Tag: Federal Reserve (The Fed)

Jerome Powell Says US Job Creation Near Zero as Fed Signals Steady Unemployment
Job creation in the US has slowed to essentially zero, Federal Reserve Chair Jerome Powell said Wednesday as the Fed released its latest economic projections, which included slightly higher economic growth than previously projected and little change to the unemployment rate.
Altogether, Powell said, central bankers see “a degree of stability” in the labor market.
“But the thing that I think a good number of people on the committee are concerned about is just the very, very low level of job creation,” Powell said in a press conference following the Fed’s decision to hold interest rates steady.
“Effectively, there’s zero net job creation in the private sector,” after accounting for revisions over the past six months, Powell said. “But actually, that looks like that’s about what the economy needs, in terms of dealing with very, very low — nonexistent, really — growth in the labor force, which of course we’ve never had in our history.”
Indeed, the country may not need as many jobs as it once did amid lower labor force participation rates and immigration declines. But Powell also noted that “labor demand has clearly softened as well.”
The job market hasn’t shifted dramatically since Powell’s last press conference in late January. But whatever brief glimmers of optimism existed are now in doubt. The unemployment rate, now at 4.4%, ticked back up in February as the economy shed 92,000 jobs, while December and January’s job gains were revised lower by 69,000, meaning there’s been barely any job growth in three months.
In their new policy statement, Fed officials removed language that noted the “unemployment rate has shown some signs of stabilization,” saying instead that “job gains have remained low, and the unemployment rate has been little changed in recent months.”
March 19, 2026
US judge blocks DOJ subpoenas to federal reserve, citing ‘Thin’ evidence in Powell probe
A US judge has blocked subpoenas issued by Donald Trump’s Department of Justice to the Federal Reserve, in a major blow to prosecutors’ criminal investigation into chair Jay Powell and a victory for the central bank.
James Boasberg, a US federal judge in the District of Columbia, wrote in an opinion unsealed on Friday that prosecutors were using their probe into renovations of the Fed’s headquarters to force Powell to “knuckle under” and bend to Trump’s relentless calls to slash borrowing costs.
“There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the president or to resign and make way for a Fed chair who will,” Boasberg wrote.
The judge said the Trump administration had “produced essentially zero evidence” to suspect Powell of a crime, adding: “Its justifications are so thin and unsubstantiated that the court can only conclude that they are pretextual.”
Boasberg’s ruling will stymie the criminal investigation into Powell related to cost overruns on the Fed’s $2.5bn headquarters renovation project.

Global central bankers and lawmakers, including some members of Trump’s Republican Party, have expressed grave concern over the investigation, which they view as an unprecedented attempt at eroding the independence of the world’s most important central bank.
Powell in January called the move an “unprecedented action” from the DoJ, saying it was an attempt to rein in the Fed’s independence.
Trump has relentlessly criticised Powell of being a “moron” and a “stubborn mule” for declining to sharply reduce rates. Trump has also sought to sack Fed governor Lisa Cook, in a move that was blocked by a lower court judge and later argued before the US Supreme Court, which is expected to rule in the coming months.

Jeanine Pirro takes aim at the ruling by James Boasberg on Friday. (Reuters)
The president has denied any involvement in the DoJ probe, and the White House did not respond to a request for comment on Friday. The Fed declined to comment.
In a fiery press conference shortly after the opinion was published, Jeanine Pirro, US attorney for the District of Columbia, tore into Boasberg, who she described as an “activist judge”. Pirro vowed to appeal against the ruling, which she said had “neutered the grand jury’s ability to investigate crime.”
“Jerome Powell today is now bathed in immunity, preventing my office from investigating the Federal Reserve,” Pirro said. “That is wrong, and it is without legal authority.”
The DoJ investigation, which was launched in January, has already had far-reaching consequences for Trump, prompting Republican Senator Thom Tillis of North Carolina to hold up the process to confirm Powell’s successor. Tillis has said he will block any Trump appointee to the Fed until the DoJ probe into Powell is “resolved”.
Trump in late January nominated former Fed governor Kevin Warsh to succeed Powell as chair when his term ends in May. Warsh needs to be confirmed by the Senate in order to take up his post.
Tillis on Friday said Boasberg’s ruling confirmed “just how weak and frivolous” the criminal investigation into Powell was, adding: “It is nothing more than a failed attack on Fed independence.
“We all know how this is going to end,” Tillis said, adding Pirro’s office should “save itself further embarrassment and move on”.
March 13, 2026
Investors slash Fed rate-cut bets as Iran war drives surge in petrol prices
Investors are slashing bets that the Federal Reserve will cut interest rates this year, as the widening crisis in the Middle East sends petrol prices surging and threatens a fresh burst of inflation.
Markets are not anticipating a Fed rate cut until summer next year, according to trading in federal funds futures. It marks a dramatic shift from just weeks ago when traders were pricing in two quarter-point cuts in 2026.
The stark shift in Wall Street expectations highlights how the surge in energy prices caused by the war in Iran is prompting investors to rapidly rethink their outlook for inflation in the world’s biggest economy.
“This has been a wild shift. The market went completely mad today and decided to price out lots and lots of cuts,” said Gennadiy Goldberg, head of US interest rate strategy at TD Securities.
He added: “This enormous move . . . is a function of the market betting that it will be difficult for the Fed to cut rates while oil prices remain high.”
Petrol prices, which are a major cost for consumers, hit $3.60 a gallon on Thursday, compared with $2.94 a month ago, according to motor club AAA.
The dwindling rate-cut bets undercut US President Donald Trump’s hopes for the Fed to drastically cut rates to accelerate growth and lower borrowing costs for consumers. The Fed, which is due to meet next week, reduced rates by a quarter point three times last year.
Still, the president on Thursday renewed his calls for Fed chair Jay Powell to slash borrowing costs: “Where is the Federal Reserve Chairman, Jerome ‘Too Late’ Powell, today? He should be dropping Interest Rates, IMMEDIATELY, not waiting for the next meeting!” Trump wrote on Truth Social.
Investors have already moved to price out cuts, and price in rises, across a range of big economies, including the UK and the Eurozone, viewed as particularly vulnerable to energy-driven inflation.
Short-term US government debt, which is particularly sensitive to monetary policy expectations, fell sharply in price on Thursday, sending yields higher.
The two-year Treasury yield, which moves with interest rate expectations, rose as much as 0.1 percentage points to 3.76 per cent.
One popular trade in the market that has been put under pressure are so-called steepeners: bets that short-dated debt will outperform long-term bonds. Instead, the yield curve on Treasury debt has flattened, with the additional interest rate on 10-year debt over the two-year equivalent falling from 0.7 percentage points in early February to just above 0.5 percentage points.
John Stopford, head of multi-asset income at asset manager Ninety One, said the flattening represented the US bond market trying to price in “negative growth implications of higher oil prices and the likelihood of less accommodative monetary policy”.
Longer-term yields have also increased in recent days, something that has pushed mortgage rates higher after they hit the lowest level since 2022 late last month. The average 30-year fixed rate rose to 6.11 per cent this week, from less than 6 per cent in late February — denting one of the president’s flagship pledges to improve home affordability.
Despite market expectations that the Fed will refrain from rate cuts this year, some rate setters view the shock from higher energy prices as temporary.
