The Federal Reserve is cutting its key interest rate.

What that means for Nevada, plus... (Dana White) Tonight was meant to happen.

So it happened.

We did it.

We killed it.

-...how a scheduling conflict led the UFC to hold the first ever live sporting event at the Sphere.

That's this week on Nevada Week.

♪♪♪♪♪ Support for Nevada Week is provided by Senator William H. Hernstadt.

-Welcome to Nevada Week.

I'm Amber Renee Dixon.

And for the first time in four years, the Federal Reserve is cutting its benchmark lending rate.

The central bank began raising this rate in order to fight high inflation.

And for more than a year, that rate has sat at a 23-year high.

So what does this mean for Nevada's housing market and for Nevada consumers?

For that, we welcome John Restrepo, Principal of RCG Economics.

And, John, the Federal Reserve is cutting this rate by a half point.

Some economists thought it would be by just a quarter point.

What do you make of this?

(John Restrepo) I think there are two things that the federal, the Federal Chairman, Jerome Powell, said today: The inflation, the reduction in inflation, is on a steady downward path.

So they felt comfortable, okay, isn't that superheated.

we're going in the right direction, number one.

And number two, the job market is healthy, and they want to maintain it healthy, so they're trying to calibrate the rates-- the interest rate to a lower rate of inflation and to a steady job market.

-So what do you make of the timing, though?

There were supposed to be cuts earlier this year.

-I think at this point, I think the Fed saw the significant drop-off in the job growth numbers at the national level.

Not that jobs are declining, it's just the number of jobs produced has slowed down and the rate of inflation has now been sustained at a lower rate for enough time to go, Okay, we can-- we feel comfortable maintaining these trends, and let's do this 50 basis point increase, which, as you mentioned I think earlier, they haven't done it in about four years.

So it's a pretty big, pretty big change, but it's probably one that I think the Fed needed to do to make sure things stay stable.

-Nevada is in a housing crisis.

Supply just does not meet the demand.

How does this cut impact that?

-Well, as we were kind of discussing a little bit earlier, and that is, it's going to create additional demand, potentially, particularly if there's another quarter point to 50 basis point increase before the end of the year.

So if there's two more meetings, I think two or three-- two more meetings of the Fed, and they could increase it either 225 basis point increases or 125, 150.

And that would increase demand for housing, because interest rates will lower mortgage rates.

The challenge around for us, and not only here, but around the countries, is the problem hasn't been necessarily high interest rates causing housing prices to not be in demand.

It's a shortage of housing.

So there had been just a supply constraint market that's caused by a variety of factors.

And so it could have weird situation where the increase in interest rates could create mortgage demand and increase the demand for housing, as opposed to reducing housing price.

-And I think we have already seen that starting to happen across the country.

-Correct.

-Just because the rate is cut does not mean that more homes are going to be magically created.

Right.

Well, so what about for someone who has been waiting to get a home loan or to refinance their home loan?

Do they do that now or wait for further cuts?

-Wait.

Wait for further cuts.

Wait to see what happens.

April, May of next year.

We have time.

Let's not rush into anything.

You know, that big purchase is like including cars and other things like that.

So wait.

Rushing usually-- when you rush, usually you make a bad decision.

Things are going to change over time.

Let's see how it all unfolds.

-I'm glad you brought up cars, though, because this will apply to car loans as well.

-That's correct.

-What about credit cards?

-Credit card debt is a little different.

We do have excessive amounts of credit card debt right now because, you know, there's one thing Americans agree on, whether they're conservatives or liberals, is buying things on credit.

We, you know, we're not a society that lives within their means necessarily.

And so credit card debt, it'll be a little bit of adjustment, but they're so high as it is now, I don't think it'll make a big, big difference.

You'll notice a difference if you start seeing a greater volume of credit card offers in the mail to your house.

-Aha.

-If you see that kind of pattern in mail delivery, then you know something's going on.

I don't think it's going to have much impact on credit card debt or interest rates.

-You talked about the labor market nationally.

How would you describe Nevada's labor market right now?

And are you concerned that the slowing, the cooling of the labor market will impact Nevada?

-No, not yet.

Remember, the health of our economy and the health of our job market is really driven by the health of the economy in the rest of this country and internationally, because we're basically a tourist destination.

And so as long as that stays healthy, we'll do fine.

I think we'll do fine.

