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      Lisa Cook urges supreme court to reject Trump’s bid to fire her from Fed board

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      Federal Reserve governor Lisa Cook urged the US supreme court on Thursday to reject Donald Trump’s attempt to fire her, telling the justices the Republican president’s unprecedented move would destroy the central bank’s independence and disrupt financial markets.Lawyers for Cook filed a written response opposing the justice department’s 18 September emergency request to lift a federal judge’s order that blocked Trump from immediately removing Cook, an appointee of Democratic former president Joe Biden, while her legal challenge continues.Granting Trump’s request, her lawyers told the supreme court, “would dramatically alter the status quo, ignore centuries of history and transform the Federal Reserve into a body subservient to the president’s will”.Washington-based US district judge Jia Cobb ruled on 9 September that Trump’s claims that Cook committed mortgage fraud before taking office – allegations that Cook denies – likely were not sufficient grounds for removal under the 1913 law that created the Fed.The US court of appeals for the District of Columbia circuit in a 2-1 ruling on 15 September denied the administration’s request to put Cobb’s order on hold, ruling that Cook likely was denied due process in violation of the US constitution’s fifth amendment.In Thursday’s filing, Cook’s lawyers said the Fed’s “unique history of independence” has helped make the US economy the strongest in the world. Siding with Trump, they wrote, “would signal to the financial markets that the Federal Reserve no longer enjoys its traditional independence, risking chaos and disruption”.Cook, the first Black woman to serve as a Fed governor, sued Trump in August after the president announced he would remove her. Cook has said the claims made by Trump against her did not give him the legal authority to remove her and were a pretext to fire her for her monetary policy stance.Earlier on Thursday, a group of 18 former US Federal Reserve officials, Treasury secretaries and other top economic officials who served under presidents from both parties urged the supreme court in a brief to reject Trump’s petition to allow his attempt to fire Cook.The group included the past three Fed chairs – Janet Yellen, Ben Bernanke and Alan Greenspan – as well as former Treasury secretaries Henry Paulson, Lawrence Summers, Jacob Lew, Timothy Geithner and Robert Rubin. They argued that letting the president remove Cook while her legal challenge to Trump’s action is ongoing would threaten the central bank’s independence and erode public confidence in it.In its filing to the court last week, the justice department wrote: “This application involves yet another case of improper judicial interference with the President’s removal authority – here, interference with the President’s authority to remove members of the Federal Reserve Board of Governors for cause.”Congress included provisions in the law that created the Fed to shield the central bank from political interference. Under that law, Fed governors may be removed by a president only “for cause”, though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court.Trump has pursued a broad vision of presidential power since returning to office in January.The Cook legal battle has ramifications for the Fed’s ability to set interest rates without regard to the wishes of politicians, widely seen as critical to any central bank’s ability to function independently to carry out tasks such as keeping inflation under control.Trump this year has demanded that the Fed cut rates aggressively, berating Fed chair Jerome Powell for his stewardship over monetary policy as the central bank focused on fighting inflation. Trump has called Powell a “numbskull”, “incompetent” and a “stubborn moron.“Trump on 25 August said he was removing Cook from the Fed’s board of governors, citing the allegations that, before joining the central bank in 2022, she falsified records to obtain favorable terms on a mortgage. In blocking Cook’s removal, the judge found that the 1913 law only allows a Fed governor to be removed for misconduct while in office. The mortgage fraud claims against Cook relate to actions prior to her Senate confirmation in 2022. More

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      Trump wants to rebrand his tax bill as the ‘Working Families Tax Cut’. Don’t be fooled | Steven Greenhouse