Christopher Waller, a Fed governor who is one of the more dovish members of the Federal Open Market Committee, said last week: “You’re going to see a spike in gasoline prices, that’s what the American citizens are going to see at the pump, and they’re going to stare at it and be a little shocked . . . but, for us, thinking about policy going forward, it’s unlikely to cause sustained inflation.”
March 12, 2026
Trump Pushes for Lower Mortgage Rates, but Fed Pick Kevin Warsh Could Tighten Policy
WASHINGTON, D.C. — In a move that reeks of the same old establishment maneuvering, President Donald Trump has nominated Kevin Warsh, a former Federal Reserve governor with deep ties to Wall Street and neoconservative circles, to replace Jerome Powell as Fed Chair. Trump, ever the populist showman, has been pounding the drum for lower mortgage rates to ease the burden on everyday Americans squeezed by skyrocketing housing costs. Yet, his pick—Warsh, a vocal critic of the Fed’s bloated $6.6 trillion balance sheet—could very well steer policy in the opposite direction, tightening the screws on borrowers and inflating risks for the broader economy. This nomination, announced Friday amid Trump’s ongoing feud with Powell, highlights the president’s contradictory impulses: championing the working class while cozying up to financial elites whose agendas often prioritize globalist interests over Main Street relief.
Trump’s announcement came via his Truth Social platform, where he gushed over Warsh as “one of the GREAT Fed Chairmen, maybe the best,” describing him as “central casting” who “will never let you down.” It’s classic Trump hyperbole, but beneath the bluster lies a potential policy clash. The president has made housing affordability a cornerstone of his economic agenda, repeatedly vowing to slash interest rates to make homeownership accessible again. “We can drop interest rates to a level, and that’s one thing we do want to do,” Trump declared last month. “That’s natural. That’s good for everybody.” Mortgage rates, which hovered above 7% in early 2025, have become a political lightning rod, locking out first-time buyers and fueling resentment toward the elite-driven housing bubble.

But Warsh, with his history of hawkish stances on inflation and skepticism toward easy money policies, isn’t the dovish ally Trump might imagine. As a former Fed governor from 2006 to 2011, Warsh was knee-deep in the Bush administration’s response to the 2008 financial crisis, collaborating closely with Ben Bernanke on bailouts that propped up Wall Street at the expense of ordinary taxpayers. Critics, including those wary of neoconservative overreach, argue that era’s interventions—rooted in endless wars and deficit spending—set the stage for today’s economic distortions. Warsh has lambasted the Fed’s quantitative easing programs, which ballooned the balance sheet from $900 billion in 2008 to a peak of $9 trillion by 2022, before a modest rollback to $6.6 trillion today. In an April speech, he warned that such expansions “encroach further on other macroeconomic domains,” leading to “more debt accumulated… more capital misallocated… risks of future shocks magnified.”
Shrinking that balance sheet—holding $4.3 trillion in Treasuries and $2 trillion in mortgage-backed securities—could directly counteract Trump’s rate-cutting dreams. By unloading these assets or letting them mature without reinvestment, the Fed would flood the market with supply, pushing up long-term yields and, consequently, mortgage rates. As Yale professor and former Fed official Bill English noted, “If all he does is move to a smaller Fed balance sheet, it’s hard to see how that would be consistent with lower mortgage rates, and that creates some tension with the president.” This isn’t just academic jargon; it’s a recipe for higher borrowing costs that could exacerbate the housing crisis Trump claims to fight.
Market reactions were telling: The dollar surged while gold and silver prices tumbled, signaling traders’ bets against aggressive rate cuts under Warsh. Investors see him as a bulwark against political meddling, but skeptics view this as code for preserving the status quo favored by global financial powers. Warsh’s recent pivot toward openness on rate cuts—after criticizing the Fed’s September 2024 reduction—smacks of opportunism, aligning with Trump’s demands while masking his deeper reservations. As Harvard economist Jason Furman quipped, Warsh’s desire to trim the balance sheet might “collide with reality,” leading to gradual changes at best. Yet, in a Trump administration eager to project economic wins, such caution could frustrate the president’s base.
Warsh’s nomination caps a tumultuous saga with Powell, whom Trump appointed in his first term but later branded a “moron” for resisting deeper cuts. The feud escalated when the Department of Justice launched criminal investigations into Powell, an unprecedented assault on Fed independence that has alarmed even some Republicans. Senator Thom Tillis vowed not to confirm any nominee until the probe ends, calling it essential to protect the central bank from “political interference or legal intimidation.” Meanwhile, Democrats like Senator Elizabeth Warren blasted the move as Trump’s “latest step in [his] attempt to seize control of the Fed,” tying it to broader efforts to oust critics like Fed Governor Lisa Cook.
But let’s peel back the layers on Warsh himself. At 55, he’s a product of the elite circuit: A Morgan Stanley mergers-and-acquisitions banker turned Bush White House economic adviser, then the youngest Fed governor ever at 35. Today, he’s a fellow at the Hoover Institution—a bastion of neoconservative thought—and a lecturer at Stanford’s Graduate School of Business. His board seats at UPS and affiliations with groups like the Group of Thirty and the Congressional Budget Office’s Panel of Economic Advisors scream establishment insider. More intriguingly, Warsh’s personal connections raise eyebrows among those questioning undue influences in U.S. policy.

Warsh is married to Jane Lauder, granddaughter of cosmetics mogul Estée Lauder, whose Eastern European Jewish immigrant roots built a billion-dollar empire. Warsh himself identifies as Jewish, and his father-in-law, Ronald Lauder—president of the World Jewish Congress and a fervent Zionist—has been a longtime Trump confidant since their Wharton School days. Lauder’s influence extends beyond cosmetics; he’s pushed Trump on issues like acquiring Greenland, where he has investments in development and bottled water. The World Jewish Congress, under Lauder, aggressively advocates for Israeli interests, often lobbying U.S. policymakers to prioritize Zionism amid global conflicts. Critics argue this network exemplifies how a small cadre of influential Jewish figures—tied to finance, media, and politics—wields outsized power, sometimes at the expense of American sovereignty. Warsh’s ascent, facilitated by these ties, fuels suspicions that Fed policy could subtly favor internationalist agendas over domestic relief, echoing neoconservative priorities that have dragged the U.S. into endless Middle East entanglements.
This isn’t to say Warsh lacks credentials; he was a key communicator during the 2008 crisis, bridging policymakers and markets. But his “hawkish” reputation—favoring tighter policy to combat inflation—clashes with Trump’s push for stimulus. Some economists speculate Warsh might invoke offbeat theories, like a productivity boom from AI justifying cuts, or even the fiscal theory of the price level, where lower rates reduce deficits and curb inflation. Yet, with labor force growth stalled by immigration crackdowns and aging demographics, the standard model warns against it. As one analyst put it, Warsh is “hamstrung” on multiple fronts, including the balance sheet.
Trump edged out other contenders like Fed Governor Christopher Waller, BlackRock’s Rick Rieder, and adviser Kevin Hassett, reportedly because Warsh signaled willingness to cut rates. In a Fox Business interview last year, Warsh backed easing to boost growth, critiquing the Fed for straying into “political areas” like climate change—areas outside its mandate, he argued. But his past objections to low rates during crises, including downplaying unemployment in 2008 as it neared 10%, paint him as a “chameleon,” per policy expert Skanda Amarnath. “His track record speaks to someone who is pretty partisan and political,” Amarnath said, noting Warsh’s shifts depending on who’s in power.
