlocking better deals for those who are price-sensitive while giving others the ability to pay for added value or convenience". In short, he says, it "opens the door to more flexibility in how travel is packaged and sold". Philip Carls, board member at Priceagent and former pricing lead at both Walmart and Amazon, agrees that there are positives. He says: "There may be lower prices for some customers. For instance, budget-conscious travelers may see discounted fares to incentivise bookings, and frequent fliers could get exclusive discounts or upgrades, with some customers benefitting from dynamic deals if Delta uses data to offer last-minute discounts to fill seats." The cons for passengers "Business travelers should pay attention," says Sam Hollander, Co-Founder at Autopilot. "If Delta's AI knows you consistently book premium cabins and expense through corporate accounts, why wouldn't it test higher price points? The algorithm will identify customers with lower price sensitivity and adjust accordingly." Nabeel Siddiqi remarks that this could cause a headache for Delta. He explains: "Customers who could afford more will end up paying a higher amount, which they won't be happy about. This can be a PR nightmare due to annoyed customers who feel taken advantage of." Vaclav Vincalek, CTO at Hiswai, shares these concerns, remarking that "as flashy and trendy as the announcement is, one should consider the emotional impact on customers when they find out that for the same row and aisle seat, somebody paid 20 percent less". He adds: "Imagine being in a grocery store and learning that you just paid $5 for a carton of milk that the person in front of you got for $4." Trust issues Several experts stressed that AI pricing could fuel mistrust in Delta. Andrew Romanyuk, Co-Founder, SVP of Growth at Pynest, said: "The worry is that it becomes another black box. If people don't understand what's going on, they'll just assume the worst. Is it because they waited too long? Because they booked from an expensive zip code? Because the algorithm thinks they have more money? "AI pricing isn't bad in itself. But unless it's done with some empathy for the passenger, it's going to feel shady, even if the math checks out." Robin Anderson, Head of Product Management, Tribe Payments, said: "The challenge is to make AI a tool for better experiences, not confusion. "That means clear pricing logic, transparency, and a smooth payment journey. Trust is a fragile commodity in travel. "If Delta can roll this out with clarity and control, it could set a new standard for how we book flights. If not, 'intelligent' pricing could quickly start to feel like unpredictable pricing, and that's when trust breaks down." Is there a way to sidestep AI pricing? Yes. Sam Hollander said: "Airlines track you through browser cookies even when logged out. Using incognito mode and a VPN [virtual private network] creates a fresh digital fingerprint, potentially helping you avoid being flagged as a high-value customer who might pay premium prices." The result for Delta? Happy Delta shareholders will be the upshot from the AI revolution, it's argued. Sean from The Points Guy says: "This tool will predict and monitor supply and demand trends, predict how much it can charge a customer for a ticket without risking losing that customer and predict how much it might need to discount a seat to avoid that seat going empty ('spoiling inventory' in airline parlance). "If this tool makes Delta more effective in those tactics, I imagine the shareholders will be happy."
The Independent
13 minutes ago
- The Independent
House votes on trio of cryptocurrency bills aimed at legitimizing the industry
The House is voting on a trio of bills Thursday intended to boost the legitimacy of the cryptocurrency industry with new regulations as President Donald Trump has pushed to make the U.S. the ' crypto capital of the world.' One of the bills, which would regulate a type of cryptocurrency called stablecoins, has already passed the Senate with broad bipartisan support and will head to Trump's desk if it passes the lower chamber. The other two — legislation to address cryptocurrency market structure and a bill to prohibit the Federal Reserve from issuing a central bank digital currency — have yet to be passed in the Senate. The stablecoin bill sets initial guardrails and consumer protections for the cryptocurrency, which is tied to a stable asset, often the U.S. dollar, to reduce price volatility. It passed the Senate with bipartisan support in June. 'Around the world, payment systems are undergoing a revolution,' said House Financial Services Chair French Hill of Arkansas as lawmakers debated the stablecoin legislation Thursday morning. Hill said the bill will 'ensure American competitiveness and strong guardrails for our consumers.' After Trump declared it 'crypto week,' the bills were stalled for more than a day amid disagreements among House Republicans about how to combine the legislation. In the end, GOP leaders put the three bills for a separate vote, leaving the fate of the other two bills unclear. The internal dissent could foreshadow challenges ahead for the more sweeping crypto legislation that Trump has demanded and the industry has poured millions into advancing. The stablecoin measure is seen by lawmakers and the industry as a step toward adding legitimacy and consumer trust to a rapidly growing sector. Treasury Secretary Scott Bessent said in June that the legislation could help that currency 'grow into a $3.7 trillion market by the end of the decade.' The bill outlines requirements for stablecoin issuers, including compliance with U.S. anti-money laundering and sanctions laws, and mandates that issuers hold reserves backing the cryptocurrency. Without such a framework, Republicans on the Senate Banking Committee in a statement warned, 'consumers face risks like unstable reserves or unclear operations from stablecoin issuers." Despite some bipartisan support, the bill faced pushback as it made its way through Congress. Democrats felt that it did little to address Trump's personal financial interests in the crypto space. 'No one should be surprised that these same Republicans' next order of business is to validate, legitimize, and endorse the Trump family's corruption and efforts to sell the White House to the highest bidder,' said California Rep. Maxine Waters, the top Democrat on the Financial Services panel. A provision in the stablecoin bill bans members of Congress and their families from profiting off stablecoins. But that prohibition does not extend to the president and his family, even as Trump builds a crypto empire from the White House. In May, the Republican president hosted a private dinner at his golf club in Virginia with top investors in a Trump-branded meme coin. His family holds a significant stake in World Liberty Financial, a crypto project that launched its own stablecoin, USD1. Trump reported earning $57.35 million from token sales at World Liberty Financial in 2024, according to a public financial disclosure released in June. A meme coin linked to him has generated an estimated $320 million in fees, though the earnings are split among multiple investors. Some Democrats also criticized the bill for creating what they see as an overly weak regulatory framework that could pose long-term financial risks. They've also raised concerns that the legislation opens the door for major corporations to issue their own private cryptocurrencies. 'If this bill passes, it will allow Elon Musk and Mark Zuckerberg to issue their own money. The bill still permits Big Tech companies and other conglomerates to issue their own private currencies,' said Massachusetts Sen. Elizabeth Warren, the top Democrat on the Senate Banking Committee. ___
The Independent
13 minutes ago
- The Independent
Juul will be allowed to sell e-cigarettes ending long fight over flavored tobacco on store shelves
Vaping brand Juul Labs can continue to sell its e-cigarettes and refill cartridges, the Food and Drug Administration announced Thursday. The decision comes after the company struggled for years against heightened regulatory scrutiny and intense backlash as the brand's flavored pods became popular amongst young people, contributing to the rise in teen vaping. Despite this, the FDA ruled that Juul's studies show its e-cigarettes are less harmful for adult smokers, who can benefit from switching from cigarettes to vaping. The decision applies to both tobacco and menthol-flavored versions of the e-cigarettes, which are used with nicotine-filled cartridges sold in two different strengths. 'This is an important milestone for the company and I think we made a scientifically sound case for the role that menthol can play in e-vapor,' Juul CEO K.C. Crosthwaite told The Associated Press. Ahead of the decision, Juul attempted to drive away some of its teen consumers by discontinuing several fruit and candy flavors that were favored by that demographic. The FDA had ordered the company to remove its products from the market in June 2022, but quickly changed course after Juul pushed back in court. The announcement is also not an approval or endorsement of Juul's products, and the FDA reiterated that people who do not smoke should not use Juul or any other e-cigarettes.
