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Miran

Trump Fed Nominee Stephen Miran Faces Senate Hearing: Independence of Central Bank in Question

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President Donald Trump’s effort to reshape the Federal Reserve takes center stage this Thursday as the Senate Banking Committee prepares to hear the nomination of Stephen Miran, one of the president’s top economic advisers, for a vacant seat on the Fed’s Board of Governors. The outcome could significantly influence the direction of the U.S. economy and raise questions about the future independence of the world’s most powerful central bank.

STORY HIGHLIGHTS

  • Trump Fed nominee Stephen Miran faces Senate Banking Committee hearing Thursday.

  • Miran previously challenged Fed independence in research and co-authored reports advocating increased presidential influence.

  • Fed expected to cut interest rates mid-September, adding urgency to leadership questions.

  • Lisa Cook, recently fired Fed governor, challenges Trump’s removal in federal court.

  • Confirmation of Miran could pave the way for potential Fed chairmanship.

Less than a mile from Capitol Hill, the fate of another Fed official hangs in the balance. Lisa Cook, recently fired by Trump over alleged mortgage fraud, is challenging her removal in court. A federal judge is reviewing new filings and could issue a ruling as early as Thursday on whether Cook can remain a Fed governor while her lawsuit proceeds.

Since the start of 2025, the Trump administration has repeatedly criticized the Federal Reserve for not cutting interest rates on command. Central bankers have held firm, opting to monitor the economy’s response to Trump’s sweeping policies. Still, the Fed is reportedly preparing for a rate cut in mid-September, reflecting the ongoing tension between policymakers and the White House.

Miran’s Position and Views

Stephen Miran has repeatedly emphasized his commitment to preserving Fed independence. In his prepared testimony for the Senate hearing, he stated:

“The Fed’s rate-setting committee is an independent group with a monumental task, and I intend to preserve that independence and serve the American people to the best of my ability.”

He reiterated similar views in media interviews following his nomination, insisting that the central bank must operate free of political pressure.

However, Miran’s past work raises questions about the depth of that independence. Last year, he co-authored a report with the Manhattan Institute arguing that Fed independence is an outdated “shibboleth.” The report recommended shorter terms for Fed governors to increase presidential influence over the central bank.

“Central bank independence has long been considered an essential element for successful monetary policy,” the report said.
“But central banks are creations of political exigency, and pure independence exists only in textbooks. It can also bestow power without accountability.”

Miran is also known as a key architect of Trump’s aggressive trade policies. A November 2024 paper by Miran detailed how a tariff-focused approach, designed to weaken the dollar, could reshape the global trading system in favor of the United States.

Democrats Raise Concerns

Lawmakers, particularly Democrats, are expected to scrutinize Miran’s record. Senate Banking Committee ranking member Elizabeth Warren said in prepared remarks:

“Every claim he makes and every vote he takes will be tainted with the suspicion that he isn’t an honest broker, but that he is Donald Trump’s puppet.”

Some Republicans are also expected to challenge Miran’s views on the Fed’s independence. Senators will likely question whether his past advocacy for increased presidential influence over the Fed is compatible with the role of a governor tasked with making unbiased economic decisions.

Potential for Fed Chairmanship

Miran’s nomination could extend beyond a standard governor position. Trump has suggested that Miran might serve a longer term and potentially ascend to Fed chair. Trump said at a Cabinet meeting on August 26:

“We might switch him to the other, it’s a longer term, and pick somebody else. We’ll have a majority very shortly. So that’ll be great. Once we have a majority, housing is going to swing, and it’s going to be great.”

Fed rules allow the chair to be selected only from current governors. Fed Chair Jerome Powell’s term ends in May 2026, but he could remain on the board through 2028. This opens the possibility of Miran eventually taking the top Fed position, following a path similar to former chairs Janet Yellen and Ben Bernanke.

Lisa Cook’s Legal Challenge

While Miran’s confirmation is being considered, Lisa Cook’s lawsuit adds complexity to the Fed’s landscape. Cook claims her firing violated due process, whereas the Trump administration cites alleged mortgage fraud as justification. An upcoming court decision is likely to have major implications, particularly as the Fed plans a policy meeting on September 16-17, when a rate cut is widely expected.