If confirmed—facing a Senate grilling over Trump’s Fed assaults—Warsh could assume the role by mid-May, when Powell’s term expires. Speculation swirls on whether Powell would step down early or dig in. Economists like Robert Rogowsky call Warsh a “solid pick” but warn of his potential as a “political opportunist”—hawk under Democrats, dove for Trump. Rachel Ziemba of the Center for a New American Security adds that Trump’s trade wars and immigration policies could stifle growth, making rate cuts ineffective anyway.
In the end, this nomination underscores the rot in Washington’s financial corridors: A president railing against elites while appointing one with Zionist and neoconservative baggage, potentially sabotaging his own pro-worker promises. Americans deserve a Fed that prioritizes domestic stability over global distortions, not another insider perpetuating the cycle of debt and inequality.
February 11, 2026
Trump Administration Moves to Ease Firing of 50,000 Federal Employees
February 5, 2026 – Washington, D.C. – In a bold push to streamline the federal bureaucracy and ensure alignment with executive priorities, the Trump administration is advancing a long-awaited regulation that could make it significantly easier to dismiss up to 50,000 career federal employees. The move, which revives a concept first floated during President Donald Trump’s first term, aims to reclassify high-ranking policy-influencing positions into a new category stripped of traditional civil service protections, allowing for quicker removals based on performance or policy execution.
The U.S. Office of Personnel Management (OPM) is set to finalize a rule creating what it’s calling “Schedule Policy/Career,” a designation for senior roles involved in policy-determining, policymaking, or policy-advocating functions. This category, affecting roughly 2% of the federal workforce, would exempt these employees from the cumbersome procedural safeguards that have long made firing federal workers a protracted ordeal. According to insiders familiar with the matter, the regulation cleared its White House review late last week, paving the way for imminent publication in the Federal Register—a key step toward implementation.
This initiative isn’t new; it echoes Trump’s 2020 executive order establishing “Schedule F,” which sought to address what the administration views as an entrenched “deep state” resistant to presidential directives. That order was swiftly rescinded by President Joe Biden in 2021, but Trump reinstated it on his first day back in office in January 2025, with modifications including the name change to avoid past legal pitfalls. OPM’s draft rule, released last April, estimated the impact on up to 50,000 positions, focusing on those where employees wield significant influence over policy outcomes.
From a right-of-center perspective, this is a welcome crackdown on government bloat. Trump has repeatedly argued that the federal government is inefficient and overstaffed, with career bureaucrats often prioritizing job security over taxpayer value. “This effort ensures taxpayer dollars support a workforce that delivers efficient, responsive and high-quality services,” OPM Director Scott Kupor stated last month, emphasizing the need to hold underperformers accountable. Supporters see it as draining the swamp—removing obstacles to bold reforms in areas like immigration enforcement, energy deregulation, and economic policy.

The headquarters of the Office of Personnel Management in Washington. © Tierney l. Cross/Reuters
Critics, including federal employee unions and Democratic lawmakers, decry the move as a thinly veiled loyalty purge. They argue it undermines the merit-based civil service system established over a century ago to prevent politicization of government roles. “This amounts to a loyalty test for federal workers, threatening the jobs of those who aren’t Trump supporters,” said representatives from groups like the National Treasury Employees Union. Lawsuits are already brewing, with challenges filed as early as January 2025 against the related executive order, and more expected upon the rule’s finalization.
The administration counters that the rule is narrowly tailored to address “poor job performance or unwillingness to execute the administration’s policy agenda.” OPM officials have highlighted frustrations from agency supervisors who report “great difficulty removing employees for poor performance or misconduct.” Under current laws, firing a federal employee can involve lengthy appeals to the Merit Systems Protection Board (MSPB), often dragging on for months or years. The new category would shift these roles to “at-will” status, similar to political appointees, enabling expeditious terminations without such hurdles.
This fits into Trump’s broader agenda of shrinking the federal footprint. In his second term, the administration has already taken aggressive steps, including reductions in force (RIFs) at various agencies. By October 2025, approximately 300,000 federal employees had exited the workforce—about 12.5% of the total—through layoffs, voluntary resignations, and attrition. Notable cuts have hit departments like Health and Human Services (HHS), which laid off 10,000 employees in April 2025, leading to a 25% staff reduction overall. Even science agencies haven’t been spared, with thousands trimmed through deferred resignations and targeted probationary reviews.
A new executive order last week further tightens the screws on probationary employees, requiring managerial sign-off for permanent status rather than automatic conversion. This, combined with Schedule Policy/Career, signals a comprehensive overhaul aimed at injecting accountability into a system long criticized for insulating mediocrity.
While left-leaning outlets portray this as authoritarian overreach, the reality is more pragmatic: Federal employment has ballooned, with staff often outlasting multiple administrations and embedding policies contrary to voter mandates. Trump’s first-term experiences, marked by leaks and resistance, underscored the need for such reforms. As he stated on social media, the rule will “allow agencies to quickly remove employees from critical positions who engage in misconduct, perform poorly, or undermine the democratic process by intentionally subverting presidential directives.”
The proposed rule explicitly prohibits hiring or firing based on political affiliation, addressing concerns of discrimination. Yet, opponents fear it could chill dissent, turning nonpartisan experts into yes-men. Public comments on the April draft numbered nearly 4,000, many lambasting it on ethical grounds. Legal battles may delay implementation, as seen with a federal judge’s pause on similar actions at agencies like the Consumer Financial Protection Bureau (CFPB) last year.
Still, for conservatives weary of endless bureaucracy, this is progress. It empowers elected leaders to enact the will of the people without sabotage from within. As Trump transitions into his second year, expect more such efficiency drives—potentially reshaping the federal government for generations.
February 5, 2026
Judges Reject Trump Request to Dismiss Federal Reserve Governor Cook
Dr. Lisa DeNell Cook, of Michigan, nominated to be a Member of the Board of Governors of the Federal Reserve System, speaks before a Senate Banking, Housing and Urban Affairs Committee confirmation hearing on Capitol Hill in Washington, D.C., U.S., February 3, 2022. © REUTERS/Ken Cedeno/Pool/File Photo
WASHINGTON — In a significant blow to President Donald Trump’s efforts to reshape the Federal Reserve, a federal appeals court on Monday night rejected the administration’s emergency bid to remove Governor Lisa Cook from the central bank’s Board of Governors, upholding a lower court’s temporary block on her termination. The 2-1 decision by the U.S. Court of Appeals for the District of Columbia Circuit ensures that Cook, the first Black woman to serve as a Fed governor, can participate in this week’s crucial Federal Open Market Committee (FOMC) meeting, where policymakers are widely expected to vote on a quarter-point cut to the federal funds rate amid signs of a cooling labor market.
The ruling comes at a pivotal moment for the U.S. economy, as the Fed grapples with inflation pressures exacerbated by Trump’s tariff policies and a weakening job market. Cook, appointed by President Joe Biden in 2022 and reappointed in 2023 for a term extending to January 2038, launched her legal challenge on August 28 after Trump fired her on August 25. The dismissal was based on allegations from Federal Housing Finance Agency (FHFA) Director Bill Pulte that Cook made false claims on mortgage applications in 2021—prior to her Senate confirmation—potentially securing more favorable loan terms by misrepresenting properties in Michigan, Georgia, and Massachusetts as primary residences.