I think the bigger issue for Southern Nevada is we still have a lot of low-wage workers, so the cost of living versus wages is kind of out of sync compared to the U.S. as a whole.

To me, the bigger concern for the job market, at least in the intermediate term, let's say the next 5 to 10 years, as far as anyone knows what's going to happen 10 years from now, is a question of AI, automation, robotics, and what that does to our labor market and what kind of displacement, at least initially, will occur with people losing their jobs because of AI.

-Are there particular sectors you're concerned about?

-The resort industry.

On most of the economic surveys, our research on this, the hospitality industry around the country is the one that's been affected the most by AI or automation, robotics, however you want to call it.

And it looks like it will be the same one over the longer term, so I'm concerned about that.

-Yeah.

Hence why the culinary union has gotten some of those AI protections.

-That's correct.

-The Nevada consumer, when might they feel that inflation truly is lowered?

-You know, the question is how you define "inflation," right?

Folks understand that the rate of inflation or the rate of price increases is slowing, which is good, but they're still pretty high at the pump.

-Right.

-Or at the store.

So until you see prices actually coming down, the price of food, the price of fuel, you know, those are the two most volatile things, then you kind of understand intellectually, okay, the rate of increase is not getting worse.

In other words, what I paid for gas six months ago is the same.

So it's not getting worse, but it's not getting better.

So that we don't know.

-Will it ever get back to prior to when inflation reached its peak?

-Prior to the 2019, 2020 levels?

Probably not.

-Yeah.

-Prices get set, you know, and they kind of stay steady.

Very rarely do prices drop that dramatically.

It's got to be a really bad recession.

Now, that would-- you could see a lot of-- you could see a pretty significant price decrease on products and services if you have a deep recession, but you don't want that.

You'd rather have elevated prices and a healthy economy and healthy people with jobs, as opposed to a high unemployment rate but lower prices.

Pick your poison.

-We always have to ask you, what are your thoughts on a possible recession?

-I don't think we're going to see that anytime soon.

I think there's going to be a slowing in the economy.

I think the markets are indicating that--when I say "the markets," the general market, not the stock market, necessarily--that recession is not likely.

There will be a cooling off to the economy.

Remember, we're at a 5%, little over 5% unemployment rate in Nevada.

That used to be considered good, healthy.

A healthy economy was 5%.

That's what all the economists were taught.

That's what I was taught when I was in school.

We now have had a period where we've had very low unemployment.

So to go to 5% we think is a catastrophe.

It really isn't, because you need some excess number of people in the job market, I mean, to fill new jobs that come into play.

And so I don't see-- I don't see a recession.

I see a cooling off.

-Okay.

The Federal Reserve Chairman, Jerome Powell, at the press conference following this announcement of the decision said this is his fourth Presidential election that he's been in the Fed during, during this time frame.

The Fed operates independently from the government; however, there could be an impact on the election.

Or that's my question for you: Do you think this decision will impact the election?

-No.

-Why not?

-Because it takes time for an interest rate cut like this to really flow through the economy and see the effects of it.

So we don't know who it'll benefit at this point.

And so even if, regardless of who benefits from it, either candidate Vice President Harris or former President Trump, it's going to take time to see the economic effects on Main Street, so to speak, for the average consumer, to say, Ah, because they did this, that helped.

It's going to take time.

So we only have, what, 40, 50 days to the election?

It's not enough time to make a difference at this point.

-Is there anything to be taken from the fact that former President Trump appointed Jerome Powell and President Biden kept him in place?

-No, because the Fed is independent, and that's the greatest strength of having an independent central bank.

I think Chairman Powell said it really well earlier today in the press conference: All countries that have an independent central bank have the most stable democracies, have the most stable economies.

The last thing you want to do is have politics involved in the Federal Reserve or central bank decisions.

And so as long as we keep that independence, regardless who gets, who appoints who, I think it's the best way to stay.

John Restrepo, RCG Economics, thank you for joining Nevada Week.

-Thank you, Amber.

Appreciate it.

-We move now to the Las Vegas sports economy.

Boxing and UFC went head to head on Mexican Independence Day weekend with Mexican Boxing Superstar Saul Canelo Alvarez fighting at T-Mobile Arena and Noche UFC taking place at the Sphere.

Both events reported sellout crowds, and UFC President Dana White said Noche UFC cost about $20 million to put on.

It was the first ever live sporting event at the state of the art Sphere, a venue that White says he was forced to embrace after learning that Canelo's promoters had already booked T-Mobile.

