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    Small US college towns reel amid Trump immigration crackdown: ‘They need international students’

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    For a town of 20,000 residents a few miles from the Indiana state line in rural Ohio, the city of Oxford boasts an outsized number of international eateries.On High Street, the Phan Shin Chinese restaurant sits a few doors down from the Happy Kitchen, another Chinese food joint, which is next door to the Krishna Indian restaurant. There’s a French bakery and even a Uyghur restaurant selling central Asian fare.The diversity of international restaurants mirrors the student population attending Miami University, which in 2019 had a student body including more than 3,000 international students.But in recent years, the number of international students coming to study at US colleges has plummeted, a trend that could have devastating consequences for small college towns.It was the large number of Chinese students attending Miami University that prompted Fei Yang to open the MImian Chinese restaurant in Oxford, a full 60 miles from his home, in 2018.“There used to be 2,000 to 3,000 [Chinese] students but now there is like 300, 400 maybe,” says Yang. “Covid-19 stopped a lot of people coming. Before we used to make real Chinese food, now we make the American versions.”In fall 2019, Miami University admitted 2,895 international students, mainly from China, Vietnam, India, and elsewhere – last year, the number plummeted to 750. Since international students at Miami University are not receiving scholarships, they typically pay more than $65,000 in tuition, fees, housing and food, according to 2024-25 estimated cost of attendance figures, which represents a potential loss of about $140m for the university, local businesses and the thousands of workers they collectively employ.Across the US, an estimated 150,000 fewer international students are expected to study at US colleges and universities this fall compared to last year, a 40% drop.While the reasons are varied, the Trump administration’s response to protests on campuses against Israel’s war on Gaza has played a major role in fueling the falloff by driving fear of arrest and deportation into many would-be incoming international students.In June, the state department announced more severe screening and vetting processes for international students intending on studying in the US, including ordering applicants to turn their social media profiles public.Students from Turkey, Palestine, and Iran have been detained, imprisoned and deported or self-deported for expressing their first amendment rights, rights that are protected by the US constitution, regardless of whether they are citizens of the country or not. About 6,000 student visas have been revoked this year with some students seeing their visas revoked for alleged minor wrongdoings such as speeding.International student enrolment, however, has been in decline since before the current administration’s crackdown. The tariffs regime initiated on China during the first Trump administration, as well as Covid-19 pandemic travel restrictions in 2020, prompted a massive fall in students traveling to the US for higher education five years ago. In the years since, Chinese students have increasingly chosen to study in the UK and Australia in place of the US.While mid-sized and large cities and wealthy small towns such as Ithaca, New York, – home to Cornell University – can typically take the financial hit from the loss of thousands of international students due to their diversified economies, less affluent towns, whose economies have never fully recovered from the loss of students on-site during the pandemic, remain imperiled.According to the US Department of Commerce, international students are thought to have contributed around $50bn to the US economy in 2023 in tuition, rent, food, taxes and a host of other ways. In Ohio, Kentucky, and Iowa, which rank among the lowest states for GDP growth in the country, and which are Trump strongholds, their economies are set to lose as much as $200m, $45m and nearly $43m respectively. Florida’s economy could see losses reaching as much as $243m.“We tend to think that foreign students only go to big Ivy League schools in big cities. But if you look at a recent Brookings Institution report, it is clear that every school, small, medium and large, in every town or city – small, medium or large need income from international students,” says Tara Sonenshine, Edward R Murrow professor of practice in public diplomacy at Tufts University.In West Lafayette, Indiana, the 50,000 students who attend Purdue University make up the overwhelming majority of the city’s population. Almost one in four of those at Purdue in 2024 were international students, most paying full tuition and board costs. These students, many who attend to learn cutting-edge agriculture practices, help employ more than 10,000 people, making Purdue University the largest employer in the region.It’s a similar story for rural Illinois, where one-quarter of students at the University of Illinois Urbana-Champaign campus are from overseas – one of the highest ratios of any private or public college in the country. There, an international student studying for a four-year undergraduate degree can net the college and offshoot businesses about $200,000 in tuition and other fees.In Oxford, Ohio, one of the biggest issues international students help local businesses with is providing custom during the six-week period from mid-December to the end of January when there are no classes at Miami University. At that time, other than permanent residents, the only people in town are international students.“Our business community is very dependent on Miami University students. Oxford’s population is about 20,000, of which 17,000 or more are Miami University students,” says Oxford city manager Doug Elliott.“We have a lot of homes that were converted into student housing. That’s typical for small college towns like us.”Elliott notes that aside from the financial benefit, international students bring energy and diversity in the form of festivals and gatherings to parts of the US that would otherwise never get to experience the wider world.“Cutting off visas for international students, combined with demographic shifts in America and the declining enrolment in college, in addition to the general disdain for immigrant populations coming here,” says Sonenshine, “would all add up to chaos and potential closures of small schools who rely on a broader pool on enrolment.” More

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      Americans and US food banks brace for Trump cuts: ‘Battling hunger is no longer a priority’