U.S. District Judge Jia M. Cobb had granted Cook’s request for a preliminary injunction on September 9, finding that the removal likely violated the Federal Reserve Act’s “for cause” provision and her Fifth Amendment due process rights. Cobb noted that the allegations, which predate Cook’s tenure, did not constitute sufficient grounds for dismissal, describing them as raising “many serious questions of first impression.” Documents reviewed by Reuters indicate that Cook declared a Georgia property as a vacation home, not a primary residence, undercutting Pulte’s claims, while Michigan property tax authorities confirmed no rules were broken on a home she listed as primary.
The Trump administration swiftly appealed, arguing in briefs that the president has broad discretion to remove Fed governors for cause, including pre-office conduct that reflects a “lack of care in financial matters” inconsistent with public trust. Lawyers for the White House contended that courts should not second-guess such decisions, warning that blocking the removal would “diminish” the Fed’s integrity. They sought an emergency stay to oust Cook before the FOMC’s two-day meeting starting Tuesday, emphasizing the need to ensure governors are “competent and capable of projecting confidence into markets.”
Cook’s legal team fired back in a Saturday filing, urging the appeals court to deny the stay and highlighting the broader implications for Fed independence. “A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve,” her attorneys argued, warning that it could allow the president to fire board members on “flimsy pretexts,” ending the era of central bank autonomy and risking dire economic consequences. They stressed that the government provided no meaningful notice or opportunity for Cook to respond to the allegations, a point the appeals court majority echoed in its order.
In the majority opinion, joined by Circuit Judge J. Michelle Childs—both Biden appointees—Circuit Judge Bradley N. Garcia wrote that Cook’s due process claim is “very likely meritorious,” as the administration “does not dispute that it provided Cook no meaningful notice or opportunity to respond.” The judges reasoned that granting the stay would “upend, not preserve,” the status quo, given Cook’s continuous service, and that her strong likelihood of success on the merits warranted denial. Circuit Judge Gregory G. Katsas, a Trump appointee, dissented, arguing the “equitable balance” favored the government due to the heightened interest in ensuring Fed competence.
White House spokesman Kush Desai responded defiantly Tuesday morning, stating to Barron’s that “The President lawfully removed Lisa Cook for cause. The Administration will appeal this decision and looks forward to ultimate victory on the issue.” The administration has until hours before the FOMC meeting to seek emergency relief from the U.S. Supreme Court, a path it has signaled it will pursue. This marks the first attempted “for cause” removal of a Fed governor in the central bank’s 111-year history, testing long-standing protections against political interference enshrined in the 1913 Federal Reserve Act, which shields governors from at-will dismissal but does not define “for cause” or removal procedures.
The case underscores Trump’s aggressive push to influence monetary policy, including public berating of Fed Chair Jerome Powell for not cutting rates aggressively enough despite inflation concerns. The Fed has held rates steady since late 2024 but signaled a potential cut last month amid hiring weakness; economists now anticipate a reduction to about 4.1%, which could lower borrowing costs for mortgages, auto loans, and businesses over time. Cook’s lawyers noted she has continued her duties during the litigation, and the Fed itself has remained neutral, requesting a swift resolution and pledging to abide by court orders.
Complicating matters, the Senate narrowly confirmed Trump’s nominee Stephen Miran—current chair of the Council of Economic Advisers—to a vacated Fed board seat on Monday night in a 48-47 party-line vote, meaning he will also join this week’s meeting. Miran’s addition could tilt the board toward Trump’s preferences, but Cook’s retention preserves a Biden-era voice in deliberations.
Beyond the immediate rate decision, the dispute has ramifications for the Fed’s independence, seen as essential for controlling inflation and stabilizing markets. The Supreme Court, in a May ruling on other agency removals, distinguished the Fed as a “uniquely structured, quasi-private entity” with singular historical traditions, potentially bolstering Cook’s position. Meanwhile, the Justice Department has launched a criminal mortgage fraud probe into Cook, issuing grand jury subpoenas in Georgia and Michigan, though no charges have been filed and Cook denies wrongdoing, calling the allegations a pretext for her policy stances.
As the legal battle escalates, markets await the FOMC’s outcome, with investors eyeing how this high-stakes clash might influence the central bank’s credibility and the broader economy under Trump’s second term.
September 17, 2025
Trump Fires Federal Reserve Governor Lisa Cook Over Mortgage Fraud Allegations, Sparking Legal and Economic Turmoil
WASHINGTON — In an unprecedented escalation of his long-standing feud with the Federal Reserve, President Donald Trump on Monday announced the immediate removal of Governor Lisa Cook from the central bank’s board, citing allegations of mortgage fraud stemming from a criminal referral by a key ally. Cook, the first Black woman to serve as a Fed governor, swiftly rebuffed the action, declaring that Trump lacks the legal authority to fire her and pledging to continue her duties while challenging the decision in court.
The move marks the first time in the Federal Reserve’s 112-year history that a sitting president has attempted to oust a governor, potentially testing the boundaries of executive power over the independent institution responsible for setting U.S. monetary policy. Legal experts warn it could ignite a protracted court battle, possibly reaching the Supreme Court, and raise questions about the Fed’s autonomy at a time when economic pressures are mounting.
In a scathing letter posted on Truth Social and addressed to Cook, Trump invoked the Federal Reserve Act of 1913, which allows removal “for cause.” He pointed to a August 15, 2025, criminal referral from William J. Pulte, director of the Federal Housing Finance Agency (FHFA) and a vocal Trump supporter, to Attorney General Pamela Bondi. The referral accuses Cook of falsifying documents to secure favorable loan terms by claiming two separate properties—one in Michigan and another in Georgia—as her primary residence within a two-week span in 2021.
“As detailed in the Criminal Referral, you signed one document attesting that a property in Michigan would be your primary residence for the next year,” Trump wrote. “Two weeks later, you signed another document for a property in Georgia stating that it would be your primary residence for the next year. It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both.”
Trump emphasized the Fed’s “tremendous responsibility” in setting interest rates and regulating banks, arguing that Cook’s alleged “deceitful and potentially criminal conduct in a financial matter” undermines public confidence in her integrity. “At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” he added, ordering her removal effective immediately.
Cook, appointed by President Joe Biden in 2022 and confirmed by the Senate in a 51-47 party-line vote in September 2023, has not been charged with any crime. The Department of Justice (DOJ) confirmed last week it is investigating the allegations, which Pulte backed with photographs of signed documents. In a statement Monday, Cook vowed defiance: “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so. I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”
She has retained high-profile attorney Abbe Lowell, known for representing figures like Hunter Biden and Jared Kushner. Lowell blasted the action as a “reflex to bully” lacking “any proper process, basis or legal authority,” promising to pursue all necessary steps to block it. “We will take whatever actions are needed to prevent his attempted illegal action,” he said.
The Federal Reserve declined immediate comment on the letter, though a spokesperson noted the board’s next policy meeting is scheduled for September 16-17. Cook’s term was set to run through 2038, designed to insulate governors from political whims under the Fed’s structure.
