Swiss Central Bank Cuts Rates to Zero, Could Go Negative

Money Metals News Service
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Swiss Central Bank Cuts Rates to Zero, Could Go Negative

(Mike Maharrey, Money Metals News Service) Even as the Federal Reserve stood pat and held interest rates steady at between 4.25 and 4.5 percent, the Swiss central bank slashed its rates to zero and indicated that negative interest rates are a possibility.

The Swiss National Bank cut rates in response to extremely low inflation pressure.

“The SNB will continue to monitor the situation closely and adjust its monetary policy if necessary, to ensure that inflation remains within the range consistent with price stability over the medium term.”

Why Lower Rates in Switzerland?

Swiss interest rates typically run lower than the global average due to the Swiss franc’s (CHF) relative strength.

There are several reasons for this.

The franc is considered a safe-haven currency. Investors flock to franc-denominated assets during periods of crisis and global instability. This puts upward pressure on the Swiss currency. Lower interest rates mitigate some of that pressure by discouraging capital flows.

In practice, countries with higher interest rates tend to attract more capital as investors seek yield. This is especially true of short-term, interest-sensitive investments like bonds or bank deposits. By holding rates lower, the Swiss central bank discourages foreign investors from gobbling up its financial assets.

Given the level of geopolitical and economic uncertainty in the world right now, it makes sense that the Swiss National Bank is taking steps to mitigate this currency strength.

A strong franc hurts exports, which is a significant aspect of the Swiss economy. A strong currency puts a drag on exports by making a country’s goods and services more expensive for foreign buyers.

For example, if a Swiss watch is priced at 1,000 CHF, it would cost $1,100 if the exchange rate is 1 CHF to $1.10. If the franc strengthens to 1 CHF to $1.20, the price of that watch for an American buyer would increase to $1,200, representing a 9 percent price hike.

Several other factors tend to drive interest rates in Switzerland lower. The population generally has much lower inflation expectations, and the Swiss bank sets policy with an anti-inflation bias.

Swiss CPI fell by 0.1 percent on an annual basis in May.

Switzerland doesn’t need to inflate its currency like the U.S. because it carries much lower levels of debt. Currently, the Swiss Confederation’s federal debt stands at 141.4 billion CHF ($507.3 billion), totaling just 17.2 percent of GDP. Contrast that with a U.S. national debt of over $36 trillion and growing, making up over 120 percent of GDP according to the National Debt Clock.

Negative Interest Rates?

With the Swiss interest rate set at zero, the next step would be to take rates into negative territory.

The Swiss National Bank hasn’t ruled this out.

A Capital Economics economist told CNBC he expects the bank to slash rates to -0.25 percent, and they could go even lower.

“There are risks that the SNB will go further in the future if inflationary pressures don’t start to increase, and the lowest the policy rate could go is -0.75%, the rate it reached in the 2010s.”

In practice, a negative rate means financial institutions must pay to park excess reserves at the central bank. Normally, the central banks pay interest on funds deposited there.

In effect, negative rates penalize banks for holding cash and incentivize them to lend. Negative rates were used by several countries during the Great Recession in efforts to stimulate more borrowing to help prop up their economies.

For instance, the European Central Bank (ECB) launched negative rates in June 2014. It didn’t go positive again until July 2022.

Negative interest rates have a perverse effect on the economy. As a Mises Institute article put it in 2019, “Negative interest rates turn everything we know about economics upside down.”

“Negative interest rates are the price we pay for central banks. The destruction of capital, economic and otherwise, is contrary to every human impulse. Civilization requires accumulation and production; de-civilization happens when too many people in a society borrow, spend, and consume more than they produce. No society in human history previously entertained the idea of negative interest rates, so like central bankers we are all in uncharted territory now.”

When central banks implement a negative interest rate policy, depositors are incentivized to spend money rather than save it at the bank and incur a guaranteed loss.

In practice, commercial banks have been reluctant to pass negative rates on to their customers. Nevertheless, negative rates imposed by central banks tend to depress interest rates throughout the economy.

The Federal Reserve has never dabbled in negative interest rate policy, although one must wonder if it will take that path during the next economic meltdown. As we have seen throughout history, each subsequent crisis has required more extreme interventions.

Mike Maharrey is a journalist and market analyst for Money Metals with over a decade of experience in precious metals. He holds a BS in accounting from the University of Kentucky and a BA in journalism from the University of South Florida.