Democrats have requested that Miran’s hearing be postponed until Cook’s case is resolved, highlighting the uncertainty surrounding the central bank’s leadership and the potential political influence over its policy decisions.

As the Senate Banking Committee prepares to weigh Stephen Miran’s nomination, the future of the Federal Reserve’s independence and the direction of U.S. economic policy remain uncertain. Miran’s confirmation could mark a significant shift in how the central bank operates, while Lisa Cook’s legal challenge underscores the high-stakes political and legal battles shaping the Fed. With interest rate decisions looming, all eyes are on Washington, where the outcome may reshape the balance between politics and monetary policy for years to come.

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Wall Street Pulls Back as Inflation Tops Fed Target; Nasdaq Leads Slide

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U.S. stocks pulled back from record highs on Friday after fresh economic data signaled that inflation remains stubbornly above the Federal Reserve’s 2% target. The update left investors digesting the implications for interest rates ahead of the central bank’s September meeting.

The Dow Jones Industrial Average (^DJI) closed down roughly 0.5%, while the S&P 500 (^GSPC) lost 0.8%. Leading the retreat, the Nasdaq Composite (^IXIC) slipped over 1%, weighed down by a sell-off in major technology names.

Big Tech bore the brunt of Friday’s decline. Nvidia (NVDA) shares dropped more than 3%, coming just days after the chipmaker unveiled its much-anticipated earnings report.

STORY HIGHLIGHTS

  • Dow Jones dropped 0.5%, S&P 500 fell 0.8%, Nasdaq tumbled over 1%.

  • Nvidia stock sank 3% despite strong earnings earlier this week.

  • Core PCE inflation rose 0.3% monthly and 2.9% annually, above Fed’s 2% target.

  • Consumer confidence slid to a three-month low, inflation expectations jumped.

  • Traders still price in 87% chance of Fed rate cut in September.

  • Nasdaq eyes five-month winning streak despite Friday’s losses.

  • Markets closed Monday for Labor Day holiday.

Inflation Data Signals Persistent Pressure

The core Personal Consumption Expenditures (PCE) index, a key metric the Federal Reserve closely monitors, rose 0.3% on a monthly basis and 2.9% annually in July. Both figures were in line with analyst expectations but still well above the Fed’s 2% inflation target.

“The annual increase marks the largest since February,” said an analyst at a leading Wall Street firm. “It reinforces the idea that inflation is sticky, even if it’s not accelerating at a rapid pace.”

Adding to concerns, a University of Michigan survey showed that consumer sentiment dropped to a three-month low, with respondents expecting inflation to pick up over the next year.

Traders Keep Bets on Rate Cuts Despite Hot Data

Despite the hotter-than-desired inflation reading, Wall Street hasn’t shifted dramatically in its expectations for the Federal Reserve’s next move. Market data on Friday indicated that traders still assign an 87% probability to a quarter-point rate cut at the September meeting.

“This PCE report was widely anticipated, and the numbers came in exactly as expected,” noted one market strategist. “For now, the market narrative remains focused on an easing cycle, not a reversal.”

Tech Sector Drags Nasdaq Lower

Technology stocks, which have been leading the market higher in recent months, saw sharp declines Friday. Nvidia (NVDA), a key driver of this year’s tech rally, dropped more than 3%, erasing some of the gains it made after its blockbuster earnings release earlier in the week.

“The profit-taking in Big Tech isn’t surprising after such a strong run,” an equity analyst explained. “Nvidia has been at the center of the AI trade, so even a slight shift in sentiment can lead to big moves.”

Indexes Still on Track for Longest Winning Streak in Months

Despite Friday’s setback, the broader picture for U.S. markets remains upbeat. The Nasdaq Composite is still up about 2% in August, on course for its fifth consecutive monthly gain, the longest winning streak in nearly 18 months.

Similarly, the S&P 500 and the Dow Jones Industrial Average are both headed for their fourth straight month of gains, rising about 1.6% and 2%, respectively — the longest streak since September 2024.

Meanwhile, the Russell 2000 (^RUT), which tracks smaller companies, is set to jump 6% this month, marking its best four-month performance in over four years.

Political Drama Adds to Busy Week

This week wasn’t just about inflation data and earnings. Markets were also watching political headlines after President Trump intensified efforts to remove Fed Governor Lisa Cook. On Friday, a judge was expected to rule on Cook’s request for a temporary restraining order, adding another layer of uncertainty to an already eventful week for investors.

