federal reserve

'Just a cheap shot': Fed chair tells colleagues to ignore Trump's attacks

Federal Reserve chairman Jerome Powell – who President Donald Trump appointed to his post during his first term – recently revealed what he tells his colleagues when it comes to the president's constant threats: "Don't engage."

The Daily Beast reported Tuesday on Powell's attitude toward the administration, which he delivered during an event at the Greater Providence Chamber of Commerce Rhode Island. The head of the nation's central bank said that he made sure his fellow Fed governors dismissed any political attempts to influence their work, and to simply stick to their job of managing monetary policy.

“We don’t engage,” Powell said. “We don’t, you know — our argument is [we're] doing our jobs. We don’t get into back and forth with external people. We just do our jobs. We keep our heads down and do our jobs. That’s what we do.”

“We’re based in Washington, D.C., and many, many people you know — Congress, and you know — there are often things seen through a lens of, ‘Is it good for this party or bad, or bad for this party or this politician?” he continued. “We’re just not looking at things that way. We’re looking at what’s the best thing for the people that we serve in the immediate term, what’s the best policy?”

“And no one, many people don’t believe us because they go, ‘Come on, come on, you’re really political,’ but the truth is, mostly people who are calling us political, it’s just a cheap shot," he added.

The Fed chair's remarks come on the heels of its meeting earlier this month, in which the Fed announced it was slightly reducing interest rates by a quarter of a percentage point. Powell insisted that the rate cut was made not because of Trump's persistent requests to cut rates, but simply because the economy needed stimulation after a year of lackadaisical growth, persistent inflation and an unemployment rate on the rise.

Powell has refused on multiple occasions to resign from his position as Fed chair, which expires in May of 2026. His position on the Federal Reserve Board of Governors is slated to end on January 31, 2028. Trump has already appointed one member of the board this term, with former Council of Economic Advisors chairman Stephen Miran being confirmed on a party-line vote just prior to the Fed's September meeting. He's expected to appoint a loyalist to the chair role after Powell's term ends next year.

Click here to read the Beast's full report (subscription required).

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'The economy's breaking': Economists say Fed cut interest rate to manage 'risk' of Trump

After the Federal Reserve announced a slight reduction in the interest rate, several prominent economists observed that the nation's central bank was making noticeable moves in direct response to President Donald Trump's management of the economy.

Navy Federal chief economist Heather Long noted on Wednesday that the only dissenter against an interest rate cut was Stephen Miran — the Trump appointee who was confirmed by the Senate on a party-line vote just earlier this week. Miran's dissent was due to him wanting a rate cut of at least 50 basis points. Long analyzed each board member's vote and called it "wild" that Trump's newest appointee wanted the equivalent of "5 rate cuts by year-end."

"You can see the tension at the Fed in just 1 chart," Long tweeted. "It's likely we'll get 2 more cuts. One in October and one in December. But you can see the battles ahead."

The Fed typically cuts interest rates during an economic downturn in order to stimulate economic growth – and likewise keeps interest rates steady when the economy is more stable to prevent inflation from spiraling out of control. According to Long, the Fed's economic projection as Trump approaches the one-year mark of his second term next January is particularly dark: The Fed's board predicted that the unemployment rate would rise to roughly 4.5 percent, while inflation was projected to hit three percent. GDP growth was also expected to falter, cracking just 1.6 percent over the next quarter. Long referred to those projections as "stagflation-lite," which is a term economists use to describe an economy experiencing both a higher jobless rate and a higher inflation rate.

University of Michigan economics professor Justin Wolfers also highlighted the Fed's gloomy economic outlook, characterizing it as the board saying: "Stagflation is in the room."

"Fed statement tracker tells you what they're trying to say," Wolfers wrote in a subsequent post to his X account, quoting the Fed's assessment of higher unemployment and rising inflation. "That first paragraph represents a sharp downgrade in the Fed's confidence about our economic conditions."