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      Just a few months ago, Donald Trump sought to bamboozle the American people into believing that his One Big Beautiful Bill Act – with its trillions in tax cuts for the rich – was a legislative wonder stuffed with one marvel after another. But a Pew opinion poll in August found that millions of Americans have wised up about the measure and now view it as a big, unbeautiful monstrosity.Many Americans have come to realize that Trump’s not-so-beautiful bill – instead of being filled with good things that benefit average Americans – is overflowing with big tax cuts for the wealthy as well as many unfortunate things that will hurt typical working families. As we saw in the town halls held across the US, many Americans are furious about some painful things that Trump and congressional Republicans inserted into the bill: cuts that will make health insurance more expensive, cuts that reduce food assistance, cuts that make it harder for students from working families to afford college. All this is bad news for working families who struggle to make ends meet.President Trump and his administration can’t hide from the fact that many Americans detest the bill — 46% disapprove of it, while just 32% approve (23% say they’re unsure what they think). What’s more, 33% of Americans “strongly disapprove” of the bill.Alarmed that the bill has become a public relations and political disaster, Trump and his allies have embraced a curious strategy to address that problem. Their strategy is not what you might hope – they’re not seeking to amend the bill to make it less painful for average Americans. Rather, their strategy is slick marketing: to simply rebrand the bill, to make it sound better. The White House is telling Republicans to stop calling it the One Big Beautiful Bill and instead call it the nice-sounding Working Families Tax Cut Bill.Unfortunately, that name is another effort to dupe America’s working families. The bill gives 45% of next year’s tax cuts to the highest-earning 5% of US households, while just 1% of the tax cuts go the lowest-earning 20% of households. Under the bill, far more in net tax cuts, $117bn, will go to the wealthiest 1% of households next year than will go to the bottom 60% ($77bn).If the White House and GOP lawmakers want to be accurate, they should call the bill the Billionaires’ and Millionaires’ Tax Cut Act. The bill gives a $13,622 tax cut to households in the top 10% by income, according to the non-partisan Congressional Budget Office (CBO). The top 0.1% of households (those with income of more than $3.3m a year) will receive annual tax cuts of $103,500 on average, according to the Yale Budget Lab.If you’re wealthy enough to have $15m in assets, the bill is very good for you. Under the bill, the first $15m in an individual’s assets are exempt from the estate tax, nearly triple the $5.5m in pre-Trump days. For couples, the first $30m in assets will be exempt. Does anyone think that these sound like working family tax cuts?Frankly, it would be more accurate to call the bill the Working Families Benefits Cut Bill. Containing a painful $1.4tn in Medicaid and other cuts that Republicans insisted on to help finance their tax cuts for the rich, the bill is filled with benefit cuts that hurt working families. Roughly 15 million Americans will lose health coverage and become uninsured because the bill cuts Medicaid funding and reduces subsidies for Obamacare.Other results of the bill: 4 million people will lose some or all of their food aid, while 4.4 million students from working families might lose all or some of their federal aid to go to college.