Markets will remain closed on Monday for the Labor Day holiday, reopening Tuesday for what could be another critical week for Wall Street.

Friday’s market pullback highlighted the delicate balance between investor optimism and economic reality. While inflation remains above the Federal Reserve’s target, traders are still betting on a rate cut in September, signaling confidence that policy easing is on the horizon. Despite the day’s losses, the Nasdaq, S&P 500, and Dow Jones remain on track for multi-month winning streaks, underscoring the resilience of U.S. equities. With markets closed for Labor Day, investors will look to next week for fresh cues on whether the Fed will prioritize inflation control or growth momentum in the months ahead.

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Mortgage Rates Hold Steady as Fed Signals Possible Rate Cut

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Mortgage rates remained unchanged this week after a significant drop to a 10-month low, as markets anticipate an imminent Federal Reserve interest rate cut.

The average 30-year fixed mortgage rate stayed at 6.58% for the week ending Aug. 21, matching the previous week, according to Freddie Mac. A year ago, rates averaged 6.46%.

“Over the summer, rates have come down and purchase applications are outpacing 2024,” said Sam Khater, chief economist at Freddie Mac. “However, many buyers remain on the sidelines waiting for further decreases.”

The stability in mortgage rates follows Fed Chair Jerome Powell’s comments at Jackson Hole, signaling a possible rate cut in September. Powell noted that risks are shifting away from inflation toward rising layoffs.

STORY HIGHLIGHTS

  • 30-year fixed mortgage rate: 6.58% (unchanged from last week)

  • Possible Fed rate cut: Expected at Sept. 17 FOMC meeting

  • Market sentiment: Futures traders assign 85% probability to a quarter-point cut

  • Trump criticism: President Trump blasts Powell over high rates

  • Housing market outlook: Lower rates could boost fall home sales

  • Key factor: Fed does not set mortgage rates directly

Powell Signals Policy Shift

Powell indicated that the “balance of risks” could justify policy changes, saying:
“Risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation. Nonetheless, the shifting balance may warrant adjusting our stance.”

Markets are betting heavily on a quarter-point cut at the Sept. 17 FOMC meeting. Futures traders now see an 85% chance of a reduction.

Trump Turns Up the Pressure

President Donald Trump has repeatedly criticized Powell for not cutting rates, claiming the Fed’s stance is hurting the housing sector.
“People can’t get a mortgage because of him,” Trump posted. “There is no inflation, and every sign points to a major rate cut. ‘Too Late’ is a disaster!”

Since December 2024, the Fed has kept its benchmark rate between 4.25% and 4.5%, despite political pressure.

Impact on Housing Market

Mortgage rates near 10-month lows could lift buyer confidence heading into fall.
“It’s been a cruel summer for buyers, sellers, and builders,” said Jake Krimmel, senior economist at Realtor.com. “But a mix of lower rates and easing uncertainty could jumpstart the market.”

However, a Fed cut won’t guarantee immediate relief. Mortgage rates are influenced by factors such as 10-year Treasury yields, inflation expectations, and overall market trends.

How Mortgage Rates Are Determined

Rates hinge on Treasury bond yields, which move with economic growth and inflation signals. When inflation rises, yields and mortgage rates climb. When inflation cools or labor markets weaken, rates tend to fall.

Lenders also weigh personal financial factors:

  • Credit score

  • Loan amount and type

  • Down payment size

  • Loan term

Borrowers with stronger profiles usually secure lower rates, while higher-risk borrowers pay more.

Mortgage rates holding steady at 6.58% signals a pivotal moment for the housing market. With the Federal Reserve’s potential rate cut in September, buyers could soon see improved affordability and renewed market activity. Still, the Fed does not directly set mortgage rates, and multiple economic factors—including Treasury yields, inflation expectations, and borrower profiles—will determine how quickly relief reaches homebuyers. For now, all eyes remain on the Sept. 17 FOMC meeting for the next move.

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Trump Demands Lisa Cook Resign as Mortgage Fraud Allegations Shake the Fed

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Former President Donald Trump on Wednesday openly demanded that Federal Reserve Governor Lisa Cook resign following explosive allegations of mortgage fraud. The call came after Bill Pulte, director of the Federal Housing Finance Agency (FHFA), formally urged the Department of Justice (DOJ) to investigate Cook’s real estate dealings.