Court Shelves Judge’s ICE Obstruction Case Pending Dismissal

Luis Cornelio
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Court Shelves Judge’s ICE Obstruction Case Pending Dismissal

(Luis Cornelio, Headline USA) The trial of Milwaukee County Judge Hannah Dugan—accused of shielding an illegal alien from ICE agents—was removed from the calendar on Thursday as the court reviews her motion to dismiss the case altogether. 

The DOJ accused Dugan of aiding Eduardo Flores-Ruiz, an illegal alien from Mexico, in evading a federal arrest warrant over his immigration status. He had been previously deported and was in state court to face domestic battery charges. 

Flores-Ruiz slipped past federal agents in the courtroom with the assistance of Dugan on April 18, federal prosecutors alleged. 

Dugan now faces one count of obstruction or impeding a federal proceeding and one count of concealing an individual to prevent his discovery and arrest. 

According to CBS News journalist Scott MacFarlane, the federal court pulled the trial from the calendar as it considers Dugan’s motion to dismiss.

The court could decide the case’s fate on those legal arguments alone, MacFarlane wrote on X.

In a filing reviewed by Headline USA, Dugan’s attorneys claimed her charges violate the U.S. Constitution. 

“The government’s prosecution of Judge Dugan is virtually unprecedented and entirely unconstitutional—it violates the Tenth Amendment and fundamental principles of federalism and comity reflected in that amendment and in the very structure of the United States Constitution,” her lawyers wrote. 

They contend Dugan is entitled to “absolute judicial immunity” for all official acts, including escorting Flores-Ruiz out a back door. 

It is unclear when a federal judge could rule on the case.

Viral: Trio Walks Out on $200 Bill at Black-Owned Chicago Restaurant

Luis Cornelio
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Viral: Trio Walks Out on $200 Bill at Black-Owned Chicago Restaurant

Luis Cornelio, Headline USA) Three black patrons went viral Wednesday after fleeing a black-owned Chicago restaurant without paying a $200 tab that included some of the most expensive meals on the menu. 

The theft occurred on Monday at the outdoor patio of Phlavz Bar and Grille in the Windy City and first went viral on Instagram.

Footage showed the trio sitting at a table, then running as a server approached with the check. Seconds later, the server finds an empty table and no payment. 

“It’s actually disappointing—very disappointing to see that from the community we actually serve,” Phlavz co-owner Andrew Bonsu told ABC 7 in an interview. “We pour into the community.” 

Fellow co-owner Phil Simpson echoed Bonsu’s sentiments, adding, “The young lady that was serving that table, she’s got kids at home. She gets a percentage of that tip.”  

“She worked hard to serve that table. They had a lot of food,” he stated. 

Simpson said that the restaurant managed to identify the three, who later apologized and offered to pay the $200 bill for shrimp and lobster. 

“They apologized. They sent someone to pay the bill, but I declined to accept it,” he said. “At that point, we are going to pursue this the right way.” 

Despite that, the owners decided not to file a theft report with the Chicago Police Department. 

“For us to put our hard-earned money into this and set this up for our community, to see things like this happening, it’s tasteless,” Bonsu declared. “It’s important to at least let them know Phlavz is not going to be tolerating the dine-and-dash.” 

 

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Illegal Alien Brandished Knife in Threat to Trump-Appointed US Attorney

Luis Cornelio
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Illegal Alien Brandished Knife in Threat to Trump-Appointed US Attorney

(Luis Cornelio, Headline USA) An illegal alien from El Salvador attempted to murder President Donald Trump’s hand-picked prosecutor for the Northern District of New York, the DOJ announced Thursday. 

Prosecutors said that Saul Morales-Garcia, an illegal alien from El Salvador, lunged at U.S. Attorney John A. Sarcone III while brandishing a knife and shouting aggressively in a foreign language just steps from Sarcone’s downtown Albany office. 

Prosecutors said Morales-Garcia entered the country illegally in 2021 after a prior deportation. Mainstream media has referred to him as an “Albany man,” similar to how suspected MS-13 human trafficker Kilmar Abrego was deemed a “Maryland man.”

He now faces state charges of attempted second-degree murder, criminal possession of a weapon in the third degree and menacing in the second degree.  

The FBI and Homeland Security Investigations may pursue federal charges.

While Sarcone was not injured, he said the incident left him rattled.  

“I felt an obligation to the public as the chief Federal law enforcement officer in the district that includes the city of Albany,” Sarcone said in a press statement. “I feared for my life but I couldn’t let this individual harm and potentially kill others.” 