We spoke with White ahead of Noche UFC.

(Dana White) The Sphere is definitely a one-of-one event.

I wanted to be first.

Nobody has ever done a live sporting event out of the Sphere.

And what was more attractive about that was everybody said it couldn't be done.

Those are the kind of things that I love.

I love when people say something can't be done.

(Amber Renee Dixon) What was the reasoning that they had for it not being possible?

-First of all, the setup.

You know, it's theater-style.

You have the big screen there.

Where would the Octagon go?

You know, we have that big lighting rig that hangs above, 30 years.

In the lighting rig are the lights that light up the octagon.

We have cameras in there, audio, microphones.

All that stuff lives inside.

That's gone.

But what I loved was when I went to see U2, when I was sitting in there, I realized that U2 wasn't the star of the show-- the Sphere was.

So I said, This is fascinating.

How could I pull off a sporting event in here, right, where the Sphere is the star of the show, but I also need the fighters to, you know, people need to focus on the fighters.

Because what you find yourself doing-- like, as soon as this is over, I got a box for the Eagles at the Sphere, right?

And what you do is you're in these seats and you're watching the screen, and you're listening to these songs that you love.

And every once in a while, you peek over and look at the band and whatever, and then you kick back and you start-- and I was, I was blown away by the whole thing.

Like, How the hell could you pull off a sporting event in here?

-You've described this as a love letter to Mexico, a tribute to the Mexican people for their extraordinary contributions to combat sports.

When you think of those contributions, what do you think of?

Who do you think of?

-So all the great fighters.

Some of the baddest dudes on earth have come from Mexico.

So when you look at their their heritage, their culture, there's lots of things that I love about the Mexican people-- how proud they are to be Mexican, how proud they are of where they come from, how hard they work.

They're known as hard workers.

They're known as a certain type of fighter-- move forward, never quit.

And as a kid growing up, you know, white kid from here, I was a big Julio Cesar Chavez fan.

Yeah.

-Will he be honored as part of this?

-You'll see, you'll see.

We're gonna honor everybody, everybody who ever came from Mexico that fought for anything will be honored in this show.

-So Canelo has to be a part of it.

-Mexican independence.

Say who?

-Canelo.

-Canelo is definitely a part of it, 100%.

-And he plays a unique role in that weekend, because you are going up against a Canelo fight in Las Vegas.

What kind of statement, if any, is the UFC trying to make by competing with a Canelo event on Mexican Independence Day weekend in Las Vegas?

-Yeah, I knew there was going to be an event.

You have to assume it's going to be Canelo.

It is what it is.

They're going to do their thing.

We're going to do our thing.

You know, Al Haymon slid in there and stole that date from us, which I got to give him props.

-Our Vegas PBS viewers may not know who Al Haymon is, and I wonder what your description of him would be.

-Al Haymon is a boxing promoter.

And what makes him fascinating as a boxing promoter, right-- so when you think of all the promoters, you know, throughout life, whether it's PT Barnum or it's Vince McMahon or, you know, Arum King, and all these guys, you know who they are.

You've seen them a million times.

Al Haymon is in the shadows.

He's a guy that you've never seen, yet he is one of the biggest fight promoters in the boxing business right now.

And he's very intelligent.

And props to him, he slid in and stole my date at MGM.

But if that didn't happen, I believe that everything happens for a reason.

If that doesn't happen and things don't line up the way they did, I'm not at the Sphere, I'm not first, and a lot of other things.

So this was meant to be; this was meant to happen.

The fact that we're going head to head with him that night, you know, they're going to do the-- MGM is guaranteeing the gate to them.

So they're guaranteeing them the money, no matter whether they sell tickets or don't.

We actually sold the tickets that we're selling tonight, or on Saturday night I mean.

But, yeah, I love it.

It's all, it's all healthy, good stuff.

Healthy, good stuff with Haymon and Canelo, not healthy, good stuff with MGM.

-Okay.

Have you worked that out with them?

Are you feeling better about that relationship?

-Bill Hornbuckle who runs MGM is-- I couldn't have done the Sphere without Bill Hornbuckle.

I'm under contract with MGM.

I was upset about a lot of things, and this was his olive branch to create some peace between us.

So he gave me the Sphere.

I appreciate it, and, yeah, we'll move forward after this event.

-How much have you spent on this event, this Noche UFC at the Sphere?

-20 million.

We're 20 million in.