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      Americans are bracing for the impact of the largest cuts to the government’s food assistance program for low-income people in US history that have begun to take effect as a result of Donald Trump’s One Big Beautiful Bill Act.Effective 1 October, the beginning of fiscal year 2026, funding for Snap-Ed, part of the Supplemental Nutrition Assistance Program (Snap) that provided funding for food banks across the US, is being eliminated. The cuts are part of the sweeping spending bill Trump signed in July.A report this month by the Center on Budget and Policy Priorities noted “some low-income families will see their food assistance terminated or cut substantially (or will be denied benefits) this fall, though most current participants will face cuts when their SNAP eligibility is next recertified,” with estimates that 4 million Americans in a typical month will lose some or all of their Snap benefits when the cuts are fully implemented.A Snap recipient in Camden county, New Jersey, who works as a cake decorator at a small business and requested to remain anonymous, said their Snap benefits were cut off in September without receiving a notice.“Snap was my way to finally not pay half to three-quarters of my paycheck on groceries. Now, I have nothing in my house regularly and it just feels like no one wants to help people any more,” they said. “I only got a little over $110 a month, but it helped tremendously.”They said it’s made it more difficult to work at a job they love, but that doesn’t pay enough.Jessica Griffin of Fort Smith, Arkansas, a mother of three, said she lost her job about five months ago and has struggled to find another, with her family relying on her husband’s income.After rent and utility bills, there isn’t much left over to buy groceries and she doesn’t have reliable transportation to get to food banks, she said.“I used to be able to buy $100 worth of groceries a week to feed a family of five, now even with one child out of the house $100 will only go a couple days,” she said. “The rent rates are so high now as well as groceries that families can barely afford to feed their kids and keep a roof over their heads at the same time. So it almost feels like we have two options, to either live in a house or live on the street and not starve.”View image in fullscreenFunding cuts to states, which will be expected to share costs of Snap for the first time as well as cover more administrative costs, are phased for fiscal years 2027 and 2028, but several provisions and changes to Snap are being implemented as states have to grapple with drastic costs shifted on to them from the federal government.“States don’t have enough administrative staff or capacity to handle this,” said Gina Plata-Nino, interim Snap director at the Food Research and Action Center. “I think we’re on a downward path. Polling and data is showing that one of the biggest obstacles that people are having in being able to eat is just how expensive food is at the moment. This is a direct result of tariffs and other policy choices that the administration has made. It’s something that everyone, regardless of income, can understand.”The looming Snap cuts come as food prices are still rising under the Trump administration and are expected to continue rising due to tariffs and labor shortages in the food industry due to Trump’s immigration policies.From January 2022 to August 2025, overall food cost in the US increased by about 17.8%, according the consumer price index, and has increased 2.0% since January 2025, when Trump took office. Trump’s tariffs are expected to drive further increases, with food prices set to rise 3.4% in the short term and stay 2.5% higher in the long run, according to the Yale Budget Lab.Food banks have been struggling across the US to keep up with demand and manage rising food prices, while bracing for further cuts, higher prices, and a surge in demand once Snap cuts begin taking effect.At a food bank in Charlottesville, Virginia, Jane Colony Mills, executive director of Loaves & Fishes, said the food bank has “experienced a 20% increase in the numbers of people coming for food assistance in 2025, likely driven not only by the cost of groceries in our community, but by the overall cost of living in Charlottesville and Albemarle area.”She noted their food supply has decreased as well, since they rely on food that stores cannot sell, and have also been affected by cuts at the US Department of Agriculture (USDA) to programs that support food banks. Colony Mills noted Snap cuts haven’t taken effect yet in Virginia, but local social service departments are bracing for those reductions or cancellations starting 1 October.“People who rely on these incremental supports will be struggling even more to provide food for their households each month,” she added.In Washington, the Thurston County Food Bank said they are bracing for significant cuts to Snap that will increase demand and make it more difficult to meet the current demand, let alone handle increases. They have already had to lay off staff positions funded by the Snap-Ed program that was cut by the Trump administration.“We have been told to brace for cuts that could be as much as 20% to 25% of the food we received in prior years. For us, 25% is $1m worth of food in 2024 prices, so with rising food costs, we can assume that is a gap of well over a million dollars,” said executive director of the Thurston County Food Bank.Ahead of the cuts to Snap and rising food prices, the Trump administration announced the cancellation of the annual hunger survey that measures food insecurity in the US and food researchers at the USDA were put on leave.USDA deferred comment to a press release, where they claimed “these redundant, costly, politicized, and extraneous studies do nothing more than fear monger.”The decision is viewed by anti-hunger advocates as an effort by the Trump administration to obfuscate the impacts of their cuts to Snap and other policies affecting food insecurity for Americans.“By cancelling the survey, USDA is sending a signal that tracking and battling hunger is no longer a priority,” Eric Mitchell, president of the Alliance to End Hunger, said in a statement. “It is further troubling that the decision comes amid predictions that hunger may increase in the coming months and years. Hunger will not disappear simply because it is no longer tracked.” More

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      Why Trump is backing Argentina’s Thatcherite economics | Heather Stewart

