Gary Siegel

Analysts are unsure what the Federal Open Market Committee will do with monetary policy in 2025. The panel projects two rate cuts, but some analysts expect more, and others see fewer.

"Fed watchers will be parsing Powell's comments for signs that a 50bp rate cut is on the table for September," noted Lauren Saidel-Baker, an economist with ITR Economics. "However, the notoriously tight-lipped chair is unlikely to confirm this, making a 25bp cut the most likely outcome."

The Federal Open Market Committee's Summary of Economic Projections probably won't offer the 130 basis points of cuts next year that the market expects.

The recent bank failures have changed market thinking about the Federal Reserve's next move.

The Trump administration's stance on immigration is causing headaches for some banks, how a tiny black-owned bank is turning to fintech to turn itself around; why banks are rejecting Facebook's offer to share data and more from this week's most-read stories.

Federal Reserve Board Vice Chair Stanley Fischer said he will resign from the Board of Governors on or about Oct. 13.

Bitcoin, Libor and George Orwell

Breaking News This Morning ...Earnings: Citigroup, Wells Fargo, First Republic

Receiving Wide Coverage ...Three-Card Monte: European nations are preparing for life after the European Union and the return to individual currencies, the Wall Street Journal reports, and those outside the EU are looking for defensive measures in case of an unraveling of the coalition. Meanwhile, on the sunny side of the Street, Treasury Secretary Timothy Geithner continued his confidence-building tour of Europe, and Germany sold $5.5 billion, of five-year securities. The Times said Geithner noted the "progress" the French and Germans were making in developing ideas for strengthening Europe. The plan calls for further central supervision of each nation's budget. But dark clouds loom: the Washington Post quoted a senior German official as saying he was not convinced that other nations would back the plan and that he was "pessimistic" there would be a deal by the end of the bellwether summit on Friday. If the euro zone collapses, it would be followed by Europe's banking system, triggering "global economic misery," an article in the Journal based on a JPMorgan Chase report noted. JPMorgan advises hedging exposure to the euro. Another Journal story looked at Poland, which still uses the zloty as its currency and has no troubles. And as far as the banks go, it's all just one more work-around: the Times reports at length on how European banks are playing Three-Card Monte with their bond holdings in a "complex maneuver" to bolster capital levels -- without actually raising additional money. The euphemism for this stunt is 'liability management.' Nice optics on that one, fellas. At least it's legal. It is legal, right? (Notice that in this entire 200-plus word discussion of Europe we haven't once mentioned Britain. There's a reason for that, as the Times suggests.)

Receiving Wide Coverage ...Espresso Love: Mario Draghi could run for President -- except he already has that title at the European Central Bank, where he's taking Frankfurt by storm. The New York Times called the first days of his term "audacious," noting he's presided over an interest-rate cut, signaled a greater willingness to flex the bank's muscles in service of a crisis solution, and turned up the burner under the politicians. Speaking of politicians, that situation continues to percolate, with meetings taking place before a two-day EU summit in Brussels and a meeting of the European Central Bank Thursday. As a European summit to figure out how to solve the European Union crisis nears, President Obama sent Treasury Secretary Tim Geithner to pressure decision-makers, the Wall Street Journal reported, even as markets shook off S&P's warnings on ratings for nations in the EU, as did German Chancellor Angela Merkel. Other officials questioned the timing of S&P's move. Another Journal story looks at various options the countries can take and what they entail. The "Heard on the Street" column suggests S&P had the right idea; treat all the countries the same. And Spain's prime minister-elect Mariano Rajoy is looking for a quick fix to his nation's bank's real-estate loan woes, which may be costly.