The incident occurred shortly after Sarcone left his office. Morales-Garcia allegedly ran toward him with a knife, prompting Sarcone to seek refuge inside a nearby Hilton hotel. 

As Morales-Garcia fled, Sarcone feared he might attack a civilian and stepped outside the lobby to draw the illegal alien’s attention. 

Sarcone had contacted Albany County Sheriff Craig D. Apple Sr. to summon local law enforcement. 

Once outside, Morales-Garcia allegedly charged at Sarcone again while making a throat-slitting gesture with the knife. 

“I am relieved that no one was harmed,” Sarcone said. “I appreciated the swift response by the Albany County Sheriff’s office which was within minutes although it seemed like an eternity.” 

Trump Says He Will Decide Whether or Not To Bomb Iran ‘Within Two Weeks’

Headline USA Editor
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Trump Says He Will Decide Whether or Not To Bomb Iran ‘Within Two Weeks’

(Dave DeCamp, Antiwar.com) President Trump said in a statement released by the White House on Thursday that he will make a decision on whether or not to directly enter the Israel-Iran war by launching airstrikes within two weeks.

White House Press Secretary Karoline Leavitt read the statement at a press briefing. “Based on the fact that there is a substantial chance of negotiations that may or may not take place in the near future, I will make my decision of whether or not to go within the next two weeks,” she said.

When asked what Trump’s demands were for a diplomatic solution with Iran, Leavitt said Tehran must give up its nuclear enrichment program, a condition Tehran has made clear is a non-starter. Iranian officials have also said they’re not willing to negotiate while Israel is attacking Iran.

Reuters reported on Thursday that US envoy Steve Witkoff has spoken by phone with Iranian Foreign Minister Abbas Aragchi several times since Israel launched the war last week. Diplomats said that Aragchi’s message was that Iran could return to nuclear negotiations and “show flexibility” but only if Israel’s attacks come to an end.

The statement from Trump regarding the timeline on his decision came after The Wall Street Journal reported that the president has approved plans to attack Iran but is waiting to give the final order. Trump said on Thursday that the paper “has No Idea what my thoughts are concerning Iran!”

Bloomberg also reported on Wednesday that US officials are preparing to launch strikes on Iran in the coming days, making this weekend a potential time for the attacks to begin. Iran has vowed it will hit back hard, and Iranian missile attacks on US bases in the region could cause significant American casualties.

Israel is expecting the US to join the war and wants the US to drop its heavy bunker buster bombs on Iran’s Fordow nuclear site, which is buried deep underground. But Israeli Prime Minister Benjamin Netanyahu and other Israeli officials have made it increasingly clear that their real goal may be regime change.

Netanyahu launched the war under the pretext of stopping Iran from building a nuclear weapon, but the consensus of US intelligence before the attack was that Tehran wasn’t working toward a bomb. Iran made it clear in negotiations with the US that it was willing to re-commit to never develop nuclear weapons, reduce uranium enrichment to low levels, increase oversight, and get rid of its stockpile of uranium enriched at the 60% level.

This article originally appeared at Antiwar.com.

Pentagon Officer is Fired after Anti-Israel Social Media Posts Surface

Jose Nino
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Pentagon Officer is Fired after Anti-Israel Social Media Posts Surface

(José Niño, Headline USA) Col. Nathan McCormack, who served as the Pentagon’s top advisor on Israel and regional Middle East policy, has been stripped of his Joint Chiefs role following revelations that he used social media to describe Israel as America’s “worst ally” and accused the U.S. of enabling Israeli “bad behavior.”

This move came at a time when Israel and Iran have entered a hot phase of their multi-decade rivalry, with the United States rumored to be on the verge of intervening on Israel’s behalf.

The controversy erupted on Tuesday, after the Jewish News Syndicate (JNS) reported on McCormack’s semi-anonymous X (formerly Twitter) account, which included posts calling Israel “our worst ‘ally’,” labeling its government a “death cult,” and referring to Prime Minister Benjamin Netanyahu and his allies as “Judeo-supremacist cronies.”

McCormack’s posts, which have since been archived or deleted, went further to accuse Washington of “overwhelmingly” enabling what he described as Israel’s “bad behavior,” and claimed that Western states avoid criticizing Israel “much out of Holocaust guilt.”