The situation marks the latest clash between Trump and the Federal Reserve, with growing pressure on Fed leadership as interest rate decisions remain a central political battleground.

📌 Story Highlights

  • Trump demands Lisa Cook resign over mortgage fraud allegations

  • FHFA chief Bill Pulte sends letter to DOJ seeking criminal probe

  • Accusations involve properties in Michigan and Georgia

  • Cook, a Biden appointee, voted to hold interest rates steady

  • Trump increases pressure campaign on Fed Chairman Jerome Powell

Trump’s Direct Demand

In a fiery post on Truth Social, Trump declared:

“Cook must resign, now!!!”

The message linked to a Bloomberg report detailing Pulte’s allegations. Trump’s blunt demand underscores his ongoing push against the Federal Reserve and his criticism of officials appointed during the Biden administration.

Pulte Levels Fraud Allegations

Bill Pulte, who has emerged as one of Trump’s strongest allies in attacking the Fed, laid out his accusations in both a formal letter and on social media. He claimed that mortgage records reviewed by the FHFA raise serious questions about Cook’s property transactions.

According to Pulte’s letter, Cook allegedly falsified residence statuses for homes in Ann Arbor, Michigan, and Atlanta, Georgia, in order to secure more favorable loan terms. He further alleged that bank documents and property records may have been altered, actions he described as “potential mortgage fraud.”

Social Media Attacks

On Wednesday morning, Pulte intensified his criticism in a series of posts targeting both Cook and Fed Chairman Jerome Powell.

“Lisa Cooked is cooked,” he wrote in one post, before later adding that Trump “has cause to fire” her.

Turning his attention to Powell, Pulte quipped:
“I hear Jay Powell is scrambling this morning. He can scramble all he wants, but he might as well be scrambling eggs, because the party at the Fed is OVER!”

In another post, he insisted: “Powell must look into it or he is complicit.”

A Biden Appointee Under Fire

Lisa Cook, who was nominated to the Federal Reserve Board by President Joe Biden in 2022, has been part of key monetary policy decisions during a period of high inflation and political scrutiny of the Fed. At the central bank’s most recent Federal Open Market Committee (FOMC) meeting, Cook joined the majority in voting to keep interest rates unchanged.

This decision was at odds with Trump’s repeated calls for aggressive rate cuts, a point of tension that has fueled his broader campaign against Fed leadership.

Broader DOJ Investigations

The Justice Department has so far declined to comment on the matter, as has the Federal Reserve. However, the allegations come at a time when the DOJ is already investigating other prominent figures aligned against Trump, including Sen. Adam Schiff (D-Calif.) and New York Attorney General Letitia James, over similar mortgage-related claims.

Observers note that the case against Cook may represent a widening of Trump’s strategy to cast doubt on political and institutional opponents through accusations of financial misconduct.

A Developing Story

The allegations against Lisa Cook, the demand by Trump for her resignation, and the pressure on Jerome Powell highlight a broader struggle over the future of U.S. monetary policy. As investigations continue, the spotlight remains on the Federal Reserve and the question of whether Cook will remain in her role amid growing controversy.

This is a developing story and updates are expected as the Department of Justice reviews the claims.

The demand that Trump made for Lisa Cook to resign adds fresh turbulence to an already tense relationship between political leaders and the Federal Reserve. With the Department of Justice facing calls to investigate and both the Fed and DOJ declining comment, uncertainty now surrounds Cook’s future at the central bank.

Whether the allegations of mortgage fraud will lead to formal charges or remain part of a larger political fight, the case underscores how financial oversight and partisan battles are increasingly intertwined. For now, Lisa Cook remains in her role, but Trump’s push for her resignation ensures that pressure on the Federal Reserve will only intensify in the weeks ahead.

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Stock Market Shaken by Weak Jobs Data and Trump’s Tariff Shock

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Stocks witnessed a dramatic tumble as August began, with Wall Street shaken by weaker-than-expected U.S. jobs data and a sudden rise in tariff rates announced by President Donald Trump. The stock market fell sharply, signaling renewed fears of a slowing economy. The Dow plunged over 500 points, while the Nasdaq and S&P 500 followed suit. Fresh tariffs on Canadian and transshipped goods, paired with poor payroll growth, cast a dark shadow over investor sentiment. Hopes of a Federal Reserve rate cut now appear too late to rescue the sinking confidence.