Economics reporter and author Matthew C. Klein found Federal Reserve Chair Jerome Powell's summary of the rate cut as a "risk-management cut" illuminating, and posited that Trump's economy — so far defined by tariffs and mass deportations — may be the "risk" Powell was trying to manage. Political commentator Brian Allen had a similar interpretation of Powell's statement, opining that it seemed the Fed chair was warning that "the economy's breaking at both ends."

"That’s not just a recession. That’s stagflation. And it’s wearing a MAGA hat," Allen wrote. "This is the Trump economy."

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'Failure': Trump's latest controversial firing blocked by nation's second-highest court

In a closely watched case with major implications for the independence of the Federal Reserve, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled 2-1 on Monday to block President Donald Trump's attempt to remove Federal Reserve Board member Lisa Cook from her position.

The decision, which comes just months after Trump launched a legal and political campaign to reshape the Fed, keeps Cook in her seat — for now.

The majority opinion was authored by Judge Michelle Childs and joined by Judge Bradley Garcia, both of whom are appointees of former President Joe Biden.

READ MORE: 'He's not doing well': Psychologists say Trump showing telltale signs of 'early dementia'

The two concluded that the president lacked the authority to remove a sitting Fed governor without cause, citing statutory protections and the Fed’s critical role as an independent economic institution.

In a fiery dissent, Judge Gregory Katsas, a Trump appointee, argued that the president retains broad constitutional powers to remove executive officials and accused the majority of “shielding unelected bureaucrats from political accountability.”

The ruling is expected to be appealed to the U.S. Supreme Court, setting up what could be a landmark showdown over the limits of presidential power and the independence of central banking in the U.S. Cook — the first Black woman to serve on the Federal Reserve Board of Governors — was confirmed in 2022 and has been a key voice on monetary policy, financial inclusion and economic stability.

Her continued presence on the Board has drawn criticism from Trump-aligned officials, who claim she is too politically aligned with Democratic priorities.

Sen. Elizabeth Warren (D-Mass.) wrote on the social platform X: "The courts keep rejecting Donald Trump’s illegal attempt to take over the Fed so he can scapegoat away his failure to lower costs for American families. If the courts – including the Supreme Court – continue to uphold the law, Lisa Cook will keep her seat as a Fed Governor."

MSNBC contributor and former U.S. Attorney Joyce Vance wondered about a sudden intervention from the Supreme Court, writing: "This may be too quick even for the shadow docket. We shall see."

Politico columnist Victoria Guida noted: "President Donald Trump loses his appeal on firing Lisa Cook from the Fed just as one of his top advisers is on the brink of being confirmed to the central bank."

Financial analyst Logan Mohtashami commented that Cook "would advocate for a rate cut."

Washington Post journalist Andrew Ackerman wrote: "A divided DC appeals court said late Monday that Lisa Cook could remain in her Fed job while she fights Trump's attempt to fire her. The administration will almost certainly appeal to the Supreme Court..."

Former Treasury Department official Ashley Schapitl wrote: "Months ago I would have thought the chance SCOTUS ends Federal Reserve independence on the shadow docket was zero, but now? 50/50?"

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'A lot of mess coming': Michael Steele warns of economic chaos if Trump takes over Fed

On Monday, the U.S. Senate confirmed President Donald Trump's latest pick for the Federal Reserve, Stephen Miran, on a party-line vote., allowing him to participate in Tuesday's meeting in which the Fed will likely vote on whether to cut interest rates. MSNBC host Michael Steele lamented that the president is now one step closer to forcing the nation's central bank to submit to his will.

During an interview with former Department of Justice (DOJ) prosecutor Ankush Khardori, Steele argued that Trump's moves to cement control of the Fed were creating a "very troubling economic environment." He noted that when the executive branch was constantly colliding with the judicial branch over how much control a president can have over an independent institution like the Fed, "the American people are the ones who get caught in the middle."

"One of the things that's i'm fascinated about is what does this look like on the other side of tomorrow?" Steele said.

"The reality is, there's a lot of mess coming tomorrow, he continued. "And in some sense, this administration has – besides lying about that – have been hiding the ball from a lot of the American people and sort of telling them, 'oh, no, the economy is going to be great. Just let us get the power and the economy is going to be great.' But history has told us it's replete with examples where that's not the case."