“Who’s getting hit, who’s bearing the cost? It’s people with low and middle incomes, people that the president and many Republican policymakers promised to serve and support in the last election,” said Sharon Parrott, president of the Center on Budget and Policy Priorities.President Trump is correct that the bill contains some tax cuts for working Americans – for instance, it increases the standard income tax deduction by $750 for individuals and $1,500 for couples. The bad news is that for tens of millions of families, the bill’s benefit cuts, especially on health coverage, outweigh the meager tax cuts that the bill gives non-affluent Americans. In many ways, Trump and GOP lawmakers are making this a shell game – they say you’re benefiting from tax cuts, but the fact is that because of the benefit cuts, millions of working families will end up worse off.According to the CBO, Americans in the bottom 10% by income (averaging $23,751) will end up $1,214 worse off on average per year, while the next lowest 10% (averaging $43,092) will end up $392 worse off per year. Those in the third-lowest tenth ($54,453) will receive a mere $23 annual gain. Those in the fourth-lowest decile ($67,637) will see a very modest net gain of $379. Cutting through all these numbers, this shows that for tens of millions of families, the bill is a net loser or a wash.“This really is a big, beautiful bill for billionaires, but for the poor and the working class in this country, you are actually poorer,” said the representative Brendan Boyle, the top Democrat on the House budget committee.skip past newsletter promotionafter newsletter promotionFor those solidly in the middle class, the bill provides modest gains. Middle-class families earning between $86,000 and $108,000 would receive between $800 and $1,200, around 1% of income, the CBO says.Since we’re discussing taxes, we shouldn’t forget Trump’s massive tariffs – they are unarguably a tax, a sales tax on imports that will hit working-class Americans hardest. The reason: the non-wealthy spend a higher share of their income on imports, whether on furniture, electronics or coffee, than the wealthy do. The Yale Budget Lab found that when one combines the effects of Trump’s tariffs and the One Big Beautiful Bill Act, 90% of American families will end up worse off. Seventy per cent of households will face losses ranging from $780 to $2,570 each year.President Trump boasts that two provisions he championed – no tax on tips and no tax on overtime – will be great for working Americans. But those provisions will be far less helpful than people realize. Just 3% of US workers receive tips, and one-third of them earn so little that they don’t pay federal income taxes. So no tax on tips won’t help them.No tax on overtime won’t help workers nearly as much as many think. The deduction applies only to the “half” in “time and a half” overtime pay. So if a worker earns $20 an hour and receives $30 per overtime hour, that worker can deduct only the $10 premium per overtime hour, not the full $30. John Ricco, an analyst at the Yale Budget Lab, says that for the bottom 40% of Americans by income, no tax on overtime will mean “less than a $10 tax cut per year” – “essentially a rounding error”.By seeking to call this bill the Working Families Tax Cut Bill, Trump and the GOP are again seeking to hold themselves out as the best friends of American workers, even though Trump, since returning to office, has taken dozens of anti-worker actions. He halted enforcement of a regulation that protects miners from a debilitating, often fatal lung disease. He has stripped 1 million federal employees of their important right to bargain collectively and has torn up union contracts for hundreds of thousands. He fired the chair of the National Labor Relations Board, leaving the nation’s top labor watchdog without a quorum to protect workers from companies’ unlawful anti-union actions. Trump is also pushing to end minimum wage and overtime protections for 3.7 million home-care and domestic workers.People who care about working families – whether union leaders, clergy or community leaders – need to make clear to the public that the One Big Beautiful Bill Act hurts many working Americans. It is a bait and switch, telling working families that it’s good for them even as it cuts benefits for millions of working Americans while lavishing big tax cuts on the wealthiest Americans.