📰 STORY HIGHLIGHTS READ BOX:

  • Dow plunges 502 points; Nasdaq down 2.1% as economic jitters mount

  • July jobs rise only 73,000 vs. 100,000 forecast; prior months revised sharply down

  • Big banks slide: JPMorgan, BofA, Wells Fargo each fall over 3%

  • Fed rate cut odds surge to 66% as market bets on urgent policy response

  • Trump ramps up tariffs: Canadian imports now face 35% levy

  • Amazon falls 7% on weak forecast; Apple bucks trend with 2% jump

  • 25 S&P 500 stocks hit 52-week lows, many to early-pandemic levels

  • Only 7 reach new highs, including Northrop Grumman and CBOE

U.S. markets began the new month on shaky ground, as investors confronted a potent mix of disappointing employment data and intensified tariff pressures. The fragile optimism that had propped up equities in recent weeks gave way to widespread selloffs, rattling sectors from banking to tech.

The Dow Jones Industrial Average tumbled by 502 points, or 1.4%, as investors digested mounting evidence of an economic slowdown. The broader S&P 500 fell 1.6%, while the Nasdaq Composite suffered the steepest loss, dipping 2.1%, weighed down by dismal corporate guidance and a sudden shift in market sentiment.

At the heart of the downturn was July’s jobs report—a data point often viewed as a litmus test for the broader economy. Instead of the anticipated 100,000 gain in nonfarm payrolls, the economy managed to add only 73,000 jobs last month, according to the Labor Department. Worse yet, revisions to prior months painted an even grimmer picture: June’s figures were slashed to a mere 14,000 from 147,000, and May’s count was revised downward to just 19,000 from the previously reported 125,000.

This disheartening trend suggested not just a one-off miss, but a more entrenched softening in labor market momentum.

The market’s reaction was swift. Banking stocks, traditionally seen as bellwethers for economic health, took a heavy blow. JPMorgan Chase retreated by roughly 4%, while Bank of America and Wells Fargo both shed more than 3%. Investors grew wary of how a slower economy might crimp loan demand and squeeze financial margins.

Industrial giants weren’t spared either. Shares of GE Aerospace and Caterpillar slipped 3%, reflecting fears that demand for machinery and transport services may falter amid growing economic headwinds.

“The numbers gave the Fed the ammunition it needs now to cut in September,” said Jay Woods, Chief Global Strategist at Freedom Capital Markets.
“But unfortunately, now it looks too little too late.”

That sentiment echoed across trading floors. Just days ago, Federal Reserve Chair Jerome Powell had hinted at a more cautious approach, suggesting the central bank wanted to assess the impact of tariffs on inflation before making a move. But with labor figures faltering, market expectations pivoted quickly. Traders now place a 66% chance on a rate cut as early as September, according to CME Fed futures data—up sharply from midweek levels.

As if the labor news wasn’t enough, global trade tensions escalated after President Donald Trump moved forward with a round of modified tariffs. The White House announced overnight hikes ranging from 10% to 41%, including a new 40% penalty on goods transshipped in efforts to sidestep duties. In a particularly aggressive turn, Canadian imports—already facing a 25% tariff—will now be hit with a 35% levy.

Markets reeled at the breadth of the new duties, particularly given Canada’s status as a key U.S. trading partner.

Jeffrey Schulze, Head of Economic and Market Strategy at ClearBridge Investments, said the jobs report added a worrying dimension to already heightened trade anxieties.
“While investors have been viewing the start of the Fed’s cutting cycle as a positive for risk assets, today’s release is best characterized as ‘bad news is bad news.’”
“With job creation now hovering at stall speed, and a tariff wall looming ahead, there’s real concern that we could soon see negative payroll prints,” he warned.
“That may bring recession fears roaring back.”

Tech stocks—typically the engines of market optimism—also faltered. Amazon tumbled more than 7% after forecasting weaker-than-expected operating income for the current quarter, casting a shadow over the sector. However, Apple provided a rare bright spot, rising 2% after topping Wall Street’s earnings and revenue expectations.