Khardori responded to Steele's point by saying he felt particularly pessimistic about Trump's continued assault on the Fed's independence. He observed that while the Supreme Court has so far kept Trump's attempts to influence the Fed's board of governors, he has already made significant headway toward his goal of having loyalists in charge of monetary policy.

" Trump has already gotten a long way down the line of eliminating the independence of federal agencies. The Fed is just the last one that the Supreme Court has basically said, 'well, maybe this one might be special,'" Khardori said. "They didn't really give a very good reason, but they seem to understand politically that this would be a mess if they eliminated Fed independence entirely. So Trump has gotten a lot of what he wanted."

The Fed is expected to cut interest rates after tomorrow's meeting by 25 to 50 basis points. Even though Trump has been calling for rates to be lowered since the start of his second term, prominent economists have said that even a significant rate cut won't give the economy enough of a jolt to overcome the damage from Trump's tariffs and his mass deportations of undocumented immigrants whose labor fuels numerous critical economic sectors like agriculture, hospitality and healthcare.

- YouTube www.youtube.com

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'Significant and concerning': Economist explains why the Fed can't bail out Trump

After months of lower-than-expected job growth, President Donald Trump is likely hoping the Federal Reserve will fulfill his wish of a reduction in interest rates when the central bank meets later this month. But one former chairman of the Council of Economic Advisers (CEA) is cautioning the president against getting his hopes of any significant jolt to the economy.

In a Friday op-ed for the New York Times, Jason Furman — who chaired the CEA during former President Barack Obama's second term — said that if Trump wants to turn the U.S. economy around, the bulk of the action will have to come from the White House itself. He wrote that the recent months of lackluster job growth is a "significant and concerning" trend.

"Normally it would be more than sufficient reason for the Federal Reserve to slash interest rates in an effort to stave off what could even be the beginning of a recession," he wrote. "Unfortunately, these are not normal times, and while the Fed can help a little, it cannot do too much."

Furman wrote that job growth has fallen far below expectations, averaging approximately 29,000 new jobs per month whereas former President Joe Biden averaged roughly 82,000 new jobs per month between May and August of 2024. Additionally, Biden averaged 168,000 new jobs per month over the course of last year. He went on to argue that while the Fed can take limited steps to correct this at its September 16 meeting — Furman estimated a rate cut of 25 basis points — it can't fix the core issue.

"The biggest reason the Fed cannot solve the labor slowdown is that its tools can help spur labor demand by getting businesses to invest and hire more — but the labor problem is much more about labor supply," he wrote. "Specifically, it’s about a marked downshift in labor force growth because of reduced immigration."

According to the former CEA chair, American employers were able to fill a lot of open vacancies due to a steady influx of immigrants looking for work. Last year, for example, Ohio Governor Mike DeWine (R) lauded the Haitian migrants in Springfield, Ohio for effectively carrying the local economy on their backs by keeping companies open with their labor during the Covid-19 pandemic. But thanks to the administration's immigration policies, Furman wrote that the current American workforce is unable to supply enough labor for companies, leading to an inevitable slowdown and potential recession further into the future. He also cautioned that Trump's tariff regime is causing companies to be more cautious in making hiring decisions, adding to the ongoing economic malaise.

"There is no question the outlook has shifted and policy should shift with it: The Fed should cut rates at its next meeting. But the only person who can help ensure a meaningful increase in the pace of job creation without further inflation above target is President Trump. And all he needs to do is reverse his policies on immigration and tariffs," he wrote. "Until then, the Fed can just try to offset a small portion of the harm."

Click here to read Furman's full essay for the Times (subscription required).

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'Hypocrisy' of Trump's pick for high-profile role 'looks very bad': analysis

In an article for Bloomberg published Thursday, columnist Jonathan Levin argued that recent fiscal messaging and policy decisions amount to hypocrisy on the part of policymakers.