-How much do you typically spend on a UFC pay-per-view event?

-2 to 2 1/2 million.

-Wow!

-Yeah.

The budget was 8.

It's like building a house.

You start off here, and you end up here.

-Yet your stakeholders are okay with this?

-Nobody, nobody gets in my way.

And when I want to do something, I do it.

The board came out here.

They flew out here.

The first time I met the board was when I announced this and started spending some money.

So the board flew out here, and they wanted to see what the Sphere was, what it was all about, and they were pumped.

-But I just want to make it clear: You don't want to return there because of how expensive it is.

-It's not that I don't want to return there.

I have a deal with MGM.

You know what I mean?

So I already, I'm under contract.

-For how long?

-Well, we just signed an extension.

That was all part of this thing, too.

-How many years?

-I wasn't going to sign the extension.

It was ugly with MGM.

And it's not that it's pretty now, but Bill Hornbuckle, in my opinion, did the right thing and is trying to, trying to make this right.

-Was it necessary for you to have a title sponsor for this event because of how expensive it was?

-Anytime, anytime you can get more sponsors, especially when you're spending this type of money, it doesn't suck.

Doesn't suck.

-But this is the first time that it's officially, it's Riyadh Season Noche UFC.

-Yeah.

It's the first time I think we've ever done that, but we've had title sponsors like, you know, Bud Light is one of the big sponsors for this event, too, and "presented by Bud Light" or "brought to you by Bud Light," yeah.

-Riyadh Season, though, is a festival in Riyadh, the capital of Saudi Arabia.

And so this is Saudi Arabian money that's helping fund this Mexican heritage themed event.

Does that seem strange to you?

-No, it's fascinating, actually, because when you look at what Sheikh Turki is doing right now, he is a fight fan.

He loves fighting.

He loves the sport.

And this guy has made a massive impact in a very short amount of time.

And it's funny, because I don't normally get along with a lot of the other guys in the industry, and so I didn't know how this relationship would go when we first met.

-And so everyone knows, he is the general entertainment authority chairman of Saudi Arabia.

-Right.

We met, and we sat down.

We talked about boxing and UFC and Slap and lots of other things.

And, yeah, I ended up creating a really good relationship with this guy, and I like him.

And you know me, if I didn't like him, I'd let you know I didn't like him.

But I like him a lot and think what he's doing is fascinating.

And it's interesting that that's what it took to get the big fights done in boxing.

It took Saudi Arabia-type money to make those fights.

-He has described your event as competing with Canelo.

He has said, "We will eat him."

Yet, the fight he really wants is a boxing match between Canelo and Terrence Crawford.

Does that matter to you?

-No.

Listen, on that side, they have their own, you know, I guess we'll call them initiatives or whatever it is that they're trying to do.

But you know, for me, it's all about Noche UFC.

How that plays out for him in the future, I mean, I can't see how they couldn't get a fight done with Canelo.

I mean, they're making fights right now that we thought would never get done.

-Wouldn't have happened, yeah.

-So anything is possible.

I think they could get the deal done with Canelo and Haymon.

-And then the last thing: There are talks that you may want to start a boxing league with him.

-Are there?

-How much truth is there to that?

-Anything is possible.

-Dana White, thank you so much for your time.

-Thank you.

-Joining me now to elaborate on Saudi Arabia's role in boxing and mixed martial arts is Cassandra Cousineau, a journalist at lvsportsbiz.com.

And Cassandra, I want to start with this past weekend in Las Vegas.

Dana White claims MGM guaranteed the Canelo gate.

MGM doesn't want to comment on this.

But what about Canelo's side of this story?

(Cassandra Cousineau) So Canelo's former home, broadcast home, Showtime Sports and Boxing.

Stephen Espinoza has said, For the last time, we did not guarantee the gate.

He has not said anything, though, which is very interesting to me that Canelo did not respond to it.

-So Dana White is reporting a $22 million gate.

Granted, he said that they spent $20 million to put this event on.

-Probably more.

-What do we know about the gate for Canelo?

-That that gate will be confirmed by the Nevada State Athletic Commission in about two weeks, but it was a sellout.

Canelo is averaging anywhere between 18 and $20 million for his fights in Las Vegas.

Now, he did fight Edgar Berlanga and he did go head-to-head with UFC, but it was still a sellout.

So I expect it to be somewhere in that, in that range.

Gate is just one part of the equation, because there's pay-per-views as well.