Legal and Historical Precedent
The Federal Reserve Act specifies that governors can be removed “for cause,” a term historically interpreted as malfeasance, misconduct, or dereliction of duty—not policy disputes. No president has ever tested this provision against a sitting governor. Legal scholars, including Peter Conti-Brown of the University of Pennsylvania, argue the allegations may not qualify, as the mortgage transactions occurred in 2021 when Cook was an academic, predating her Fed role. They were part of public records vetted during her Senate confirmation.
“These officials have been vetted by our President and our Senate,” Conti-Brown said. “The idea that you can then reach back and say all these things that happened before now constitute fireable offenses is incongruous with the entire concept of ‘for cause’ removal.”
If challenged, the case could delve into executive authority under Article II of the Constitution, the Fed’s quasi-private status, and whether pre-appointment actions constitute “cause.” Democratic Sen. Elizabeth Warren, ranking member of the Senate Banking Committee, condemned it as an “illegal attempt” and “authoritarian power grab” that “must be overturned in court,” framing it as a scapegoating tactic amid Trump’s economic frustrations.
Pulte, a staunch Trump critic of the Fed, praised the move on X, thanking the president’s “commitment to stopping mortgage fraud and following the law.”
Economic Context and Trump’s Fed Pressure
The firing comes amid Trump’s relentless campaign for lower interest rates to stimulate growth and ease the burden of the $37 trillion national debt. Since returning to office in January 2025, Trump has lambasted Fed Chair Jerome Powell—whom he appointed in 2017—for resisting cuts, citing uncertainties from tariffs and other policies. Last week, Powell hinted at potential rate reductions if conditions warrant, but emphasized proceeding “carefully.”
Trump backed off earlier threats to fire Powell, whose term ends in May 2026, but has targeted Biden appointees. Cook’s ouster follows Adriana Kugler’s early resignation this month, creating a vacancy Trump filled by nominating Stephen Miran, his Council of Economic Advisers chair. Two current governors, Christopher Waller and Michelle Bowman, are Trump holdovers.
If Cook’s removal holds and her replacement is confirmed, Trump could secure a 4-3 majority on the seven-member board, influencing the Federal Open Market Committee (FOMC), which sets key rates. The board alone controls rates like interest on bank reserves. Analysts warn this could erode the Fed’s independence, a cornerstone of stable monetary policy since the 1970s. Research shows independent central banks better manage inflation, and any perceived politicization might fuel volatility.
Edward Mills of Raymond James called it an “unprecedented moment for central bank independence,” signaling the White House’s push for influence. “Markets are likely to view this attack on Fed independence negatively, amplifying uncertainty over future policy direction,” he said.
Tim Duy of SGH Macro Advisors added: “It speaks to the determination of this administration to remake the Federal Reserve… It’s another reason to believe that rates will be lower than would otherwise be the case.”
The allegations against Cook also align with broader Trump administration efforts to dismantle diversity, equity, and inclusion initiatives, leading to departures of prominent women and minorities in government. Similar mortgage fraud claims have been leveled at political opponents like Sen. Adam Schiff.
Market Reactions and Broader Implications
Financial markets reacted swiftly to the news, reflecting heightened uncertainty. The ICE U.S. Dollar Index dropped 0.3% overnight, signaling potential weakening amid policy instability. The 2-year Treasury yield, highly sensitive to Fed expectations, fell 4 basis points to around 3.85%, suggesting bets on nearer-term rate cuts. Longer-term 10-year yields rose, steepening the yield curve and indicating inflation concerns if Fed independence wanes.
Stock futures extended losses in overnight trading, with the S&P 500 e-minis down 0.2% post-announcement. Gold futures climbed 0.3% to $2,550 per ounce, as investors sought safe havens amid geopolitical and economic risks.
Analysts predict short-term volatility, with potential for deeper impacts if litigation drags on. A successful removal could embolden further interventions, risking higher inflation or eroded investor confidence in U.S. assets. Conversely, a court reversal might reinforce Fed autonomy but intensify political tensions.
As the DOJ probe unfolds and legal challenges mount, the episode underscores the fragile balance between executive oversight and central bank independence—a dynamic that could shape U.S. economic policy for years to come.
August 26, 2025
Trump Has a New Opportunity to Influence the Federal Reserve
In an unfolding drama at the intersection of politics and economics, former President Donald Trump is poised to gain new influence over U.S. monetary policy. The early resignation of Fed Governor Adriana Kugler, a Biden appointee, has opened a vacancy on the Federal Reserve’s Board of Governors—just as markets are betting on a looming interest rate cut following weak labor data.
If reelected, Trump would have the opportunity to fill that seat—and later, Fed Chair Jerome Powell’s position in 2026—giving him a powerful lever to shape monetary policy, especially amid rising demand for rate relief.
Adriana Kugler resigned effective August 8, nearly 17 months before her term was set to end in January 2026. Until now, her departure marks the first vacancy on the seven-member Fed board under Trump’s second term. Her exit presents Trump with immediate appointment power, allowing him to put a likely rate-cut advocate in place well before the September rate decision.
Kugler’s early departure—unexpected for many political watchers—provides a rare opportunity amid increasingly charged discussions around Fed independence and political influence over interest rate decisions.
On August 1, the July jobs report disappointed across the board: just 73,000 jobs added vs. expectations of ~110,000, and May/June revisions that cut 258,000 jobs combined. Unemployment ticked up to 4.2%, with labor participation falling further.
The fallout was immediate: markets sharply increased the odds of a September Fed rate cut:
According to CME FedWatch, cut odds jumped from 63.3% to 75.5%, then to about 88.2%, although Powell’s hawkish remarks later pulled them back somewhat. Inflation, however, remains above the Fed’s 2% target—with headline PCE at 2.6% and core PCE at 2.8% in June—temper market enthusiasm for a cut.
At the most recent FOMC meeting, the Fed opted to hold rates at 4.25–4.50% for the fifth consecutive time. Chair Jerome Powell asserted the labor market was “broadly in balance”, but reiterated that persistent inflation and tariffs remain risks. These comments were interpreted as relatively hawkish—a stance that reduced cut odds temporarily.
Still, the economic slowdown has emboldened voices like Atlanta Fed President Rafael Bostic and dissenter Christopher Waller, who support earlier easing, arguing the labor market impact is mounting.
Trump continues to intensify pressure on Powell, calling him “too late” on rate cuts and firing criticism at the Fed’s approach.
With the vacant seat, and several others looming in the next two years (including Powell’s chairmanship in May 2026), Trump may swiftly shape the Fed’s leadership. He has already narrowed his list of potential Fed chairs to four, including Kevin Hassett and Kevin Warsh, both aligned with his earlier economic views.
Politico reports suggest Trump will avoid nominating Treasury Secretary Scott Bessent as Fed chair, favoring loyalists instead.
Financial analysts caution: while Trump may not remove Powell mid-term, he could appoint a new governor now and a new chair later—creating a slow-motion shift at the institution’s helm.
While markets rejoice at rate cut possibilities, economists warn premature easing could undermine inflation control. Bank of America and Morgan Stanley maintain that the Fed may stay on hold until 2026, pointing to strong labor metrics, rebounding consumer spending, and structural inflation risks tied to tariffs and demographics.