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      “We’re backing him 100%. We think he’s done a fantastic job. Like us, he inherited a mess.” Donald Trump gave his enthusiastic endorsement to Javier Milei’s radical economic experiment when the pair met in New York last week.The US has declared itself ready to offer more than rhetorical support to the chainsaw-wielding Argentinian president in the coming days, as Buenos Aires stands on the brink of a fresh financial crisis.The US Treasury secretary, Scott Bessent, said the US was “ready to do what is needed”. He suggested the Federal Reserve could offer Buenos Aires a $20bn (£15bn) dollar swap line – a crucial crisis-fighting tool – or the US could even buy the country’s bonds directly.US administrations have rallied support for Argentinian governments in the past – Bill Clinton was a fan of Carlos Menem’s 1990s reforms, for example. But Trump’s readiness to wade in directly is the latest example of his determination to use economic tools for political ends: in this case, propping up an ideological ally.Milei swept into power two years ago, on a wave of frustration and discontent with the economic status quo.Like Trump and Boris Johnson, he eschewed the usual conventions of politics and promised to smash up the establishment and remake the state on behalf of the people.But while Milei’s political playbook may echo Trump’s, with its embrace of chaos and showbiz, his economic policies owe something to another radical with big hair – Margaret Thatcher, whom the Argentinian president has called “brilliant”.Like the Thatcher governments in the UK, Milei sees slaying the dragon of inflation as an overriding priority. The challenge in Argentina is on a completely different scale to 1980s Britain, however: the inflation rate peaked at more than 25% a month soon after Milei came to power.But aspects of his approach, including a systematic onslaught on trade union rights, public spending cuts and a wave of privatisations, have echoes of Thatcherism.Despite lacking a parliamentary power base, Milei has succeeded in cutting deep into pensions and public sector wages – and more than 48,000 public sector workers have lost their jobs.He travelled to CPAC, the Conservative Political Action Conference, in the US, to pose on stage next to a chainsaw-wielding Elon Musk, whose Department of Government Efficiency (Doge) was partly inspired by Milei’s aggressive style.Argentina’s tough policies have won plaudits from the International Monetary Fund (IMF), which granted a new $20bn lifeline to Argentina in April.On stage at the IMF’s meetings in Washington that month, its managing director, Kristalina Georgieva, proudly pinned on to her green jacket a tiny silver chainsaw badge, handed to her by Argentina’s minister for deregulation, Federico Sturzenegger.But while Milei’s “shock therapy” may have met with approval in Washington – and indeed in financial markets – the Argentinian economist and campaigner Lucía Cirmi Obón highlights its human impact.“The macroeconomic changes implemented by Milei have not shown – nor do I believe they will show – any positive impact on people’s quality of life. In practice, what we are seeing is an economic recession,” she told the Guardian.“The main reasons are that real wages fell, and the opening of imports also dismantled a large part of national industry. On top of that, there were cuts to the number of people receiving a pension, support for childcare, for people with disabilities who used to receive pensions. All of the policies the population used to receive from the state have been reduced.”skip past newsletter promotionafter newsletter promotionUnemployment has risen by two percentage points, but she argues that there is also significant hidden unemployment – with former factory workers crowding into poorly paid gig-economy jobs such as Uber driving, for example. Household debt is rising, and because many of the occupations targeted by cuts are female-dominated, the gender pay gap has widened, undoing six years’ worth of progress.Obón adds that while Milei’s approach was meant to unleash the corporate sector, to open the way for surging economic growth, investment as a share of GDP has actually fallen.Meanwhile, determined to squash inflation, Milei has maintained the peso’s link to the dollar – a trigger for so many crises in Argentina over the years.For several decades, the peso has been pegged – within limits – to the greenback, which circulates within Argentina as an alternative currency, in which many citizens like to hold their savings, especially in times of trouble.Milei had advocated full dollarisation during the election campaign – a policy that would leave Argentina without the right to set its own interest rates. When he came to power and allies rejected that plan, he instead devalued the peso by more than half, willing to wear the resulting inflation in the hope of stimulating exports.But the currency has nevertheless come under continued selling pressure – exacerbated by the political uncertainty unleashed when Milei suffered a disastrous showing in local legislative elections in Buenos Aires province, which he had himself called a “life or death battle”.Since those local elections, and amid a mounting clamour of corruption claims against Milei’s powerful sister, Karina, the peso sell-off has accelerated. The central bank burned through more than $1bn of reserves in a week trying to prop up the currency, before Bessent announced Washington was ready to step in.As well as political fellow feeling, some experts suggest geopolitics may have been another motivation for Washington’s intervention, with China becoming increasingly influential in Latin America.The peso rallied and the markets calmed after Bessent’s comments, but as the costs of “shock therapy” bite and Milei looks to crucial midterm elections in October, the Argentinian public face a volatile period ahead. More

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      The American system is badly broken | Bernie Sanders