In a particularly pointed critique, he wrote that Israel’s actions had “prompted the accusations of ethnic cleansing and genocide,” and alleged that pro-Israel activists in the United States prioritize support for Israel “over our actual foreign interests.”

The Pentagon responded swiftly after the story broke, with a spokesperson confirming, “He will no longer be on the joint staff while the matter is being investigated.” The Pentagon emphasized that McCormack’s statements “do not reflect the position of the Joint Staff or the Department of Defense,” and assigned an investigating officer to review the posts and their implications.

McCormack has been reassigned back to Army service pending the outcome of the probe, according to The Jewish Chronicle.

A Pentagon contractor who interacted with McCormack described the posts as “dangerous,” adding, “This is the kind of bitter oversharing I’d expect from someone who doesn’t know better. But at his level and under his own name and likeness? It’s mind-boggling. We have enough opsec [operations security] and public perception problems as is.”

McCormack, a career infantry officer with more than two decades of service and a background in Middle Eastern history, had been in his Pentagon role since June 2024 per his Linkedin profile.

His responsibilities included advising senior military leadership on strategy and policy for Israel and the broader Levant region.

José Niño is the deputy editor of Headline USA. Follow him at x.com/JoseAlNino 

Pro-Palestine Rioter, Who Remains At Large, Suspected of Torching 11 NYPD Vehicles

Headline USA Editor
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Pro-Palestine Rioter, Who Remains At Large, Suspected of Torching 11 NYPD Vehicles

(Headline USA) A man suspected of torching 11 New York City police vehicles in Brooklyn last week — the first of two such arson attacks in the last week — was previously arrested at pro-Palestinian protests and is wanted for damaging a statue at Columbia University last fall, police said.

The NYPD on Wednesday released photos and a video of the suspect, 21-year-old Jahki Lodgson-McCray, of New Jersey, and asked the public for help finding him. He remained at large as of Thursday.

Police are also investigating whether he is also responsible for attempting to set fire Wednesday to a police van in another part of Brooklyn.

In the first attack, police said, a man climbed over a gate around 1 a.m. on June 12 and placed fire starters on the windshields, hoods and tires of multiple vehicles in a police parking lot about a block from a police station in Brooklyn’s Bushwick neighborhood.

The man then fled on foot, police said, citing surveillance video they said placed the 21-year-old suspect at the crime scene. None of the vehicles were occupied and no injuries were reported.

On Wednesday, police said, a fire starter was found on a police van parked outside a diner in Brooklyn’s Williamsburg section. NYPD Chief of Detectives Joseph Kenny said the device was similar but not the same brand as the ones used in Bushwick.

After last week’s fire, Mayor Eric Adams suggested that the suspect was connected to protests in Los Angeles, New York and elsewhere over the Trump administration’s immigration enforcement agenda. Police, however, have not made that connection.

The suspect has two pending criminal cases in the city, according to court records.

On May 28, he was arrested in Manhattan and charged with disorderly conduct and resisting arrest for allegedly obstructing traffic and refusing to move. In May 2024, he was arrested in Queens and charged with assault and resisting arrest. He has pleaded not guilty in both cases.

He has yet to be charged in the arson attack or the Columbia University vandalism last September. There, Kenny said, he disguised himself as a student and caused over $1,000 of damage to a campus statue.

Adapted from reporting by the Associated Press

Social Security, Medicare to Run Out of Money Earlier Than Expected

Headline USA Editor
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Social Security, Medicare to Run Out of Money Earlier Than Expected

(Caroline Boda, The Center Square) The Social Security program is nine years away from insolvency, the Social Security Board of Trustees said Wednesday.

This forecast moved up one year since 2024’s annual report, which projected the program to deplete its funding by 2035. Now that projection date is set at 2034.

Medicare’s hospital trust fund will fall short in 2033, when it will only be able to cover 89% of scheduled benefits. This date moved up three years since last year’s report, according to the Medicare Board of Trustees.

“As in prior years, we found that the Social Security and Medicare programs both continue to face significant financing issues,” the Treasury Department said Wednesday.

Tens of millions of Americans who rely on Social Security due to retirement or disabilities would see cuts to their monthly benefits.

If no changes are made, beneficiaries will only receive 81% of their benefits in nine years, the trustees’ report says.

“This data underscores the need for lawmakers to take action to support the long-term viability of these programs,” Treasury Secretary Scott Bessent said. “Under President Trump’s whole-of-government initiative, the administration will continue to root out waste, fraud and abuse across federal agencies to ensure quality service for beneficiaries and responsible stewardship of taxpayer funds.”