Receiving Wide Coverage ...E.U. or P.U.?: Standard & Poor's put Germany, France and 13 other euro-zone nations on review for possible downgrade as French President Nicolas Sarkozy and German Chancellor Angela Merkel set a week-end deadline for the 27 European Union governments to accept mandatory limits on budget deficits. The Post quotes Michael Hood, a market strategist at J.P. Morgan Asset Management, as warning of an EU breakup: "The risk is likely paralysis. You won't even know what people owe you." New York Times, Wall Street Journal, Washington Post

Receiving Wide Coverage ...Diary of Dodd-Frank: Wall Street didn't have a lot of luck in stopping Capitol Hill from imposing restrictions on its activity in the wake of the financial crisis. Now it's stepping up efforts to roll back new laws it doesn't like by challenging them in the court. The latest example came Friday when two industry trade groups-the Securities Industry and Financial Markets Association and the International Swaps and Derivatives Association-sued to block limits on speculative trading. Their suit challenges the Commodity Futures Trading Commission's so-called position limits rule. The New York Times reports that the CFTC adopted the rule in October to cap the number of contracts a trader can hold on 28 commodities and that it is a key part of the Obama administration's efforts to enforce the Dodd-Frank Financial Reform Act. Specifically, the industry lobbies accuse the CFTC in their lawsuit of failing to evaluate the rule's economic impact on Wall Street. (They did not, notably, call for any study of the economic impact on the world economy of Wall Street's derivatives-based implosion.) "The evidence is overwhelming that position limits are, at best, unnecessary and may, at worst, negatively impact commodity markets and users," ISDA chief executive Conrad Voldstad said in a statement. Countered Sen. Carl Levin, liberal Democrat of Michigan, in a retort that summed up what has been obvious for months to even the most casual observers: "The financial industry tried to water down Dodd-Frank before it was enacted, has been trying to chip away at it since it became law, and is continuing that effort." For those involved of all political stripes, the lawsuit's intent is clear-undermine Dodd-Frank's so-called Volcker Rule, which itself aims to curtail Wall Street's speculative activity by restricting proprietary trading and private equity investments. The Wall Street Journal notes that Gibson, Dunn & Crutcher, the firm representing the industry lobbies, successfully represented the U.S. Chamber of Commerce and the Business Roundtable in suing the Securities and Exchange Commission over a new rule that would have allowed investors to more easily oust corporate directors. The so-called proxy access rule was overturned in court, and the SEC decided not to appeal the ruling. The decision incited fear among regulators, and even caused several agencies to re-examine their Dodd-Frank rules, according to the Times. As an indication of how rabidly the Street opposes bids to limit its trading activity, the Wall Street Journal reported in October that industry attorneys were stuck pulling all-nighters following the release by American Banker of a draft proposal of the Volcker Rule. The CFTC's position limit proposal alone has elicited 15,000 comment letters. No letters have been received so far expressing sympathy for sleep-deprived Wall Street lawyers. New York Times, Wall Street Journal

Receiving Wide Coverage ...Bad News Banks: About one of every three banks cut their work force last quarter, leading to the smallest industry growth in a year and a half. Meanwhile, Standard & Poor's Ratings Services downgraded 37 banks worldwide, including JPMorgan Chase, Bank of America, Citigroup and Wells Fargo here at home. The downgrades were the result of revised rating criteria. The Times noted that of the eight largest U.S. banks under review by S&P, only State Street escaped a downgrade.

Receiving Wide Coverage ...More Bad News for B of A: "Bank of America's board has been told that the company could face a public enforcement action if regulators aren't satisfied with steps taken to strengthen the bank," the Journal reports, citing anonymous sources. Meanwhile, the FT notes that a federal judge's ruling will allow the attorneys general of New York and Delaware to intervene in Bank of America's controversial $8.5 billion mortgage bond settlement. "The action concerns far more than the financial interests of a few sophisticated investors" that agreed to the deal, the judge ruled.

Receiving Wide Coverage ...Occupying the Streets: Thousands of Occupy Wall Street protestors took to the streets of Manhattan, attempting to delay the opening of the New York Stock Exchange and making their presence felt among commuters on the subway trains and Brooklyn Bridge. The "National Day of Action" marked the movement's two-month anniversary and came several days after the demonstrators were evicted from Zuccotti Park. The atmosphere was tense and sometimes violent as some demonstrators clashed with police. A handful of people were injured, and several hundred were arrested. There were similar but smaller marches in other cities across the country, with similar dust-ups. New York Times, New York Post, Daily News (New York), Village Voice, Wall Street Journal, Financial Times

Receiving Wide Coverage ...The Blame Game: MF Global creditors have formed a committee to protect their interests in bankruptcy, the Post said. Meanwhile the "frantic search" continues for the $600 million missing from customer accounts. The Journal reports on allegations that JPMorgan delayed trade settlements by MF Global as it rushed to sell assets. Executives at MF believe that made it difficult to find a buyer, the paper says, and could have “caused” the $600 million gap. In his column, Francesco Guerrera offers three lessons to be learned from MF's failure. Still another Journal story looks at how MF investors are fairing, with their accounts frozen or moved to other firms.