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      Let’s take a deep breath and, for one moment, forget about Donald Trump, Jimmy Kimmel, the UN, Charlie Kirk, Gaza, a government shutdown and the other crises that we face.Let’s talk instead about the reality which the corporate-controlled media and the corporate-controlled political system don’t talk about very much.What we are witnessing right now is the rise of two Americas. One for the billionaire class. And one for everybody else.In one America, the richest people are becoming obscenely richer and have never, ever had it so good. That America is overflowing with unimaginable wealth, greed and opulence that makes the Gilded Age seem very modest.And then there is a second America – an America where a majority of people live paycheck to paycheck, struggling to secure the very basic necessities of life – food, healthcare, housing and education.The simple truth is that never before in our history have so few had so much wealth and power while so many live in economic desperation.In the first America, one man – Elon Musk, the richest man in the world, worth more than $480bn, owns more wealth than the bottom 52% of American households. After spending $290m to put Trump back into the White House, Musk has become more than $180bn richer since election day. That’s a pretty good return on his investment.But that’s apparently not good enough for Musk. In order to keep him “motivated” as CEO, Tesla’s board proposed giving him a $1tn pay package if he meets certain goals. A trillion dollars.Jeff Bezos, the fourth wealthiest person in the world, has a fortune of $233bn. He can sail to Venice on his $500m yacht for his reported $50m wedding, where he gave his wife a $3m-$5m ring – because, among other things, his effective tax rate is just a reported 1.1%.Mark Zuckerberg, the third richest person in the world, is worth $258bn. He has spent $110m to buy 11 homes in Palo Alto, California, to create his own private compound, and another $270m for more than 2,300 acres in Hawaii with a 5,000 sqft underground bunker and three yachts reportedly worth more than $530m.Larry Ellison, the second wealthiest person in the world – worth $377bn – recently became nearly $100bn richer in a single day. He owns a private island in Hawaii and a fleet of jets, and now he’s reportedly trying to buy up major media companies such as Warner Bros and CNN.Together, these four men alone are worth more than $1.3tn. But it’s not just them. The top 1% now owns more wealth than the bottom 93%.The 1% lives in a world completely removed from ordinary Americans. They don’t ride overcrowded subways to get to work or sit in traffic jams to get home. They fly on private jets and helicopters they own. They live in mansions all over the world, send their kids to the most elite private schools and vacation on their own islands. And, for fun, some spend millions to fly off into space on their own rocket ships.And then there is the other America, where the vast majority of our people live. For them, the economy is not just broken, it is collapsing. In this America, despite a massive increase in worker productivity, real weekly wages for the average American worker are lower today than they were more than 52 years ago.In this America, people are unable to afford a doctor’s visit (if they’re lucky enough to find one); are paying over half of their limited incomes on rent or a mortgage; and are unable to afford the outrageous cost of childcare or send their kids to college. In this America, the price of vegetables, fruit and other healthy foods is beyond the budget for many.For most Americans, the system is not just broken, it is collapsing and is increasingly resembling life in the third world.Everyone needs healthcare. Yet today, more than 85 million Americans are uninsured or underinsured – a number that will rise by at least 15 million under Trump’s so-called big, beautiful bill.Everyone needs housing. Yet today, nearly 800,000 Americans are homeless and more than 20m households pay more than 50% of their limited incomes on rent or a mortgage. Since 2000, average rents have more than doubled and the median price of a home has soared to more than $435,000.Everyone needs a decent education. Yet today, our childcare system is broken and wildly expensive. Many of our public schools are dilapidated with teachers underpaid and underappreciated, and American students are falling behind in math, science and reading compared with their international peers. College education is unaffordable for millions and vocational schools fail to train the workers we desperately need.Everyone needs a secure retirement. Yet, nearly half of older workers have no retirement savings and no idea how they will ever retire with any shred of dignity or respect. Meanwhile, 22% of seniors are trying to survive on an income of less than $15,000 a year.Enough is enough.As supreme court justice Louis Brandeis said in 1933: “We can have democracy in this country or we can have great wealth concentrated in the hands of the few, but we cannot have both.”That warning is even more relevant today.In this pivotal moment in American history, we must create a government and an economy that works for all, or we will continue sliding into oligarchy – where the billionaire class controls our government, our economy and our future.Let me say to my fellow Americans: I know day-to-day life can take a toll, but we must not allow ourselves to fall into despair. If we do not allow ourselves to be divided up by Trump and his oligarch allies, we can change the path we are on.The choice is clear. Let’s stand together for democracy and justice. More

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      Jerome Powell dismisses Trump’s criticism of ‘political’ Fed as ‘cheap shot’

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      The US Federal Reserve chair, Jerome Powell, pushed back hard against claims the central bank allows politics to drive decisions, in the midst of an extraordinary battle over its independence.Donald Trump, who is seeking to increase his administration’s control over the Fed, has branded Powell “a very political guy” after he declined to bow to the president’s public demands for drastically lower interest rates.The White House has launched an unprecedented campaign to overhaul the Fed’s rate-setting board of governors, installing an administration official and trying to fire a Biden appointee over unconfirmed claims of mortgage fraud.But on Tuesday, Powell, who is typically diplomatic when speaking publicly, roundly dismissed one of the common allegations made by Trump and his allies: that the Fed is somehow political when making key decisions about the world’s largest economy.“Many people don’t believe” the Fed is simply allowing economic data to drive its decisions, Powell acknowledged at an event in Rhode Island. “But the truth is, mostly people who are calling us political, it’s just a cheap shot.”He did not mention Trump by name. But the president has become the most prominent critic of the Fed and Powell since returning to office.skip past newsletter promotionafter newsletter promotionIt comes a week after the central bank ordered its first rate cut since December, a move to stabilize a wobbling labor market, even as Trump’s tariffs continue to push up prices.“Near-term risks to inflation are tilted to the upside and risks to employment to the downside – a challenging situation,” Powell reiterated on Tuesday.Stephen Miran, the Trump official now serving as a Fed governor, takes a different view. He dissented from every other policymaker on the central bank’s board of governors last week to advocate for a deeper rate cut.“Relatively small changes in some good prices have led to what I view as unreasonable levels of concern,” Miran argued in a speech earlier this week, claiming that tariffs would ultimately lead to “substantial swings in net national savings” for the country.Reuters contributed reporting More

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      Federal Reserve cuts interest rates by a quarter point, for first time in nearly a year – as it happened

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      The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market.This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since November 2022.Stay tuned for a press conference Fed chair Jerome Powell is expected to give at 2.30pm ET.The US Federal Reserve cut interest rates by a quarter point today, a move that will reverberate across the economy in the coming months. Fed chair Jerome Powell spoke at a closely watched press conference about the Fed’s decision.Here’s a summary of what happened this afternoon:

      The Fed cut interest rates by a quarter point, the first cut since December 2024. Rates are now at a range of 4% to 4.25%.