Meanwhile, President Trump’s dismissal of the Bureau of Labor Statistics director, accused of manipulating data without evidence, has further spooked investors about the integrity of economic reporting—a move criticized for politicizing critical statistical institutions.
Market Expectations: Futures markets have priced in nearly a 90% chance of a 25 bps cut in September, with the potential for additional reductions totaling 60 bps by year-end.
Monetary Independence at Risk: Trump’s ability to appoint new governors—including a future Chair—raises concerns about political influence over the Fed.
Economic Impact: Rate cuts would ease borrowing costs, boost equities (especially tech and growth stocks), and potentially weaken the dollar.
Long-Term Policy Direction: A Trump-aligned Fed could steer toward looser monetary policy—even in the face of inflation risks.
A rare vacancy on the Fed board—coupled with surging rate cut expectations—has given President Trump an opening to reshape U.S. monetary policy. With chairmanship up for grabs in 2026 and growing investor pressure for interest rate relief, the Fed sits at a crossroads. Under a second Trump administration, the institution that long stood aloof from politics may find itself aligned firmly with a new partisan economic agenda.
August 5, 2025
Trump has decided against selecting Scott Bessent to lead the Federal Reserve
WASHINGTON, D.C. — In a move with deep implications for U.S. monetary policy and global financial markets, President Donald J. Trump announced on Tuesday that he has officially ruled out Treasury Secretary Scott Bessent as a contender for the next Federal Reserve chair, narrowing the shortlist to four candidates. Among the top names are Trump economic adviser Kevin Hassett, former Fed Governor Kevin Warsh, and two other unnamed individuals—one widely believed to be current Fed Governor Christopher Waller.
The decision coincides with the early resignation of Fed Governor Adriana Kugler, a Biden appointee, which Trump called a “pleasant surprise.” Kugler’s exit provides Trump an immediate opening to install a political and economic ally onto the Fed’s Board of Governors, an opportunity he appears eager to seize ahead of a critical rate decision by the central bank next month.
Kugler announced she would step down by Friday, cutting her term short to return to academia at Georgetown University. Her departure gives Trump not only an opportunity to shape the near-term direction of Fed policy but also the chance to potentially elevate her short-term replacement into the top job at the Federal Reserve once Chair Jerome Powell’s term ends in May 2026.
In an interview with CNBC earlier Tuesday, Trump hinted at using the vacancy to install someone who could both serve the remainder of Kugler’s term and become Powell’s successor—effectively giving his pick months of influence over monetary policy before facing full Senate confirmation for the 14-year term.
“A lot of people say, when you do that, why don’t you just pick the person who is going to head up the Fed?” Trump said. “That’s a possibility too.”
The exclusion of Scott Bessent, the current Treasury Secretary and a prominent market figure, narrows Trump’s Fed chair options. Trump said Bessent preferred to remain at Treasury, removing himself from contention.
Trump now appears focused on a smaller circle of candidates with strong ideological alignment and past affiliations with his administration. Kevin Hassett, former chairman of the Council of Economic Advisers, and Kevin Warsh, a former Fed governor and consistent Fed critic, are now considered leading contenders.
Economists see this narrowing as an attempt to cement Trump’s influence over the Fed and steer it toward a more dovish monetary stance—particularly as he continues to criticize Chair Powell for not cutting interest rates since Trump returned to office in January.
Investors are already anticipating a rate cut at the next Federal Open Market Committee (FOMC) meeting on September 17, especially after last week’s disappointing July jobs report. According to the CME FedWatch Tool, the probability of a 25-basis-point cut has surged to 90.4%, up dramatically from 63.3% just a week ago.
The July nonfarm payroll report, released last Friday, showed only 73,000 jobs added, far below the 110,000 estimated by economists surveyed by LSEG. In addition, downward revisions of 258,000 jobs across May and June further confirmed a weakening labor market.
While Powell has remained cautious, citing inflation still above the 2% target, market participants now view a rate cut as all but inevitable—especially with the political pressure intensifying from the White House.
Trump’s dismissal of Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer—reportedly over dissatisfaction with job numbers—has added fuel to concerns about politicization of U.S. data institutions. The firing, which came the same day as Kugler’s resignation, has drawn sharp criticism from economists and policy observers who warn of a deterioration in the credibility of official economic data.
Michael Strain of the conservative American Enterprise Institute warned:
“If you appoint somebody perceived to be a lackey as the Fed chair, take the BLS freakout and multiply it by 1,000.”
Indeed, skepticism about Trump’s intentions has only grown with his pattern of clashing with Powell, his handpicked Fed chair during his first term, whom he later turned against for not being more aggressive on rate cuts.
The Federal Reserve has held interest rates steady at 4.25%–4.50% through five meetings this year, despite growing evidence of a cooling economy. Inflation, measured by the Fed’s preferred Personal Consumption Expenditures (PCE) index, rose to 2.6% in June, with core PCE (excluding food and energy) increasing to 2.8%, casting doubts on how quickly the Fed could pivot to an easing stance.
But the weak jobs data appears to have tipped the scales in favor of a September cut. Fed Governor Christopher Waller, reportedly among the top four Fed chair candidates, dissented in the July policy vote, arguing that the inflation risks from Trump’s tariffs were “modest,” and that rate cuts should begin sooner due to broader economic softening.
By selecting Kugler’s interim replacement now—possibly someone who would later be nominated as chair—Trump gains a chance to “test-drive” his preferred monetary policy approach, influencing Fed decision-making in the run-up to the 2026 election cycle. However, any permanent appointment would require Senate confirmation, a process that could become contentious, especially if Democrats regain control of the chamber.
James Fishback, CEO of Azoria investment firm and former advisor in the Department of Government Efficiency (DOGE), is reportedly among those who have expressed interest in a temporary Fed appointment. While the White House has not confirmed his candidacy, sources indicate materials were requested from Fishback earlier this week.
With Trump once again reshaping America’s most influential economic institution, Wall Street and central bankers worldwide are watching closely. The combination of leadership reshuffling, data skepticism, and intensifying political pressure is turning the usually sober world of monetary policy into high-stakes drama.
Whether the eventual nominee is Hassett, Warsh, Waller—or another surprise pick—Trump appears poised to install a Fed chair more aligned with his aggressive pro-growth, low-interest-rate vision. What that means for inflation, employment, and economic stability remains uncertain.
But one thing is clear: the independence of the Federal Reserve—long seen as a cornerstone of U.S. economic credibility—is facing its most serious test in decades.
August 5, 2025
The Federal Reserve holds interest rates stable, resisting pressure from Trump, and offers no indication of a rate cut in September
WASHINGTON – The U.S. central bank held interest rates steady on Wednesday and Federal Reserve Chair Jerome Powell’s comments after the decision undercut confidence that borrowing costs would begin to fall in September, possibly stoking the ire of President Donald Trump who has demanded immediate and steep rate relief.
Powell said the Fed is focused on controlling inflation – not on government borrowing or home mortgage costs that Trump wants lowered – and added that the risk of rising price pressures from the administration’s trade and other policies remains too high for the central bank to begin loosening its “modestly restrictive” grip on the economy until more information is collected.
While there will be two full months of data before the Fed’s September 16-17 meeting, Powell said the central bank was still in the early stages of understanding how Trump’s rewrite of import taxes and other policy changes will unfold in terms of inflation, jobs and economic growth.
