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Why have borrowing costs for mortgages and other loans stayed so high for the past two years, and when might they start to come down? 

The man best equipped to answer those questions, Federal Reserve chair Jerome Powell, is set to testify before Congress Tuesday and Wednesday, where he’ll be grilled by some of the biggest critics of the central bank’s ongoing policy of holding interest rates high to push down inflation.

Here’s what to expect from Powell’s scheduled testimony. 

Powell will appear before the Senate banking committee on Tuesday, and the House finance committee on Wednesday. In both appearances, he will deliver the Fed’s twice-yearly report on monetary policy, released last week.The report, which echoed recent comments from Fed officials in various public appearances, noted the balancing act that the central bank’s policy committee faces as it attempts to control inflation. If the Fed gets monetary policy wrong, it could stoke inflation, or cause a recession, both of which would be painful for everyday households.

By keeping the influential fed funds rate at its current level, a 23-year high, the Fed is making mortgages, auto loans and other debt costlier in an attempt to discourage borrowing and spending and push inflation down to a 2% annual rate from its current level of just under 3% (depending on how it’s measured.) 

Higher rates put more pressure on inflation by dragging down the economy. The risk of the strategy is that the economy could slow down too much and fall into a recession complete with mass layoffs—an outcome that’s so far been avoided, to the surprise of many economists. 

The Fed is poised to start reversing its campaign of anti-inflation interest rate hikes, which began in March 2022, and which has helped bring inflation down from its peak of 9.1% that year. Powell and other officials have said they’re monitoring data on inflation and other economic indicators to decide when to start cutting rates.

“The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the Fed said in the report. “Reducing policy restraint too soon or too much could result in a reversal of the progress on inflation. At the same time, reducing policy restraint too late or too little could unduly weaken economic activity and employment.”In public remarks last Tuesday, Powell declined to say when rate cuts would come, and repeated his refrain that the decision would be guided by incoming data. 

Since then, the Fed has gotten a major data point to digest: a report on the labor market showing that in June, unemployment rose to 4.1%, its highest since 2021. The hearings will be an opportunity for Powell to say how he is interpreting that data, and how rising unemployment might influence rate decisions.

The hearings are a chance for lawmakers to pressure the Fed and attempt to influence the central bank’s policy moves, despite the fact that the Fed is supposed to operate independently from political pressure. 

Committee member Elizabeth Warren, a Democrat from Massachusetts, has been critical of the Fed’s rate-hike campaign since the outset, and has sparred with Powell over high interest rates in the past. In a letter last month, Warren together with fellow Democratic Senator Jacky Rosen of Nevada urged Powell to cut the fed funds rate sooner rather than later.

Warren’s letter noted that the rate hikes have pushed up borrowing costs on mortgages, hurting the ability of Americans to afford homes.

“Housing-related inflation is directly driven by high interest rates: reducing rates will reduce the costs of renting, buying, and building housing, lowering Americans’ single highest monthly expense,” the senators wrote.

Powell may also get tough questions from the other side of the political aisle, from Republicans who are critical of the central bank’s role as a banking regulator. 

Republicans have criticized proposed regulations that would require banks to hold more capital, reducing the risk of bank failures. Last July, the Fed along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed rules that would require banks to hold 16% more capital than they currently do.

The measure is heavily opposed by the banking industry and its allies. Critics say the rules would push banks to give out fewer loans to individuals and small businesses, and charge higher interest rates when they did lend money. 

In March, Powell told lawmakers he expected the rule would undergo “broad and material changes” before being finalized.

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Sophia Momodu, first babymama of singer Davido, has tooted her horns at her daughter’s school amid a custody battle with the singer.

Taking to her Instagram page, Sophia stated that as summer break begins, she finds herself reminiscing, and she misses having a school routine with Imade Adeleke. Sophia revealed that one of her fondest memories of school being in session was when she was invited to her daughter’s prestigious school for World Career Day as a social brand influencer, or what she loves to call the “Soft money gang”.

She stated that she had a blast chatting about all things influencing, sharing experiences and answering endless questions. She expressed how delighted she was to see how many of the kids were already thinking outside of the box and dreaming big.

Sophia added that it amazes her to see the new generation learning to infuse working smart and working hard into finding their purpose.

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Shares of cruise ship companies moved higher Monday after Hurricane Beryl was downgraded to a tropical storm.