      Fed economists also released projections, which point to a majority expecting at least one more rate cut by the end of the year.

      During his press conference, Powell said the rate cut was a move toward “risk management” instead of a testament to the strength of the economy. Economists at the Fed are concerned about a weakening labor market, which could see higher layoffs if worsened.

      But Fed officials are still concerned about inflation. Powell said that prices are likely to continue going up toward the end of the year as companies pass along the price of tariffs to consumers.

      A question remains: Will tariff-related inflation be a one-time price increase, or will it be persistent? Powell said economists at the Fed expect it to be more of a one-time price increase but that the Fed’s just is to make sure it’s not persistent.

      With pressure from the labor market and prices, Powell described it as an “unusual” situation for the Fed to manage. “Our tools can’t do two things at once,” he said.

      Powell also took questions about the recent appointment of Fed governor Stephen Miran, who was confirmed by the Senate on Monday. Powell assured that the Fed’s independence is a priority to the entire committee that sets interest rates. And the Fed’s structure offers protection: For a single member to have outsized influence, they need to “make really strong arguments based on the data and one’s understanding of the economy… That’s in the DNA of the institution.”
      Powell responded to a question about comments new Fed governor Stephen Miran made at his confirmation hearing in front of the Senate earlier this week.Miran said that the Fed actually has a “third mandate”, which is to “moderate long-term interest rates”.The introduction of a third mandate is in opposition to how Powell has framed the Fed’s “dual mandate” – balancing unemployment and price increases.“We always think of it as the dual mandate,” Powell said, explaining that moderate interest rates come from stable inflation.“As far as I’m concerned, there’s no thought of … incorporating that in a different way,” he said.Markets appear to be relatively unresponsiveness to the Fed’s highly anticipated rate cut. Both the S&P and Nasdaq are both slightly down for the day, while the Dow is up.It’s a stark contrast to last week, when markets shot up at data that showed wholesale prices falling slightly in August, and consumer inflation being within expectations for the month.The overall picture that Powell has painted of the economy in his press conference isn’t necessarily one that’s thriving. Powell said that the economy has left the Fed in an “unusual” situation, and said that the Fed’s rate cut is more about “risk management” rather than an testament to a strong economy. The recent rate cut could cause inflation to rise, but risks of the job market worsening under current rates are higher.“We’ve seen much more challenging economic times from a policy standpoint, the standpoint of what we’re trying to accomplish, it’s challenging to know what to do,” Powell said. “There are no risk-free paths now.”Powell was, again, questioned about Stephen Miran’s role as both a new Fed governor and Trump’s chair to the Council of Economic Advisor.A reporter asked Powell how the Fed can be nonpolitical if one of its voting members is explicitly connected to politics. Powell emphasized that there are 12 voting members and 19 total participants on the board.“The only way for any voter to really move things around is to be incredibly persuasive, and the only way to do that in the context in which we work is to make really strong arguments based on the data and one’s understanding of the economy,” Powell said. “That’s really all that matters. … That’s in the DNA of the institution, that’s not going to change.”A Politico reporter asked Powell how Americans will be able to tell if the Fed, which has historically been nonpartisan, starts to be partisan.“We don’t frame these questions at all or see them in terms of political outcomes. In another part of Washington, everything is seen through the lens of does it help or hurt this political party, this politicians,” Powell said. “That’s the framework. People find it hard to believe that’s not at all the way we think about things at the Fed. We take a longer perspective, we’re trying to serve the American people as best as we can.”“I think you would be able to tell. I don’t think we’ll ever get to that place.”When asked about Fed governor Lisa Cook’s lawsuit against Donald Trump for her firing (a court reinstated her last week), Powell said: “I see it as a court case that I would see as inappropriate for me to comment on.”Powell said that Fed officials are expecting inflation from tariffs to be a one-time price level increase, though “we can’t just assume that, [and] or job is to make sure that’s what happens.”“We continue to expect it to move up,” Powell said of prices. “Maybe not as high as we would have expected it to.”He added that the case for “persistent inflation” is weaker.Which is why the Fed cut rates, what he described as a “neutral” policy, given that inflation isn’t out of control, but the labor market has slowed down.But Powell acknowledged that it’s “an unusual situation” – the Fed would most likely want to be more careful with rate cuts because of inflation, but has to be wary of the labor market.“Our tools can’t do two things at once,” he said.Powell is again describing the labor market as being in a “curious balance” – a term that he first used in his Jackson Hole speech last month.The labor market is balanced out, meaning that the supply of workers is on par with the demand that employers have for workers, but it’s not necessarily a sign of strength.Because of immigration, “the supply of workers is coming down”, Powell noted. “At the same time, demand for workers has come down quite sharply to the point where we see what I’ve called a ‘curious balance’.”“Typically, when we say things are in balance that sounds good,” he added. “But in this case, the balance is because both demand and supply have come down sharply, now demand is coming down more sharply because we now see the unemployment rate going up.”A reporter asked Jerome Powell about Stephen Miran’s appointment, specifically on the fact that Miran is the first Fed governor to also have a role in the executive branch while also serving on the Fed board. Miran is the chair of the Council of Economic Advisors.“The committee remains united in pursuing our dual mandate goals,” Powell said in response. “We’re strongly committed to maintaining our independence and beyond that, I really don’t have anything to share.”Fed chair Jerome Powell just started his press conference on the Fed’s rate cut decision.As outlined in the board’s statement, Powell said that the unemployment rate, while still generally low, has edged up.“Job gains have slowed and the downside risks to unemployment have risen,” he said.Powell pointed to new immigration policy as a major factor in the labor market slowdown.