The columnist strongly criticized Stephen Miran, the Chair of the Council of Economic Advisers (CEA) under President Donald Trump, for his apparent flip‑flop. At his Senate confirmation hearing for a Fed governor seat in March, Miran’s message was, in effect, “Don’t hold me to my words.”

According to Levin, that alone should disqualify him.

Earlier, in a March 2024 essay, Miran had condemned the “revolving door” between the White House and the Federal Reserve, calling for an overhaul of that system and criticizing how technocratic Fed leadership had been replaced with “highly political” personnel moving freely between the executive branch and the central bank.

Yet now, as Trump’s nominee to the Fed Board, Miran seeks exactly the path he previously denounced, walking through that revolving door and joining the institution he once argued needed reform.

Levin noted that this irony makes Miran “among the most egregious examples of what he criticized.”

Levin also called out policymakers who preach fiscal discipline yet support major initiatives without transparent budgeting. “It’s hypocrisy to preach balanced budgets one moment, then rubber‑stamp multitrillion‑dollar plans with zero price‑tag attached the next," he wrote.

Levin described the disconnect between politicians’ pledges and their actions, noting that speeches on cutbacks are often followed by unveiled spending. He warned this gap erodes public trust and could weaken long-term financial discipline.

The author reframed hypocrisy not as mere political spin, but as a threat to governance and credibility, saying that must be addressed if fiscal integrity is to be preserved.

"More recently, the president has been attempting to fire Governor Lisa Cook. If he succeeds in that, replacing Cook along with the Miran nomination would give Trump picks four of the seven slots on the Board of Governors. (Five if you include Powell himself, a 2018 pick by the president — though their supposed falling out is a whole other story.) Even under the most optimistic of interpretations, this all looks very bad, and appearances matter," he said.

"Miran now claims that his proposals were a 'package deal' that couldn’t be pulled apart as they sought to strike a very delicate balance. That sounds like a convenient excuse for hypocrisy," Levin added.

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'He won't like the results': Krugman explains how Trump's Fed takeover will backfire

President Donald Trump continues to angrily attack U.S. Federal Reserve Chairman Jerome Powell and Fed Gov. Lisa Cook (who he wants to fire) over interest rates, which he insists are much too high. Trump would like to see the Fed lower interest rates a full three percent — a move that many economists, including Paul Krugman, believe would be terrible for the economy.

Interest rate cuts, economists say, are a tool to be used during a recession — and the United States isn't in a recession.

In a September 4 column for his Substack page, Krugman explains why Trump's economic policies — including tariffs and attacking the Fed's independence — could ultimately lead to the very thing he bitterly opposes: Higher interest rates.

"If Trump does succeed in firing Cook, it would be a step on the road toward a fully Trumpified monetary policy," Krugman explains. "What would happen if Trump gained control of the Fed? He would be able to push through large cuts in the Federal funds rate, the short-term interest rate on overnight loans banks make to each other. And I mean large: he's been talking 300 basis points. We have, in the past, seen rate cuts that big, but only in the face of serious recessions. Trump, however, insists that the U.S. economy is booming, and a cut that big in the absence of a recession — and with inflation both above target and set to rise due to tariffs, deportations and surging electricity prices — would be unprecedented."

The former New York Times columnist continues, "Standard economics says that a big Fed funds rate cut in the absence of a severe economic slump would be inflationary. It would also damage the Fed's credibility — investors' belief that it will do what is necessary to fight future inflation. Eventually, however, inflation would force even a Trumpified Fed to raise rates."

If Trump does succeed in destroying the Fed's independence, Krugman notes, "short-term interest rates" would fall, but the "Trumpification of the Federal Reserve," he says, would make "long-term rates" much higher.

"Whatever he's thinking," the liberal economist writes, "if he succeeds in trashing the Fed's independence, he won't like the results. He might succeed in pushing short-term rates down for a while. But the interest rates that really matter to people's lives are long-term — like mortgage rates. And Trumpifying the Fed, thereby destroying its credibility, will send long-term rates higher — maybe much higher. MAGA!"

Paul Krugman's full SubStack article is available at this link.