The overall market mood remained tepid, despite upbeat results from companies like Microsoft and Meta Platforms earlier in the week. Thursday had already marked the S&P 500’s third straight daily decline. Early-session intraday highs evaporated as the tech rally lost momentum, leaving little resistance against Friday’s broader pullback.

In total, 25 S&P 500 companies touched new 52-week lows—a stark signal of declining investor confidence. Among them:

  • Charter Communications (lowest since May 2024)

  • Chipotle Mexican Grill (since Nov. 2023)

  • Lululemon, UnitedHealth, and UPS (each hitting levels unseen since early pandemic months)

  • Accenture, Dow Inc, CarMax, and Tyson Foods also marked fresh lows

On the upside, only seven S&P 500 stocks reached new highs.
These included:

  • Altria, trading at its best level since 2018

  • Northrop Grumman, hitting an all-time peak

  • CBOE Holdings, ResMed, American Electric Power, Evergy, and Xcel Energy, all reaching multi-year or record levels

Looking ahead, all eyes turn to how the Fed navigates mounting economic and geopolitical risks. As the delicate balance between policy and data becomes more urgent, investors are bracing for a volatile ride in the weeks to come.

As investors absorb the jolt of frail job growth and aggressive tariff revisions, the stock market stands at a critical crossroads. The sharp decline across major indexes reflects growing unease about the strength of the U.S. economy. While hopes for a timely Federal Reserve rate cut remain alive, they may no longer be enough to soothe market nerves. With trade tensions deepening and employment gains fading, Wall Street braces for turbulent days ahead—where every move, policy, or print could tip the fragile balance of investor confidence.

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Fed Freezes Rates as October Looms Over Market Expectations

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In a poised yet pressing decision, the Federal Reserve chose to hold interest rates steady between 4.25% and 4.5%, aligning with investor expectations while leaving the financial world in quiet suspense. As inflation creeps to 2.7% and tariff tensions cloud future forecasts, the Fed remains firmly watchful. Market whispers now shift toward October for the next possible rate cut, as traders recalibrate their bets. With job gains steady and uncertainty high, the Fed’s silent pause speaks volumes—and the economy listens, breath held, eyes fixed on the months ahead.

In a widely expected move, the Federal Reserve on Wednesday chose to keep its key interest rate steady, holding it within the 4.25% to 4.5% range. This marks another cautious step by the central bank as it continues to navigate a complex landscape shaped by inflation concerns, labor market signals, and trade policy uncertainty. The decision, closely aligned with market expectations tracked by the CME FedWatch tool, suggests the Fed is in no rush to act amid several unresolved economic questions.

While traders had earlier leaned toward a possible rate cut in September, sentiments shifted almost immediately after the Fed’s latest meeting. Attention has now turned to the central bank’s October 29 session as the most probable moment for any potential rate adjustment. Until then, Americans can expect short-term borrowing costs—closely tied to the Fed’s actions—to remain at their current elevated levels.

STORY HIGHLIGHTS

• Federal Reserve holds interest rates between 4.25% and 4.5%
• September rate cut now unlikely; focus shifts to October 29
• Fed Chair Powell emphasizes “no decision yet” for September
• Inflation rose slightly to 2.7% in May and June
• Tariff proposals by Trump add inflation uncertainty
• Labor market remains stable with 147,000 jobs added in June
• Fed awaits further data before next move on interest rates

“We Have Made No Decisions About September” — Fed Chair Jerome Powell

During a press briefing that followed the policy announcement, Federal Reserve Chair Jerome Powell made it clear that no future decisions have been locked in.

“We have made no decisions about September. We don’t do that in advance,” Powell told reporters. “We’ll be getting two more rounds of data on employment and inflation before then. That information will guide our thinking.”

His statement reflects the Fed’s wait-and-watch approach in a period marked by both optimism and ambiguity. The central bank has held rates steady since a modest 0.25% cut in December, keeping a careful eye on economic indicators that offer mixed signals about the strength of the U.S. recovery.

Tariffs Complicate the Path Forward

Adding another layer of complexity is the evolving trade policy landscape. Former President Donald Trump’s new round of proposed tariffs has cast a shadow over inflation forecasts. While inflation—once red-hot in the wake of the pandemic—has cooled to some extent, it ticked up slightly in both May and June, registering a 2.7% annual rate.