“A good part of the slowing likely reflects a decline in the growth of the labor force, due to lower immigration and lower labor force participation,” Powell said. “Even so, labor demand has softened and the recent pace of job creation appears to be running below the breakeven rate needed to hold the unemployment rate constant.”The median projection for the unemployment rate, which is currently at 4.3%, sees it rising to 4.5% by the end of the year.Powells also said higher tariffs have begun to push up some prices in some categories of goods, though the full impact have yet to be seen. Price increases due to tariffs could be a one-time price increase or it could lead to “persistent” inflation.“Our obligation is to ensure that a one-time price increase in the price level does not become an ongoing inflation problem,” he said.Much of this is what Powell said during his speech last month at the Fed’s symposium in Jackson Hole, during which he first suggested that the Fed was looking toward an interest rate cut.In economic projections released after the Fed’s rate-cute decision, members of the Fed’s board submitted their economic predictions for the economy over the next few years.A slight majority of board members seem to expect another rate cut by the end of the year, while a majority see more rate cuts in 2026. Board members are predicting a slight increase in unemployment, though they seem to think that inflation will largely cool in 2026 and 2027.It’s a more dovish take on the economy than how the Fed is describing the current economy in its board statement, where the Fed said that the labor market has slowed and inflation is going up – a dynamic that points to an economic condition known as stagflation.Before Fed chair Jerome Powell can expand on the Fed’s decision in his 2.30pm ET press conference, right now we just have the Fed’s statement on its rate cut to parse through why officials voted for a cut.Notably, the Fed’s rate-setting board took note of the jobs market.“Job gains have slowed, and the unemployment rate has edged up but remains low,” it said. It also noted that “inflation has moved up and remains somewhat elevated”.This is a change from the board’s last meeting in July, when it said that labor market conditions “remain solid”. And this is the first time the board has said inflation is going up.The statement also noted that Stephen Miran, Trump’s appointee to the board who was confirmed on Monday, was the only member of the board to vote against the rate cut. Miran wanted to lower rates by a half-point, instead of a quarter-point.The Fed just announced an interest rate cut by a quarter point, which was largely anticipated amid a weakening labor market.This is the first time the Fed has cut rates since December 2024. Rates now stand at a range of 4% to 4.25%, the lowest since November 2022.Stay tuned for a press conference Fed chair Jerome Powell is expected to give at 2.30pm ET.Inflation rose slightly in August as companies continued to push the cost of tariffs on to consumers.The newest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year – the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1% after going up in July.Despite this slight uptick in inflation, Wall Street remains optimistic that the Federal Reserve will cut interest rates at the central bank’s board meeting next week. The Fed is under intense pressure from Donald Trump to cut rates, but the decision looks likely to be led by fears that the US jobs market is weakening.Investors are anticipating a quarter-point rate cut. Rates currently stand at a range of 4.25% to 5.5%.The Fed chair Jerome Powell indicated last month that the central bank was gearing up to cut interest rates for the first time this year.For months, policymakers defied public calls from Trump to lower rates – and brushed off his increasingly aggressive criticism of the Fed’s decision to hold them steady.“With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said in a closely scrutinized speech at the Jackson Hole symposium in Wyoming, highlighting a “challenging” dichotomy of risks: that Trump’s tariffs might increase inflation, while his immigration policies knock the US labor market.Concerning economic signs, including data indicating that the labor market has stalled while inflation picked up, have reinforced expectations that many policymakers will want to tread carefully in the months ahead.Trump has already suggested that he will be unhappy with the modest cut the Fed is widely expected to unveil later. Powell “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND”, the US president wrote on his Truth Social platform early on Monday, claiming: “HOUSING WILL SOAR!!!”The Trump administration’s extraordinary bid to fire Lisa Cook, a Fed governor appointed by Biden, and remove her from the central bank’s board before this meeting, has so far failed.Late on Monday, a federal appeals court rejected Trump’s request to block Cook from attending the Fed’s latest rate-setting session, which started yesterday.The president cited unconfirmed allegations of mortgage fraud as he attempted to fire Cook, who has denied wrongdoing and argued Trump has no authority to fire her. Her term is not due to expire until 2038.No president has pursued such action – and moved to dismiss a governor at the Fed, which has long been independent from political interference – since the central bank’s founding in 1913.Trump has made no secret of his hopes to increase his oversight of the Fed, calling into question the future of its longstanding independence from political oversight by publicly describing plans to swiftly build “a majority” on its board.The Trump administration raced to strengthen its influence over the Fed ahead of this week’s meeting.Stephen Miran, a senior official who served as chair of the White House council of economic advisers, was confirmed by Senate Republicans as a Fed governor on Monday evening, and formally sworn in on Tuesday.His appointment marks the first time in the history of the modern Federal Reserve, which stretches back almost a century, that a sitting member of the executive branch will also work at the highest levels of the central bank.While Miran described the Fed’s independence as “critical” during a confirmation hearing earlier this month, and pledged to preserve it as governor, his decision to only take unpaid leave from his current job at the White House, rather than resign, raised questions over his ability to operate independently.The US Federal Reserve is expected to announce the first interest rate cut since December as a two-day policy meeting nears its end.The Fed started the meeting on Tuesday, hours after Donald Trump’s new appointee narrowly won confirmation to join the central bank – while Fed governor Lisa Cook continues to fight her removal by the president.Stephen Miran, the chair of Trump’s Council of Economic Advisers, took the oath of office as a Fed governor early on Tuesday after narrowly winning a Senate confirmation vote along party lines on Monday night.There is little doubt that the Fed will make its first interest rate cut of 2025 after the latest gathering, as policymakers pivot towards shoring up a deteriorating jobs market.But concerns about political influence targeting the independent central bank looms over the gathering, as Trump repeatedly bashes Fed Chair Jerome Powell over his rate decisions, and after he moved to fire governor Lisa Cook, sparking a legal battle.On Tuesday, Trump told reporters that the Fed should “listen to smart people like me”. 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      Trump’s tariffs have hurt tea exports to the US, says Fortnum & Mason boss