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'Can't fire her': GOP senator doubts Trump has legal authority to remove key official

President Donald Trump is moving full steam ahead with his plans to replace Federal Reserve board member Lisa Cook with his own hand-picked candidate. But at least one Senate Republican is now publicly doubting his ability to do so.

Semafor reported Tuesday that Sen. Lisa Murkowski (R-Alaska) is openly questioning whether the Senate even has the ability to fill a supposed vacancy on the Fed's board of governors since Cook's firing is currently being challenged in court. Murkowski suggested to the outlet that Fed board appointee Stephen Miran — who is currently serving as the chairman of the White House's Council of Economic Advisers – may not be able to fill the seat even if he's confirmed by the full Senate.

"The president needs to respect [the courts]. But he’s willing to push it," the Alaska Republican said. "I don’t know that you can say there’s a vacancy yet, if she has said, 'I’m not stepping down, I’m not resigning.' And he can’t fire her without cause and the court needs to determine whether there’s cause. I don’t know if there’s a vacancy."

Murkowski's point is valid, as Cook has sued the Trump administration over his attempt to fire her late last month. The Federal Reserve Act of 1913 stipulates that a Fed member can't be fired without "cause," and Trump argued that the criminal referral to the Department of Justice by housing regulator Bill Pulte over questions surrounding Cook's mortgage records justified her removal.

However, Cook — who has said that her listing two primary residences on mortgage applications was a "clerical error" — has het to even be charged with a crime, let alone convicted. She has also insisted that she isn't resigning from her role and will continue to serve on the Fed's board for the foreseeable future, with her term not expiring until 2038.

Semafor's Eleanor Mueller and Burgess Everett reported that Cook's legal challenge could take "months," which would complicate the Senate's effort to have Miran confirmed ahead of the Fed's September meeting. And in addition to Murkowski, Sen. John Neely Kennedy (R-La.) also expressed hesitation about the process, and the impact Cook's attempted firing could have on the independence of the central bank.

"I don’t believe in having a Federal Reserve that acts on political considerations," Kennedy said. "I believe the Federal Reserve should be independent — and as evidence of that, I give you Turkey."

Click here to read the full article in Semafor.

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'Just doesn't work': MAGA investor warns of dire consequences if Trump takes over Fed

President Donald Trump's constant demand for the Federal Reserve to lower interest rates — which escalated with this week's attempted firing of Fed member Lisa Cook – won't bode well for the economy at large, according to one Trump-friendly investor.

The Hill reported Thursday that "Shark Tank" co-host Kevin O'Leary, who has called Trump's table at Mar-a-Lago "the center of the universe" and has posed for photos with Trump, is coming out hard against the president's plan to control the nation's central bank. O'Leary said that "hyperinflation" was a likely scenario if Trump strong-armed the Fed into lowering interest rates before the economy was capable of handling the change.

"The reason we don’t have hyperinflation like Venezuela is we have a Fed," O'Leary told Fox Business on Thursday. "If you allow the ‘el presidente’ to set interest rates, you end up with bread costing $1,000 more every day."

"And that’s what happens in Venezuela," he continued. "So ... the idea that you have the executive deciding monetary policy, that just doesn’t work."

Traditionally, the Fed only lowers interest rates in times of severe economic stress. During the height of the Covid-19 pandemic, Fed chair Jerome Powell lowered rates to zero percent and kept them there as a means of stimulating the economy as much as possible during a period of high unemployment and a decimated global supply chain. But once inflation spiked globally in response to the pandemic, the Fed raised interest rates to offset the overheating economy.

Powell has signaled recently that a slight interest rate cut may be coming soon due to a tougher labor market, but indicated that the rate cut would be small in order to prevent inflation from spiraling out of control. Powell hasn't referenced pressure from Trump due to his decision, but rather the widespread economic uncertainty (partially due to Trump's tariffs) that has led to a rise in inflation.

Cook has sued Trump over her attempted firing, which the president has justified by accusing her of committing mortgage fraud. However, Cook has not been charged with a crime and said that the issue pertaining to her mortgage documents was attributed to a "clerical error."

Click here to read the Hill's report in full.