Receiving Wide Coverage ...The Day After: "Thousands" of customers visited their local community banks and credit unions on Saturday, presumably to consummate Bank Transfer Day, the Journal reports. However, the paper raises the possibility that the megabanks losing these accounts may be whispering "good riddance" to at least some of them. "People who gravitate to credit unions tend to be unprofitable for giant banks because of the small balances they keep on deposit, low number of products they buy and the relatively high account-maintenance expenses at big financial firms," the Journal says. (Hmm, that idea sounds familiar; where did we read that before?) Lower down in the article is a refreshing acknowledgment that despite being lumped together with credit unions as "the good guys" in the Bank Transfer Day narrative, many community bankers resent their tax-exempt rivals at the CUs almost as much as they resent the too-big-to-fail banks (if not more so). Another Journal story warns consumers that while the $5 debit card fees that galvanized the Bank Transfer Day crowd are kaput, other fees are likely to take their place as banks try to somehow recoup revenues lost to the Durbin interchange regulation. (Hey, that analysis sounds familiar, too.) The Netbanker blog points out that several of the credit unions actively wooing consumers to make the big switch were using SwitchAgent, a technology developed by Deluxe Corp. that makes it easier to change banks. We must say this was a prescient and timely offering, particularly from a company whose traditional business is the very twentieth-century activity of printing checks. Another credit union featured in the NetBanker post, Verity, employed what the blog called a "gloves off" promo: "Join the Credit Union Revolution … Make a Stand." At least the ad doesn't call CUs a "movement"…

Receiving Wide Coverage ...Bailout Redux: While the European bailout plan "set off celebrations" in markets throughout the world, many analysts warned that the plan "remains a work in progress," the Post reported. "Key details are uncertain, they say, and a slowing European economy could throw the program off course." The Journal, like a lot of other media, went full tilt on the European bailout agreement even though - or maybe because - a lot of folks are skeptical it will hold up. Yes, Americans are happy everywhere that their 401(k)s shot up with the market Thursday, but it could take "weeks" for negotiators in Europe to tell us the details of (and to figure out themselves) what they have wrought, the Journal said. Not promising was the warning by a European Central Bank official that the deal's "leverage instruments are similar to those which were among the origins of the crisis, because they temporarily masked the risks." The deal relies on "Byzantine financial engineering," another Journal story said. (A note to Scan's Greek friends: that's not a compliment.) A big push is expected. European officials are going to have to sell sovereign markets on the plan, as sovereign bond markets and others reacted cautiously. Some say the European banks got off too easy, yet others speculated the plan might work despite initial shortcomings if it boosts confidence. The Times said German Chancellor Angela Merkel called bankers' bluff, telling them to take the offer on the table of a 50% write-down in the face value of their Greek bond holdings, or bear the consequences of a default. She was willing to risk a credit event that would have thrown world markets into turmoil, and if that happened, she would blame the banks. Critics say the plan may not deliver as much relief to Greece as promised, and that it may not be sufficient to help troubled banks. "It's another patchwork effort," said Richard Cookson, global chief investment officer of Citi Private Bank. The FT looked at China's role in the rescue, and its demands that other countries be involved and its investment be guaranteed. The article quotes French President Nicolas Sarkozy: "Why would we not accept that the Chinese had confidence in the eurozone and place a part of their surpluses in our funds or our banks. Would you rather they placed it with the US?" Ouch!

Breaking News This Morning ...Earnings: Bank of America, State Street

Receiving Wide Coverage ...Steve Jobs Dies: The visionary founder of Apple, who famously said “It's not the consumers' job to know what they want," was 56. As American Banker noted when Jobs stepped down as CEO in August, Apple has had a substantial influence on the financial world. Wired, Fast Company, Financial Times, Wall Street Jornal, New York Times.