Analysts believe falling energy prices have helped to counterbalance the inflationary pressure brought on by tariff threats. But with many tariff details still unclear, the Fed is wary of making moves that could backfire. Lowering interest rates too soon could encourage borrowing and consumer spending—potentially pushing prices higher if tariffs end up inflating the cost of goods.

“A Great Deal of Uncertainty” — Powell on Trade Policy

Powell acknowledged these risks, stating, “I think there’s a great deal of uncertainty about, for example, where tariff policies are going to settle out. When they do settle out, what will be the implications for the economy—for growth and for employment? I think it’s too early to know that.”

This uncertainty is exactly why the Fed has opted to hold its ground. While its goal remains steady inflation around the 2% mark and a healthy employment rate, external forces like trade disputes can easily tilt that balance, requiring a flexible and data-dependent strategy.

Job Market Still Resilient, But Eyes Are on the Data

In the meantime, the job market continues to offer mixed but generally stable signals. The June employment report showed the economy added 147,000 jobs, and the unemployment rate dipped slightly to 4.1%. Still, Powell noted that certain indicators—such as slight upticks in inflation and pockets of labor market softening—could hint at early signs of strain.

A fresh set of employment data from the Bureau of Labor Statistics is due Friday and will likely play a crucial role in shaping the Fed’s next steps.

Looking Ahead: October in Focus

For now, Wall Street and Washington alike are looking to October. Market traders, who just weeks ago predicted a September rate cut with confidence, are now largely aligned with the idea that October is the more probable pivot point.

Until then, the Fed is signaling patience—and a willingness to adapt.

As the Federal Reserve stands firm on interest rates, the path ahead remains delicately balanced between cautious patience and responsive action. With inflation showing subtle signs of revival and global trade tensions reemerging, the Fed’s restraint underscores its commitment to data-driven judgment. October now looms large on the financial calendar, as markets await fresh signals from upcoming job and inflation reports. In a time of shifting tides and fragile confidence, the Fed’s silence is not indecision—but a deliberate pause in a game where every move holds weight.

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Trump Turns Up the Heat as Fed Faces Crucial Interest Rate Test

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As the Federal Reserve prepares to announce its interest rate decision on July 30, all eyes turn to Chair Jerome Powell amid renewed pressure from President Trump to slash borrowing costs. With inflation ticking above the Fed’s target and economic growth slowing, the central bank faces a delicate test. While Trump demands cuts, citing moves by global counterparts, the Fed appears poised to hold steady. This high-stakes standoff—where politics meets policy—now grips markets, as investors await Powell’s verdict on the nation’s financial path.

STORY HIGHLIGHTS:

  • Fed to announce decision on interest rates Wednesday at 2 p.m. ET

  • Rates expected to remain in the 4.25%–4.5% range

  • Odds of rate cut this week: Only 4%

  • Inflation in June: 2.7% — above Fed’s 2% target

  • Next potential cut likely at the Sept. 16–17 meeting

  • Trump: “Interest rates have to come down”

  • Powell: “Fed decisions are based on data, not politics”

In the latest display of tension between the White House and the nation’s central bank, President Donald Trump met privately last week with Federal Reserve Chair Jerome Powell, reiterating what he described as a “very simple” request: “Interest rates have to come down.”

The request comes at a time when the Federal Reserve is widely expected to keep interest rates unchanged during its upcoming announcement on Wednesday, July 30 at 2 p.m. ET. A press conference with Powell will follow at 2:30 p.m., where he will address the state of the economy and respond to questions about the Fed’s monetary policy stance.

Despite repeated pressure from the president and top administration officials, economists believe the Fed is unlikely to budge just yet. FactSet data puts the probability of the Fed holding rates steady at a striking 96%, signaling that Powell and his team remain committed to a cautious approach amid mixed economic signals.

The central bank has kept its benchmark interest rate in the 4.25% to 4.5% range since December 2024. That decision, made before Trump’s second-term inauguration in January, was aimed at keeping inflation under control while providing enough support for continued economic growth.

However, Trump has publicly expressed frustration at what he views as unnecessary hesitation. He has criticized Powell for months over what he calls the Fed’s “overly cautious” handling of interest rates. The President has argued that a rate cut would stimulate the economy, strengthen investment, and help American businesses thrive.