      Steven Greenhouse is a journalist and author, focusing on labour and the workplace, as well as economic and legal issues 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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      Trump’s take on a court decision on tariffs is bonkers – even for him | Steven Greenhouse

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      Just hours after an appeals court ruled that it was illegal for Donald Trump to impose his unpopular across-the-board tariffs on dozens of countries, he posted a frantic, over-the-top rant that declared: “If allowed to stand, this Decision would literally destroy the United States of America.”So here the president of the United States was asserting that if the courts torpedoed his tariffs, then the US, the most powerful nation on earth, would be destroyed, would “literally” be kaput. Trump seemed to suggest that court rulings that blocked his beloved tariffs would have the destructive power of, say, 100 hydrogen bombs.Call me naive, but I never cease to be amazed when Trump says such egregiously false and ludicrous things. OK, I sometimes forget that he’s the guy who said that noise from wind turbines causes cancer. After narrowly winning the presidency a second time notwithstanding the 30,573 Trump lies, falsehoods and misleading claims in his first term, Trump evidently thinks he can say anything, no matter how false or foolish, and get away with it. As part of his tariff fight, Trump also blurted this absurdity: if the courts don’t uphold his tariffs, “we would become a Third World Nation.”Trump’s statement that ending tariffs will destroy the US is totally bonkers because the US became the world’s richest nation and has largely prospered for nearly 250 years (despite occasional slumps) before Trump imposed his “Liberation Day” tariffs in April. In the months before then, the US had solid GDP growth, low unemployment and declining inflation – the Economist magazine even called the US economy “the envy of the world”. But now Trump says that if the courts give a thumbs down to his favorite plaything – I mean weapon – to bang other countries over the head with, it would end the US. Even Ramesh Ponnuru, editor of the conservative National Review, called that “lunatic stuff”.The truth is that if the courts block Trump’s across-the-board tariffs, that would be good news for the US economy. It would prevent Trump’s tariffs from further pushing up inflation and slowing economic growth. By giving a thumbs down to Trump’s tariffs, the courts might be doing him a huge economic and political favor because his tariffs, and the inflation they are fueling, have been dragging his dismal approval ratings even lower.On 29 August, the US court of appeals for the federal circuit in Washington DC ruled that Trump overstepped his authority when he invoked the International Emergency Economic Powers Act to impose his Liberation Day tariffs. The court said that act doesn’t give presidents the authority to slap sweeping tariffs on other countries. Trump has appealed the ruling to the supreme court, which might rule on the tariffs this fall.The court of appeals repeatedly noted that the constitution gives Congress, not presidents, the power to impose tariffs. It further noted that the Emergency Act doesn’t mention the word “tariffs” even once among the tools the act authorizes presidents to use to deal with emergency trade problems. (That appellate ruling overturned the bulk of Trump’s tariffs: the blanket 10% to 50% tariffs on exports from more than 70 countries. The court didn’t rule on Trump’s product-specific tariffs on steel, aluminum and auto parts.)As part of his conniptions over the appeals court ruling, Trump also warned of fiscal disaster, complaining that the US would lose hundreds of billions of dollars if his tariffs were halted. But Trump conveniently forgets that it’s embattled US consumers who will be paying most of those hundreds of billions as they pay Trump’s tariffs, essentially import taxes on furniture, cars, coffee, electronics and other foreign goods.In using his hysterical language, Trump evidently had one audience in mind: the supreme court’s six conservative justices who have repeatedly ruled his way. Trump’s goal is evidently to scare the bejesus out of those justices – he hopes that by shrieking “You’ll Destroy the Country If You Rule Against Me,” that will persuade them to overturn the appellate court’s decision and uphold his tariffs. (The appellate court let the tariffs remain in force to allow time for appeal.)So far in his second term, Trump has a remarkable batting average with the supreme court’s six rightwing justices, who seem astonishingly subservient and supine vis-a-vis the most authoritarian, power-grabbing president in US history. The justices have used their emergency docket to grant Trump administration requests 18 times in a row, often vacating injunctions that lower courts put in place to stop what they saw as Trump’s rampant lawlessness. In repeatedly siding with Trump, the supreme court has scrapped lower court injunctions in several highly controversial cases, provisionally letting Trump fire the chair of the National Labor Relations Board, gut the federal Department of Education, and give Doge – with its staff of twentysomethings – access to the highly private social security information of hundreds of millions of Americans.Trump is no doubt worried that the supreme court, though submissive so far, will overturn his tariffs. Many conservative and libertarian scholars and lawyers oppose his tariffs as both harmful and illegal. Not only do they dislike the tariffs for pushing up inflation and disrupting global supply chains, but they see Trump’s tariffs as anti-free market and mucking up the US and world economies.When Trump announced his Liberation Day tariffs, he invoked a national emergency, saying the US trade deficit and other countries’ tariffs were urgent problems undermining the US economy. Admittedly the trade deficit and other countries’ tariffs are a problem, but in no way do they constitute a national emergency, especially since the US economy was seen as “the envy of the world” before Trump went hog wild with his tariffs. (There’s no denying that the flood of imports from China and other low-wage nations badly damaged many communities in America’s industrial heartland two and three decades ago.) Wouldn’t it be great if, in this tariff litigation, the supreme court stood up to Trump and issued a candid ruling that told him: “Sorry, Mr President, your supposed national emergency is hogwash, a pretext for you to pursue your destructive tariff obsession”?The supreme court’s justices shouldn’t let themselves be cowed, bullied or fooled by Trump’s talk that the nation will be destroyed if they nix his tariffs. Trump is like the boy who cried wolf, forever crying catastrophe if he doesn’t get his way. It’s time for the court and the nation to wise up to Trump’s lies, hype and shenanigans.Virtually every non-Trumpian economist agrees that Trump’s tariffs have hurt the US by increasing inflation, undermining GDP growth, creating huge headaches for corporations and seriously damaging the US’s relations with other nations. The justices shouldn’t buy Trump’s calamitous warnings that if they overturn his tariffs, the world will end.If the justices declare his tariffs illegal, it certainly won’t be a “disaster” for the US, as Trump has claimed. But it might be a disaster for Trump’s ego and for his dangerous dream of having an authoritarian presidency wholly unchecked by the other branches of government.If the supreme court rules against Trump’s tariffs, let’s hope that will serve as a much-needed first step to the court’s developing the backbone to rule many times more against Trump’s authoritarian and lawless actions.