Beryl made landfall on the Gulf Coast of Texas as a Category 1 Hurricane Monday morning, killing at least two. It was rated Category 4 last week, when Beryl became the strongest hurricane on record to hit the Atlantic Ocean in the month of June.

The storm made landfall in Grenada on July 1 and passed through the Caribbean, forcing cruises scheduled to traverse the islands to be rerouted, according to reports citing emails sent to customers. The news sent cruise operators' shares lower. At least nine people were killed across Jamaica, Venezuela, Grenada, and Saint Vincent and the Grenadines.

Shares of Carnival (CCL) gained more than 2% in recent trading Monday, while Royal Caribbean (RCL) increased nearly 3% and Norwegian Cruise Line (NCLH) rose nearly 5%. 

Last month, Carnival reported second-quarter adjusted earnings per share (EPS) of 11 cents, much better than the 2-cent-per-share loss projected by analysts.

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Super Eagles striker Kayode Olarenwaju has filed for a divorce from his estranged wife, Ezinne, at a Federal Capital Territory High Court in Abuja.

The football star also prayed the Court for ₦1 billion damages against controversial UK-based Pastor, Tobi Adegboyega for emotional tr@uma, financial loss and loss of goodwill occasioned by his alleged ad¥lterous affair with Ezinne.

Olarenwaju and Ezinne have been engaged in a marital battle following allegations of infid£lity, among other issues.

The cross-petition marked Suit Number PET/304/2024 cited several allegations involving infid£lity, financial misconduct, and a dramatic family fallout.

In his cross-petition, Olanrewaju claimed that since their marriage in 2013, Ezinne has repeatedly committed ad¥ltery, including his earlier claim of an ongoing affair with Pastor Adegboyega.

The footballer alleged that his wife’s relationship with Adegboyega has not been discreet, with the pair seen openly attending parties and sharing intimate moments in public.

He also said that Ezinne has had similar relations with other men, which has made it intolerable for him to continue living with her as husband…(swipe to keep reading.)

📷: @pmnewsnigeria

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Shares of Vista Outdoor (VSTO) edged higher Monday after the outdoor products company rejected a private equity firm's takeover offer, putting its support behind another company's bid to buy one of its divisions for $2.1 billion.

Vista's shares were recently up about 0.5% to more than $37 per share. The company rejected last month's offer from MNC Capital in favor of a sweetened offer from Czechoslovak Group (CSG) that it said is a better value for shareholders than MNC Capital's $3.2 billion offer and has a clearer path to closing because it already has received the necessary regulatory approvals.

MNC Capital's offer was for the entire company, while CSG has offered to acquire the Kinetic Group, Vista's group of firearm and ammunition brands like Remington. The deal would allow Vista to retain its Revelyst division, which controls outdoor brands like Camelbak backpacks and Bell cycling helmets.

MNC last month raised its bid for the full company to $42 per share, roughly $3.2 billion, days after the Committee on Foreign Investment in the U.S. (CFIUS) cleared Vista's deal with Prague-based CSG, saying there were "no unresolved national security concerns."

If the CSG deal goes through, Vista said its Revelyst division would become its own publicly traded company, while the Vista name and Kinetic brands would merge with CSG.

"As a pure-play standalone outdoor company, there is significant opportunity for Revelyst to realize superior value for stockholders when separated from The Kinetic Group, with expanded strategic opportunities and the strengthened ability to attract and retain talent," the company said Monday.

Vista said it will hold a special shareholder meeting to approve the CSG deal on July 23, and said its board has "unanimously" rejected MNC's final offer.

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Shares of Corning (GLW) soared Monday when the specialty glass maker boosted its guidance, citing rising demand for its products used in generative artificial intelligence (AI) applications.

The company now anticipates current-quarter earnings per share (EPS) at the high end of or slightly above its previous outlook of $0.42 to $0.46. It sees revenue of about $3.6 billion, $200 million more than its earlier estimate.

Corning shares were up more than 9% early Monday, trading at their highest levels since early 2022.

CEO Wendell Weeks said that the gains were “primarily driven by the strong adoption of our new optical connectivity products for Generative AI.” The results have increased confidence in Corning’s “Springboard” plan to raise annualized sales by more than $3 billion in the next three years "as cyclical factors and secular trends combine," he said.

Weeks said that the company believes the first quarter will be the lowest this year, and that the company expects to post strong incremental profit and cash flow as it “captures this growth management.”

The Corning, N.Y.-based firm is scheduled to report second-quarter numbers on July 30 before the markets open.

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