“You have to think of this as still quite early days,” Powell said in a press conference after the release of the Fed’s latest policy statement. “There’s quite a lot of data coming in before the next meeting. Will it be dispositive? … It is really hard to say.”
Stock Widget
Those comments, and others that placed the burden on upcoming data to convince policymakers that lower rates were warranted, led investors to reduce the probability of a rate cut in September to less than 50%, after entering this week’s two-day Fed meeting at nearly 70%. Treasury yields rose while the S&P 500 .SPX -0.15% ▼ and Dow Jones Industrial Average .DJI -0.08% ▼ equities indexes closed marginally lower.

Powell “made clear that he thinks the Fed has room to hold the fed funds rate steady for a period of time and wait and see how much tariffs affect inflation,” said Bill Adams, chief economist at Comerica Bank, projecting that the central bank won’t cut rates until its last meeting of the year in December.
“If the unemployment rate holds steady and tariffs push up inflation, it will be hard to justify a rate cut in the next few months.”
The latest policy decision was made by a 9-2 vote, what passes for a split outcome at the consensus-driven central bank, with two Fed governors dissenting for the first time in more than 30 years.
Trump has given Powell the pejorative nickname “Too Late” for his refusal to cut rates, but the Fed chief on Wednesday said his hope was to be right on time when the decision is made to lower borrowing costs, neither moving so soon that inflation reemerges, or waiting so long that the job market slides and the unemployment rate rises. Indeed, Powell said the fact that the Fed isn’t discussing rate hikes could be seen as a willingness to overlook some of the expected impact of tariffs.
“If you move too soon, you wind up not getting inflation all the way fixed … That’s inefficient,” Powell told reporters. “If you move too late, you might do unnecessary damage to the labor market … In the end, there should be no doubt that we will do what we need to do to keep inflation controlled. Ideally, we do it efficiently.”
The data since the Fed’s June 17-18 meeting has given policymakers little reason to shift from the “wait-and-see” approach they have taken on interest rates since Trump’s January 20 inauguration raised the possibility that new import tariffs and other policy shifts could put upward pressure on prices.
Inflation is about half a percentage point above the Fed’s 2% target and has shown signs of increasing as prices of some heavily imported goods begin to rise, a process Powell said is expected to continue. As of June, Fed policymakers at the median expected inflation to rise further and end the year at about 3%.
New inflation data for June will be released on Thursday, and a key jobs report for the month of July will follow on Friday, part of the data Powell said policymakers will evaluate as they debate a possible rate cut in September.
Earlier on Wednesday, the U.S. government reported that economic growth rebounded more than expected in the second quarter, but declining imports accounted for the bulk of the improvement and domestic demand rose at its slowest pace in 2-1/2 years.
A line chart showing the benchmark interest rate set by the Federal Open Market Committee
‘THOUGHTFULLY ARGUED’
Along with Powell’s comments, the Fed’s new policy statement also gave little hint that rates were likely to fall soon, particularly with an unemployment rate that has stabilized around 4% as weaker hiring trends are offset by slowing growth in the labor force due to Trump’s immigration policies.
“The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated,” the central bank said after voting to keep its benchmark overnight interest rate steady in the 4.25%-4.50% range for the fifth consecutive meeting.
The two dissents came from Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, who has been mentioned as a possible nominee to replace Powell when the Fed chief’s term expires next May. Bowman and Waller, both appointed to the board by Trump, “preferred to lower the target range for the federal funds rate by one quarter of a percentage point at this meeting,” the Fed’s policy statement said.
Powell characterized their opposition to the policy decision as part of a debate that was “argued, very thoughtfully … all around the table,” but with a majority of policymakers still reluctant to cut rates without more inflation data in hand.
A bipartisan figure who was appointed to the Fed’s board by former President Barack Obama and later promoted to the top job by Trump, Powell voted to hold rates steady, as did three other governors and the five Fed regional bank presidents who currently hold a vote on the FOMC. The Fed’s regional bank presidents are hired by local boards of directors who oversee the Fed’s 12 regional institutions.
Governor Adriana Kugler was absent and did not vote.
Dissenting members of the FOMC often release statements explaining their vote on the Friday following Fed meetings.
July 31, 2025
Federal Reserve Holds Rates Steady; Two Officials Dissent, Preferring a Cut
President Trump with Jerome Powell after nominating him as chair in 2017. © Drew Angerer/Getty Images North America
WASHINGTON, D.C. — The Federal Reserve held interest rates steady Wednesday for the fifth consecutive meeting, but signs of growing division within the central bank emerged as two officials dissented in favor of a rate cut, underscoring increasing uncertainty over the path forward amid rising geopolitical tensions and trade policy concerns.
The Federal Open Market Committee (FOMC) maintained its benchmark federal funds rate at a range of 5.25% to 5.50%, the highest level in over two decades. But for the first time in over a year, the vote was not unanimous: Dallas Fed President Lori Logan and Chicago Fed President Austan Goolsbee broke ranks, citing growing risks from weakening consumer demand and escalating tariffs on Chinese and European imports.
“The labor market remains strong and inflation has eased notably,” the Fed said in its statement. “However, the Committee remains highly attentive to inflation risks.” Yet the statement notably softened language about future tightening, opening the door to potential rate cuts if economic conditions deteriorate.
The dual dissents highlight what analysts are calling a “fraying consensus” inside the Fed, as policymakers weigh competing risks: on one hand, stubborn core inflation that has remained above the Fed’s 2% target, and on the other, a slowing economy compounded by new import tariffs that could dampen spending and business investment.
“These are not just marginal disagreements,” said Dana Peterson, chief economist at The Conference Board. “This is a fundamental debate over how much tariffs will drive inflation versus how much they will hurt growth. The balance is tricky.”
In recent weeks, the Biden administration has rolled out a fresh wave of trade penalties on strategic imports from China—particularly in EVs, solar panels, and critical minerals—and hinted at potential levies on select European goods. While designed to bolster domestic industry, the tariffs are expected to raise input costs for manufacturers and consumers.
Data released earlier this month showed that second-quarter GDP grew at a modest annualized rate of 1.2%, a deceleration from the 1.9% seen in Q1. Meanwhile, the Fed’s preferred inflation measure—the core personal consumption expenditures (PCE) index—was flat in June, holding at 2.8% year-over-year.
Although inflation has cooled significantly from its 2022 peak, officials remain divided over whether it has moderated enough to justify rate reductions. “The Fed is walking a tightrope,” said Sarah House, a senior economist at Wells Fargo. “They want to support growth, but they don’t want to repeat the mistakes of the 1970s by cutting too soon.”
Chair Jerome Powell, speaking at a press conference following the decision, emphasized that the Fed remains data-dependent but acknowledged that the case for rate cuts is growing stronger.
“If we see more evidence that inflation is moving sustainably toward 2%, and if labor market conditions continue to evolve gradually, then a policy adjustment would be appropriate,” Powell said. “But we are not there yet.”
Markets React with Caution
Federal Funds Rate Chart
Federal-funds rate target

Note: Chart shows midpoint of target range since 2008.
Line chart showing Federal funds rate target from 2000 to 2025, ranging from 0% to 7%.