In recent remarks, Trump pointed to more aggressive monetary actions abroad:

“Look at what the European Central Bank and the Bank of England are doing — they’re cutting rates. We’re just sitting on our hands.”

Yet, Powell and other policymakers appear unfazed by the political messaging. They continue to assert that interest rate decisions are determined not by politics, but by economic fundamentals.

“Our decisions are guided solely by data and our dual mandate: maximum employment and stable prices,” Powell has stated repeatedly in past briefings, emphasizing the independence of the Federal Reserve.

Adding to the strain, senior Trump administration officials have floated criticism of Powell’s handling of a Federal Reserve building renovation, suggesting it could be used as justification for his removal. However, any such move would likely spark legal and political challenges, as the Fed chair has fixed-term protection under federal law.

Meanwhile, inflation is proving to be more persistent than expected. The Consumer Price Index rose to 2.7% in June, surpassing the Fed’s 2% target and underscoring concerns that recent tariffs introduced by the Trump administration may be contributing to rising consumer prices. This puts the Fed in a tough spot: cut rates and risk stoking inflation, or stay the course and risk slowing economic momentum.

According to Ryan Sweet, chief U.S. economist at Oxford Economics:

“With the labor market holding up and the impact of tariffs on inflation starting to rear its ugly head, the Federal Reserve has plenty of ammunition to justify keeping interest rates unchanged at the July meeting.”

Some internal debate does exist within the Federal Open Market Committee (FOMC), the 12-member body responsible for setting interest rates. At least two members — Christopher Waller and Michelle Bowman — have recently signaled that a rate cut may be warranted soon.

If both dissent, it would mark the highest number of dissenting votes in a Fed rate decision since 1993. Still, the majority view remains in favor of patience. As Sweet noted:

“Dissents are normal and even healthy. They show the Fed isn’t falling into groupthink.”

The broader economic picture supports that caution. Job growth in June exceeded expectations, and second-quarter GDP, though slowing, is still projected to expand by 1.8%, compared to 2.8% in 2024. While not stellar, the figures don’t yet paint a picture of crisis.

“Policymakers remain cautious, navigating persistent inflationary risks tied to trade policy along with cooling labor market conditions and growing political pressure from the administration to accelerate rate cuts,” said Gregory Daco, Chief Economist at EY-Parthenon.

The Fed’s primary tools—interest rate hikes and cuts—are designed to adjust the speed of economic activity. Raising rates tends to slow spending and investment by making borrowing more expensive, helping contain inflation. Conversely, lowering rates can stimulate the economy but may also fuel price increases if not timed correctly.

Looking ahead, economists believe the Fed is far more likely to deliver a cut during its September 16–17 meeting, as that would give more time to assess inflationary trends and job market shifts. FactSet estimates a 63% probability of a rate cut in September, likely by 0.25 percentage points, bringing the target range to 4% to 4.25%.

“With no imminent need to act, the Fed will likely wait until September to deliver the next 25 basis point rate cut,” Daco said, adding that further cuts could follow in 2026 if economic conditions deteriorate further.

As Powell prepares to face reporters on Wednesday, many will be watching not just for his view on inflation and growth, but also his response to escalating pressure from the Trump administration. While Powell’s current term extends through May 2026, speculation has grown that the White House may move to name a successor early to shape the Fed’s direction in the final years of Trump’s presidency.

Even so, Powell has shown little sign of yielding.

“The odds are that [Powell] sticks with his mantra that it doesn’t impact monetary policy and he isn’t resigning, while dodging questions about a shadow Fed chair,” Sweet observed.

As the Fed walks a tightrope between economic data and political interference, Wednesday’s decision—and Powell’s words—will offer a crucial signal on how the central bank plans to navigate an increasingly complex landscape.

As anticipation builds ahead of the Federal Reserve’s July 30 announcement, the path forward remains delicately balanced between economic signals and political pressure. While the White House intensifies its call for immediate rate cuts, the Fed holds firm to its data-driven mandate, navigating inflation concerns and global uncertainties with caution. Chair Jerome Powell’s steady approach reflects an institution aiming to preserve credibility in turbulent times. Whether rates fall now or in the months ahead, the decision will shape the trajectory of the U.S. economy—and define the Fed’s independence in the process.

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