      Steven Greenhouse is a journalist and author, focusing on labour and the workplace, as well as economic and legal issues 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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      US treasury secretary reportedly made similar mortgage pledge to Lisa Cook

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      Scott Bessent, the US treasury secretary, previously agreed to occupy two different houses at the same time as his “principal residence”, Bloomberg News reported on Wednesday, an agreement similar to one Donald Trump has called mortgage fraud in his unprecedented bid to fire the Federal Reserve governor Lisa Cook.The Bloomberg report cites Bessent’s mortgages with lender Bank of America and his pledge in 2007 to primarily occupy homes in New York and Massachusetts.Mortgage experts told Bloomberg there was no sign of wrongdoing or proof of fraud in Bessent’s home-loan filings and said the issue highlights incongruities found in such documents.Bank of America did not rely on Bessent’s pledges and never expected him to occupy both homes as his primary residences, Bloomberg reported, citing the mortgage documents.“Nearly 20 years ago, Mr Bessent’s lawyers filled out paperwork properly, the bank has confirmed it was done properly, and this nonsensical article reaches the conclusion that this was all done properly,” Bessent’s lawyer Alex Spiro said in a statement.The Republican president, who appointed Bessent to the Treasury post, and members of his administration have accused Cook, an appointee of the Democratic former president Joe Biden, of committing mortgage fraud before taking office, a claim Cook denies.Congress included provisions in the 1913 law that created the Fed to shield the central bank from political interference. Under that law, Fed governors may be removed by a president only “for cause”, though the law does not define the term nor establish procedures for removal. No president has ever removed a Fed governor, and the law has never been tested in court. Trump has sought to remove her for cause, citing the alleged fraud.A US appeals court on Monday declined to allow Trump to fire her. The White House has said it will appeal the decision to the US supreme court. Trump’s justice department also has launched a criminal mortgage fraud inquiry into Cook, issuing grand jury subpoenas in Georgia and Michigan, Reuters previously reported.A loan estimate for an Atlanta home purchased by Cook showed that she had declared the property as a “vacation home”, according to a document reviewed by Reuters. The property tax authority in Ann Arbor, Michigan, also said Cook had not broken rules for tax breaks on a home there that had been declared her primary residence.Bloomberg in its report on Wednesday pointed to similar but not identical pledges made by an attorney on Bessent’s behalf on 20 September 2007, agreeing to make a Bedford Hills, New York, house his “principal residence” over the next year as well as another house in Provincetown, Massachusetts.“There are people who think that President Trump is putting undue pressure on the Fed. And there are people like President Trump and myself who think that if a Fed official committed mortgage fraud, that this should be examined, and that they shouldn’t be serving as one of the nation’s leading financial regulators,” Bessent told Fox Business Network in an interview on 27 August. More

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      Lisa Cook to remain at Federal Reserve while fighting Trump’s attempt to fire her, judge rules

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      A federal judge has ruled that Federal Reserve board member Lisa Cook can stay in her post while suing Donald Trump over his unprecedented bid to fire her.Cook is legally challenging the US president after he sought to remove her, citing unconfirmed allegations of mortgage fraud, amid an extraordinary campaign by his administration to strengthen its control over the US central bank.She asked US district judge Jia Cobb to impose a temporary restraining order against Trump’s attempt to “immediately” dismiss her, pending further litigation. The administration has argued that Trump is able to fire Fed governors “for cause” and appoint replacements.Trump has spent months attacking the Fed, where most policymakers – including Cook – have so far defied his calls for interest rate cuts. He has spoken of rapidly building “a majority” on the central bank’s board, calling into question the future of its longstanding independence from political oversight.Trump moved to fire Cook after one of his allies, Bill Pulte, whom he tapped to lead the US Federal Housing Finance Agency, alleged she had claimed two different properties as primary residences when obtaining mortgages in 2021.“How can this woman be in charge of interest rates if she is allegedly lying to help her own interest rates?” Pulte wrote on X. He referred the case to the Department of Justice for investigation.After Cook declined to resign, Trump tried to remove her from the Fed’s board. The justice department is now looking into the allegations of mortgage fraud.In a court filing, Cook’s attorneys insisted she “did not ever commit mortgage fraud” as they outlined their case.Multiple federal agencies were provided details of Cook’s mortgage arrangements when she was first nominated, by Joe Biden, to join the Fed’s board in 2022, according to her representatives. “The Government has long known about the alleged facial inconsistencies in Governor Cook’s financial documents,” the filing said.On one background check form, for example, Cook said that she had listed one property in Michigan as a primary residence and another in Georgia as a second home.On a separate questionnaire, she listed both homes as her “present” residence; the Michigan property as her “current permanent residence”; and a third property, in Massachusetts, as both a present residence, but also a second home and rental property, she said. More