So how did this latest mini-crisis start? The bad loans reported by Zions Bancorp and Western Alliance Bancorp this week can be traced back to the bankruptcy of a commercial real estate investment firm in Southern California.

In a lawsuit filed Wednesday, Zions listed 16 addresses of properties pledged as collateral to more than $60 million loaned to an investor group. When Newport Beach, California-based real estate firm MOM CA Investco sought court protection in February, six of those properties were listed as investments. Back when bankers at a Zions subsidiary underwrote the loans, they made sure Zions would be first in line for repayment if things went sideways.

Or so they thought. When MOM CA Investco filed bankruptcy, it led to a planned sale of some its properties. It turned out that, for those buildings that served as collateral for the loans Zions issued, other firms were first to be paid. A similar situation hit Western Alliance. 

Relative to the collapse of First Brands Group and Tricolor Holdings, the losses disclosed by the two regional lenders might seem small. Still, the back-to-back reveal of loan fraud has renewed the simmering debate on Wall Street about whether the era of freewheeling capital is about to experience what can euphemistically be called a sudden deceleration—to the detriment of banks and non-banks alike. —David E. Rovella

What You Need to Know Today

The Federal Reserve is ready to cut interest rates again this month, because right now a weakening job market outweighs inflation fears. But that balance may not hold for very long. There’s a sizable Fed contingent calling for caution, pointing to prices that have been running above-target for years and still face upward pressures.

Even some policymakers who are open to two more rate cuts this year aren’t confident projecting that trajectory any further ahead. All of this means the path for borrowing costs into 2026 is much less clear than the steady downward drift that financial markets are currently betting on.

President Donald Trump on Friday announced the latest targeted strikes on civilians by the US military, which has repeatedly blown up boats in the Caribbean in what legal experts have called extrajudicial killings that violate military, US and international law. Trump and the Department of Defense have not provided any evidence that the more than two dozen civilians killed by American forces posed a threat to them or were, as the White House has claimed, transporting drugs. The latest strike follows the announcement Thursday that Admiral Alvin Holsey, the head of US Southern Command, plans to retire at the end of the year. Holsey was just one year into his term and no reason was given.

Also on Friday, Trump asked the US Supreme Court to reverse two lower courts and let him deploy soldiers to Chicago streets as part of his ongoing effort to partially militarize Democratic-run cities, including Washington and Portland, Oregon. “Trump will keep trying to invade Illinois with troops—and we will keep defending the sovereignty of our state,” Illinois Governor JB Pritzker said in response. “Militarizing our communities against their will is not only un-American but also leads us down a dangerous path for our democracy.”

The US Army Corps of Engineers will pause $11 billion in infrastructure projects in 12 states that voted for Democratic Vice President Kamala Harris in 2024 as Trump continues to target blue states. The White House says the unprecedented blocking of previously allocated Congressional funding is because of the government shutdown.

Democrats have refused to fund the government unless Republicans agree to renew expiring healthcare provisions affecting millions of Americans. Trump is specifically targeting major infrastructure projects in New York, home to Democratic leaders in the House and Senate, but is also going after efforts in other states, including a bike-lane expansion in Massachusetts and a fish-habitat restoration and waterfront park in California.

Until mid-October, the Indian rupee was Asia’s worst-performing currency of 2025. It was heading for its biggest annual drop since 2022, when Russia launched its full-scale invasion of Ukraine and sent oil prices soaring. That was a major blow for India, given it imports about 90% of its crude.

This year, the rupee’s weakness has been fueled by Trump’s surprise tariff slap against a country that for decades America sought to woo. Higher US levies on Indian exports and a wave of foreign outflows from local equities sent the currency to a near-record low. Then, over just three days, the rupee rebounded in a move traders attributed to central bank intervention. Now the rupee is at a crucial juncture: There are tentative signs US-India trade ties may be improving, which could ease pressure on the currency. But if that doesn’t happen, the Reserve Bank of India may be forced to step in again. 

What You’ll Need to Know Tomorrow