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      The boss of upmarket retailer Fortnum & Mason has said Donald Trump’s trade war has hit sales of its luxury tea exports to the US and forced up prices.Tom Athron, the London-based retailer’s chief executive, said Trump’s stricter country of origin rules and the end of the “de minimis” cost exemption for parcels worth less than $800 (£587) had hit customers across the Atlantic.“The American authorities have told us – this is the tea industry in its entirety – that if you’ve got tea from China and India in your tea, then its country of origin [is] China or India, and therefore those enormous tariffs apply,” he told the Financial Times.Trump, who landed in the UK on Tuesday for an unprecedented second state visit for a US president, last month imposed a 50% tariff on imports from India as a punishment for buying Russian oil.And earlier this year, the US administration raised tariffs as high as 145% on Chinese goods as the trade war intensified, before dropping them to 30% in May to facilitate talks between the two trading giants. The world’s two largest economies held talks in Madrid this week to try to reach a potential deal.For a 250g canister of loose leaf Royal Blend tea, which retails to US consumers at $27.85, Fortnum’s has now been forced to charge delivery fees starting at $25.41 owing to the changes to US taxes and duties.The 318-year-old retailer, which holds two royal warrants, was not previously liable for any tariffs on the majority of its deliveries to US customers.US custom agents assess whether a “substantive transformation” has been made to a product to decide whether its country of origin is different from where the product has been sourced.skip past newsletter promotionafter newsletter promotionThis process can be unclear to retailers, while the scrapping of “de miminis” rules has led to customers being wary of buying Fortnum & Mason’s products, which are popular with expats and international buyers.“A lot of our things are sent as gifts [so] if you’re living in New York and I’m sending a present to you, I want to be sure that you’re not going to be landed with a $200 bill on receipt of your parcel,” said Athron. “It’s all in hand, logistically we’re immaculate, it just means prices will go up for US consumers.”Overseas sales of Fortnum & Mason’s goods, including its famous hampers, were £12.5m in the year to July 2024, accounting for about 5.5% of total revenues.Wider inflationary pressure has led the retailer to raise the UK price of a 250g canister of loose leaf Breakfast Blend tea by almost 40% over the last five years. More

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      Donald Trump maelstrom likely to leave US economic model unrecognisable | Heather Stewart