What do we know about those numbers?

-Yeah.

So they never actually announced their pay-per-view.

It's kind of like Twitter folklore what that pay-per-view will be for both of them, right.

Well, the numbers for UFC belong to ESPN in terms of the pay-per-view.

So it'd be up to ESPN, but I can tell you that the Commission will get the numbers from the promoter, and those numbers will be public in terms of what the actual live gate is.

-Okay, but not pay-per-view numbers?

-Right.

-Okay.

Was there a clear winner between the two events, in your opinion?

-Fans.

I think the fans won.

Canelo is the face of boxing, not just in the United States, but internationally.

He's the most recognized fighter in the world.

And then I also think what the UFC was able to do with the Sphere was something we've never ever seen before.

It was kind of like you went to Disneyland and they dropped an octagon in the middle of the whole thing.

And so I think that it was a spectacular night for Las Vegas.

Especially hotel occupancy was a winner there, and I think tourism was a winner as well.

Combat sports are important for Las Vegas.

They are-- combat sports are kind of part of the fabric of sports in Las Vegas.

I think without boxing, specifically, we don't have these arenas.

Without-- without UNLV, we don't have the arenas, we don't have the sports tourism in this city.

So I think the winners were fans, and I think ultimately the city of Las Vegas.

-So Saudi Arabia's involvement in all of this helped put on that UFC event.

Turki Alalshikh, the chairman of Saudi Arabia's general entertainment authority, was at the UFC event, sitting next to Boxer Terence Crawford, who he wants and the world wants to fight Canelo, who's fighting down the street.

It's all so tangled and very, very interesting.

What's the latest on that fight possibly happening?

And is Saudi Arabia good for boxing?

-So I sat down with Top Rank founder, Bob Aram, who's been in the business for a long time, and I asked him that question.

Good for boxing and good for Las Vegas.

And what he says, and I quote him, "Rising tide lifts all boats," and that they have been very good for boxing.

They have made fights that people wanted to see.

We saw Francis Ngannou and Tyson Fury, for example.

And then in addition to that, we got Terence Crawford in Los Angeles, not in Las Vegas, but they're really working hard on that Canelo fight.

I think that's a fight that most people really want to see, whether you're a boxing enthusiast or if you're someone who is just casually looking at the sport.

So I do think they're good for boxing, because somebody has to pay for this.

There's not a lot of money being made in boxing, because it's a niche sport.

And it's also shrinking because these fighters don't fight very often.

So yes.

Now, what does it do to Las Vegas is what I'm really curious to see.

-Right.

So many of these big fights have taken place in Saudi Arabia.

This is supposedly Saudi Arabia's way of diversifying its economy by promoting tourism for Riyadh Season.

Yeah.

-So, how is it good for Riyadh Season if they're putting on fights in Las Vegas?

-Well, do they want us to go to Saudi Arabia?

Do they want to promote tourism to Saudi Arabia?

I have so many questions as a woman and as a journalist.

-I think that is, I mean, it is to promote the Kingdom of Saudi Arabia through sports and entertainment.

Boxing and MMA is just kind of a little part of it, not the whole thing, but I think it's really important to keep an eye on that and what does it do for this city?

And I asked Bob Aram, Do the big fights still come to Las Vegas?

And he says they will.

Maybe not all of them.

-Last thing: When we talk about is this good for boxing, you and I were talking off camera that there has been the purchase of a boxing publication by this Turki Alalshikh.

What's behind that?

-We don't know what's behind it.

I assume that it is to further the agenda, to promote things that are happening in Riyadh Season, which is from October to March.

And so-- and although the UFC was part of that and so was Terence Crawford, kind of outside of Riyadh Season, but I think it is going to be a promotional tool.

I think there's some kind of back and forth between some journalists who work at Boxing Scene and Turki.

That did not look favorably upon him.

There were some things that were said on Twitter, and then, lo and behold, he buys Boxing Scene.

And so there's some angst and, I think, ambivalence upon within the community, whether or not this is being done in good faith.

We'll see.

It's not been formally announced, but those who work at Boxing Scene have been told this.

So it is a thing.

-Cassandra Cousineau, lvsportsbiz.com, also the Sportsnista on social media, thank you for joining-- -Thank you.

- --Nevada Week.

And thank you for watching.

For any of our resources discussed, go to vegaspbs.org/nevadaweek.

And I'll see you next week on Nevada Week.

♪♪♪♪♪