Financial markets responded cautiously to the decision. The S&P 500 closed flat, while the yield on the 10-year Treasury note dipped slightly to 4.21%. Futures markets now see a 52% chance of a rate cut at the Fed’s September meeting, up from 38% last week, according to CME FedWatch data.
Investors remain on edge over the policy outlook, with many anticipating at least one rate cut before the end of the year. But the Fed’s internal disagreements signal a more complex road ahead.
“The Fed is no longer speaking with one voice,” said Julia Coronado, a former Fed economist now at MacroPolicy Perspectives. “This is the beginning of a broader debate—not just on rates, but on how the Fed should respond to trade-driven inflation and a more fractured global economy.”
All eyes now turn to the Fed’s Jackson Hole symposium in late August, where Powell is expected to outline the central bank’s evolving approach. Analysts expect the Chair to strike a balanced tone, reaffirming inflation vigilance while acknowledging the shifting economic landscape.
“Powell will try to bring the committee back toward a unified message,” said Coronado. “But that’s harder to do when growth is slowing, inflation is sticky, and trade tensions are rising.”
As the Fed grapples with its next steps, one thing is clear: The era of near-lockstep policymaking may be giving way to a period of internal debate—and a less predictable path ahead for rates, markets, and the U.S. economy.
July 30, 2025
Why the Federal Reserve’s Building Renovation Is Costing $2.5 Billion
Allies of President Donald Trump are pressing for an investigation into the ongoing restoration of the Federal Reserve’s headquarters, costs for which have ballooned to $2.5 billion.
Any evidence of mismanagement or fraud, as White House officials have suggested, could prove a useful pretext for removing Fed Chair Jerome Powell, whose resistance to cutting interest rates this year has angered the president.
But the price tag has less to do with “ostentatious” features than the challenges of building — particularly underground — in what was once a swamp near the Tidal Basin along the Potomac River.
Foundation work for the Fed expansion was so difficult that contractors responsible for the job received a 2025 award for “excellence in the face of adversity” from the Washington Building Congress, a building trades association.
The Washington Monument behind construction on the Federal Reserve Board East Building, formerly known as the US Public Health Service building. (Al Drago/Bloomberg)
The ongoing renovation and expansion of the historic 1937 building that houses the Fed, plus an adjacent 1931 federal building, has faced setbacks, with costs for the long-overdue rehab climbing more than 30% since 2023.
Officials from the Trump administration blame wasteful spending for the cost overruns. In a July 10 letter to Powell, Office of Management and Budget Director Russell Vought described the project as an “ostentatious overhaul” featuring “rooftop terrace gardens,” “VIP dining rooms and elevators” and other luxury amenities. Federal Housing Finance Agency Director Bill Pulte, a frequent Powell critic, said he’s confident Congress will open an investigation.
Powell has defended the renovation work as transparent. He responded to Vought’s claims in a letter on July 17, explaining that the gardens are merely green roofs, for example, and the elevator is being extended to accommodate disabled users.
The project was always going to be tricky, with initial cost estimates pinned at $1.9 billion. Construction on the Marriner S. Eccles Federal Reserve Board Building and the adjacent Federal Reserve East Building involves adding new office space, removing asbestos and lead and replacing antiquated mechanical systems. Neither the Eccles Building — an austere edifice designed by Paul Cret and dedicated by Franklin D. Roosevelt — nor the East Building has ever been fully renovated since they were built nearly a century ago.
A worker at the reconstruction site of Federal Reserve headquarters in Washington, where estimated costs have gone from $1.9 billion to $2.5 billion. (Samuel Corum/Bloomberg)
Some of the bigger cost factors for the Fed are largely invisible. The price of structural steel exploded in 2021, just before construction began. Any building project in Washington’s so-called monumental core is covered by a bevy of design oversight boards, which can, and did, slow down the work. And the renovation of structures built during the New Deal has to account for federal security standards adopted after the Sept. 11, 2001, terrorist attacks.
The most challenging parts of the renovation, however, are underground.
Parts of the job call for deep excavation. Expanding the Fed’s campus involves converting a parking garage underneath the Eccles Building into additional office space. A five-story addition on the north side of the Fed’s East Building also boasts four extra floors below grade — a common trick in Washington, where heights are capped and historic vistas are protected. Below the south lawn of the East Building, a 318-space parking garage is being added. According to an FAQ put out by the Fed, the water table was higher underground than builders had predicted.
Building a new basement below an existing structure is a huge undertaking. Berkel and Company Contractors, a specialty foundation contractor, had to physically lower the slab on which the building stands, supporting the structure while excavating the ground beneath it. The company declined to comment, but a video posted on YouTube explains that Berkel built a bracing system above the slab in order to demolish it and lower the basement level more than 20 feet. The work required 1,000 micropiles — deep foundation steel elements used in ground conditions that don’t allow for traditional piles.
The Federal Reserve Board Building, designed by Paul Philippe Cret, in Washington circa 1935. (Keystone View Company/FPG/Getty Images)
Excavating underneath historic structures is expensive work. A proposal to shore up the Smithsonian Institution’s 19th-century Castle against seismic rumbling with an expansion below ground totaled $2 billion before the plans were shelved. Building along the National Mall is tough as well. Much of the land didn’t exist a century ago.
As landscape architect Phia Sennett wrote on the website of the National Trust for Historic Preservation, the Tidal Basin and surrounding area were filled from sediment dredged from the Potomac River and built over a series of creeks. To complete the Smithsonian’s National Museum of African American History and Culture — more than 60% of which is below grade on the National Mall — architects had to design an enormous “bathtub” to keep the water table out.
Construction costs for that building, which opened in 2016, reached $540 million, 50% more than an initial estimate. The price tag for the National September 11 Memorial and Museum, another project with daunting underground requirements and multiple stakeholders, rose to $1 billion before construction was halted in 2011. Its final costs were reported at $700 million.
In testimony before Congress in June, Powell acknowledged the project was a daunting one.
“No one in office wants to do a major renovation of a historic building during their term in office,” he said. “We decided to take it on because, honestly, when I was the administrative governor, before I became chair, I came to understand how badly the Eccles Building really needed a serious renovation. It never had one. It was not really safe and it was not waterproof.”
An artist’s rendering of the completed Federal Reserve buildings is shown on barriers along Constitution Avenue in Washington. (Al Drago/Bloomberg)
The Fed renovation is being performed by Fortus, a joint venture between the Dutch design consultancy Arcadis and the Washington, DC–based architecture firm Quinn Evans. Arcadis specializes in engineering and resilience, including water infrastructure. Quinn Evans has led complex restoration jobs, among them Michigan Central Station in Detroit and the National Academy of Sciences headquarters. Both firms referred a reporter from Bloomberg to the Fed, which didn’t respond to a request for comment.
Design plans for the Eccles Building changed significantly since they were first introduced. During the first Trump administration, architects at the request of the Fed proposed using more glass, but Trump appointees to the US Commission of Fine Arts asked for more white marble to align with a proposed mandate from the president requiring all new federal buildings to be classical in style. The demand to use more marble was first reported by the Associated Press.
During a 2021 review by the National Capital Planning Commission, a General Services Administration official said that the Fed had withstood a “tumultuous” oversight process.
“They’ve been really put through their paces,” Mina Wright, founding director of the GSA’s Office of Planning and Design Quality, said at the time. “They’ve had some hostile criticism at one point that was unjustified.”
July 19, 2025