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      Donald Trump observed blithely last week that if his cherished tariff regime is struck down by the US supreme court, he may need to “unwind” some of the trade deals struck since he declared “liberation day” in April.It was a reminder, as if it were needed, that nothing about Trump’s economic policy is set in stone. Not only does the ageing president alter his demands on a whim, but it is unclear to what extent he has the power to make them stick.Yet even if the “reciprocal” tariffs first announced on 2 April are rolled back, they are only one aspect of a much wider assault on the last vestiges of what was once known as the “Washington consensus”.To name just a few of Trump’s recent interventions, he has taken a 10% government stake in the US tech company Intel, demanded 15% of the revenue of Nvidia’s chip sales to China and suggested the chief executive of Goldman Sachs should go.This at the same as taking a sledgehammer to Federal Reserve independence by lobbing insults at the chair, Jerome Powell, and trying to sack Lisa Cook from the central bank’s board.The head of the Bureau of Labor Statistics was removed by Trump after a run of poor jobs data; the chief of the National Labor Relations Board, Jennifer Abruzzo, was fired, too.The tech bros who back Trump loathe the NLRB for its role in upholding workers’ rights – mandating unionisation ballots at Amazon warehouses, for example.Trump’s approach is simultaneously systematic, in its determination to smash existing norms, and utterly chaotic. It is hard to categorise: corporate America is being unleashed – through the wilful destruction of environmental and labour standards, for example – and brought to heel.The leftwing senator Bernie Sanders welcomed Trump’s efforts to take a stake in Intel in exchange for government grants, for example – something he advocated in the Guardian back in 2022 – while some Republicans have condemned the approach as (heaven forbid) “socialism”.Partly because it coincides with the AI-fuelled stock boom that has propelled the value of tech companies into the stratosphere, the market response to this torching of the status quo has so far been modest.Whatever emerges from another three and a half years of this maelstrom is likely to be unrecognisable as the US economic model of recent decades.Its destruction has not happened overnight. The days were already long gone when the US, as the world’s undisputed economic superpower, could export free market, financialised capitalism worldwide.After the 2008 crash, the conditions for which were created in Wall Street boardrooms, any moral or practical claim the US had to offer an economic example to other nations evaporated.As the turmoil rippled out through the global economy, and the US government responded by bailing out large chunks of its financial sector, the lie of laissez-faire was laid bare.The crisis exposed the risks of turbocharged capitalism to countries outside the US, too – not least in the former Soviet bloc – that had been advised to adopt the model wholesale.As Ivan Krastev and Stephen Holmes put it in their compelling polemic The Light that Failed, “confidence that the political economy of the west was a model for the future of mankind had been linked to the belief that western elites knew what they were doing. Suddenly it was obvious that they didn’t.”skip past newsletter promotionafter newsletter promotionBack home in the US, meanwhile – as in the UK – the perception that banks had been bailed out, while the galaxy brains behind the crisis got off scot-free, sowed the seeds of a corrosive sense of injustice.Similarly, even before the crash, the idea that ever-expanding free trade brings economic benefits was bumping up against the fact that even if that is true in aggregate, for workers across the US rust belt, just as in the UK’s former manufacturing heartlands, it brought deindustrialisation and unemployment.This was fertile ground for Trump’s populist economic message. His first-term China tariffs were, with hindsight, a relatively modest stab at, as he saw it, tilting the playing field back towards the US.Joe Biden did not unwind those tariffs, which went with the grain of geopolitics, as any hopes that economic liberalisation would bring China into the fold of democracies were sadly dashed, and President Xi’s regime took on an increasingly authoritarian bent.Biden also took a muscular approach to the state’s role in the economy, with the billions in grants and loans distributed under the Inflation Reduction Act linked to national priorities of cutting carbon emissions and creating jobs.So the idea that before Trump arrived on the scene, free market US capitalism was motoring along unchallenged is misleading, but the pace at which he is crushing its remaining norms is extraordinary.There is ample ground for legitimate disagreement here: taxpayer stakes in strategic companies are much more common in European economies, for example. Trump may be laying down tracks that future US governments with different priorities could follow.Given that it is so unclear even what kind of economy he is groping towards, the overriding sense for the moment is of radical uncertainty. Friday’s weak US payrolls data, with the unemployment rate close to a four-year high, suggested companies may be responding with caution.Investors appear to have decided to avert their eyes for now, buoyed up by the prospect of Fed rate cuts, and the mega returns of the tech companies. However, with every chaotic week that passes, the risks must increase – and as the UK has learned in the wake of the Liz Truss debacle, economic credibility is quicker to lose than to rebuild. More

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      US justice department reportedly opens criminal inquiry into Fed governor Lisa Cook

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      The US justice department has initiated a criminal investigation into mortgage fraud claims against Federal Reserve governor Lisa Cook, according to new reports, as a lawsuit she filed against Donald Trump over her firing makes its way through court.Lawyers with the justice department have issued subpoenas for the investigation, according to the Wall Street Journal.Last month, Trump moved to fire Cook over unconfirmed claims that she listed two properties as her primary residence. Bill Pulte, the director of the Federal Housing and Finance Agency and a close ally of Trump, alleged Cook had lied on bank documents and records to obtain a better mortgage rate.Cook, a voting member of the Fed board that sets interest rates, said she has “no intention of being bullied to step down” and that she would “take any questions about my financial history seriously”.In response to Trump’s bid to dismiss her, Cook filed a lawsuit against the president arguing that her removal was unconstitutional and threatened the independence of the Fed. Cook’s lawyers say the firing was “unprecedented and illegal” and that federal law requires showing “cause” for a Fed governor’s removal.“An unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not [cause],” her lawyers said in court documents.In court documents, lawyers for Cook suggested that a “clerical error” may be behind the discrepancies found in her mortgage records.Cook was appointed by Joe Biden in 2022 for a 14-year term on the board that was set to end in 2038. She is the first Black woman to be appointed to the board.US district court judge Jia Cobb heard arguments for the lawsuit last week and said she will expedite the case, which is ultimately expected to be taken up by the US supreme court.Trump’s attacks against Cook come against the backdrop of a long fight the White House has waged against the Fed, which has historically been treated as nonpartisan.skip past newsletter promotionafter newsletter promotionEarlier in the year, Trump threatened to fire the Fed chair, Jerome Powell, for not lowering interest rates, but ultimately walked back his threats after negative responses from investors. Trump also tried to accuse Powell of fraud over renovations at the Fed’s headquarters, which have cost more than anticipated.Abbe Lowell, Cook’s lawyer, told the Journal that “it takes nothing for this DoJ to undertake a new politicized investigation”. The justice department did not immediately respond to the Guardian’s request for comment.This is the third mortgage fraud inquiry the justice department has launched against Democrats and Democratic-appointed officials. Experts have called the pattern a type of “lawfare” as Trump and his allies use their roles to take down other officials.Last month, the US attorney general, Pam Bondi, appointed a special attorney to investigate similar mortgage fraud allegations the White House has levied against California senator Adam Schiff and the New York attorney general, Letitia James. More