The Social Security trustees cited a recent law upping support for beneficiaries as the culprit for the insolvency drop from 2035 to 2034.

The bipartisan Social Security Fairness Act, which was signed into law earlier this year, added benefits for almost three million public sector employees, including teachers and firefighters.

The Committee for a Responsible Federal Budget, a D.C.-based think tank, responded to Wednesday’s Social Security and Medicare reports.

“Where is the sense of urgency?” President Maya MacGuineas said. “We are running out of time to phase in changes gradually and avoid harsh cuts, sharp tax increases or unacceptable borrowing.”

Federal Reserve Holds Rates Steady, But Could Cut Them Later This Year

Headline USA Editor
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Federal Reserve Holds Rates Steady, But Could Cut Them Later This Year

(Brett Rowland, The Center Square) Federal Reserve officials agreed to hold interest rates steady on Wednesday but suggested they could cut them later this year.

“Despite elevated uncertainty, the economy is in a solid position,” Federal Reserve Chairman Jerome Powell said.

Earlier in the day, President Donald Trump again called Powell “not a smart person” and said Powell was “too late” to cut interest rates. The president also said he was looking forward to the end of Powell’s tenure at the Federal Reserve.

“Now we have a man who just refuses to lower the Fed rate – just refuses to do it,” Trump said Wednesday morning before Powell’s news conference. “And he’s not a smart person. I don’t even think he’s that political, I think he hates me, but that’s OK. He should. I call him every name in the book trying to get him to do something.”

Trump said he wanted rate cuts to make it easier for the U.S. Treasury to issue less expensive long-term debt.

The Federal Open Markets Committee kept the central bank’s federal funds rate at a target of 4.25% and 4.5%.

“For the time being, we’re well positioned to wait to learn more about the likely course of the economy,” Powell said during the news conference.

Trump has repeatedly called on the Federal Reserve to lower interest rates, but the president has limited authority over the independent agency.

LA’s $20M Protest Response Illustrates Officer Shortage Cost

Headline USA Editor
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LA’s $20M Protest Response Illustrates Officer Shortage Cost

(Kenneth Schrupp, The Center Square) Los Angeles’ $19.7 million response to the June protests and riots was almost entirely spent on police, highlighting the growing cost of police overtime amid an enduring officer shortage.

According to a new report from government transparency group Open The Books, the city of Los Angeles spent $1.1 billion on overtime in 2024, or more than the city’s nearly billion dollar budget deficit. Of that $1.1 billion in overtime, $265.5 million went to the Los Angeles Police Department, which has just 8,688 officers, or nearly a thousand officers short of its full authorized strength of 9,500.

“A revenue pinch amid Covid lockdowns led to a spate of early retirements that have exacerbated the need for extra-hours pay,” wrote OTB. “And as the Los Angeles Police Department faces rioting, the force’s ranks are at their smallest in two decades.”

As a result of the officer shortage, the city’s remaining officers work significant, and costly, overtime.

Overtime generally pays 50% more than regular wages. LAPD officers earn $46.78 per hour after their one-year probationary status, meaning overtime could provide wages of $70.17 per hour. However, studies show constantly working overtime can impact officers’ job performance, which can put lives of officers and the public at risk.

OTB found the LAPD’s payroll declined from 14,902 employees in 2020 to 12,617 employees in 2024. Its payroll rose from $1.71 billion to $1.73 billion. This means LAPD’s compensation per employee has increased approximately 19.5%, or just below inflation, which was 21% between December 2020 and December 2024.

OTB recalls how one homicide detective working in South Los Angeles, which is the most violent part of the city, made $404,975 in overtime, or $603,887 in total. That detective and others have even been ordered by court to take days off, leading investigations to be put on hold, delaying witness interviews and impacting important leads.

However, as reported by the Los Angeles Times, the city council’s new budget provides enough funding for the LAPD to have only 8,399 officers by June 30, 2026, the end of the next fiscal year, meaning either overtime could continue to increase or police responsiveness may decline.

With LA’s population estimated to be 3.8 million, there is approximately one LAPD officer for every 429 residents.

Chicago and New York City, which both have significantly larger police departments than Los Angeles, have roughly one police officer for every 220 residents. That suggests Los Angeles is severely under-equipped for policing, especially given the fact that LA is geographically far larger and more spread out than the two cities.

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