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'Man up!' Michael Steele rips Fed chair for not defending board member Trump is targeting

On Thursday, Lisa Cook – a member of the Federal Reserve board of governors — officially sued President Donald Trump over his attempt to remove her from her job. And former Republican National Committee chairman Michael Steele is wondering why the leader of the nation's central bank has so far kept quiet.

Before interviewing Nobel Prize-winning economist Paul Krugman on his MSNBC show "The Weeknight," Steele tore into Fed chairman Jerome Powell for not defending his fellow Fed member. The Federal Reserve Act of 1913 stipulates that a president can only remove a Fed governor "for cause," and Steele asserted that Trump's stated cause of Cook allegedly committing mortgage fraud didn't hold water.

"We have been making this point since this story broke that the Fed chair, in my estimation, needs to step up —needs to man up — and stand with one of his governors who's under attack because he knows damn well what Donald Trump is up to," Steele said. "How do we know? How does he know? Because he's gone after Trump!"

Steele also lauded Krugman for stating on his Substack that the onus is on Powell to make Trump prove that Cook has committed an offense grave enough to be stripped of her Senate-confirmed role. And the MSNBC host asked Krugman to shed light on why Powell was showing such "reticence" and leaning on "bureaucratic BS speak" rather than plainly opposing Trump's actions.

"I would say that p=Powell is really falling down on the job here," Krugman said. "He needs to stand up and say, look, if you have a good, solid reason to for this, tell us ... If they had real evidence of malfeasance on Cook's part, where is it? We haven't seen a thing. All we have is allegations and and insinuations, and none of them are relevant to her job."

"You can fire a Fed governor for cause. Now, for cause that usually means something like, you're drinking on the job or you're embezzling from from the organization's funds," he continued. "Now, they're claiming — again, without any evidence — that she made some misstatements in transactions back when she was a professor at Michigan State. So this is, I really do think that Powell has failed at least phase one of the test."

Watch the full segment below, or by clicking this link.

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'Very dangerous': Law professor accuses Supreme Court of enabling Trump's war on the Fed

President Donald Trump is moving ahead with taking control of the Federal Reserve, and Columbia University Law School professor Lev Menand wrote in the Atlantic that the Supreme Court made it all possible.

Trump submitted a letter purporting to fire Fed board member Lisa Cook over unproven accusations of mortgage fraud in his bid to stack the board with loyalists. But Menand said the Supreme Court made fighting his dismissal difficult by tossing bedrock precedent and accepting broad assertions of presidential power.

“The Court has created the conditions for a very dangerous situation,” Menand said. “If the justices allow Trump’s removal of Cook to take effect, there will be little to stop him from driving other board members from their posts, and seizing power over the [nation’s] money supply.”

Trump already enjoys the benefit of practically no pushback from the Republican-controlled Congress, which leaves the Supreme Court as the only real barrier to total power. And while the court did recently carve out some exceptions to the wide authority it gave Trump to fire tenured officials in Trump v. Wilcox, the Court’s carve-out was not very helpful.

“Part of the problem is that it doesn’t make a lot of sense,” Menand said. “[The Fed] is legally equivalent to the other multimember commissions that Trump is attacking. Nor is it quasi-private; it is an ordinary government agency. Nor does it really seem to follow in the tradition of the Bank of the United States, which was a bank. The Federal Reserve Board is a bank regulator.”

In its haste to give Trump unprecedented new power, the Court also failed to specify if Trump could remove officials while litigation is ongoing. This gives Trump “an incentive to remove people even if the administration thinks the president may ultimately lose the case.”

And the administration is already putting that new power to the test, said Menand, targeting Fed governors and publicly airing alleged grounds for dismissal without “even an indictment.” Menand added that if the courts now permit Cook’s removal without Cook having an opportunity to contest the charges “we shouldn’t be surprised” if the president next attempts to remove Fed Chair Jerome Powell.

"Lisa Cook’s case is … about the rule of law and whether this is ‘an Empire of Laws, not of men,’” Menand said.

Read the full Atlantic report at this link.

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