#federal-reserve

#federal-reserve

Despite mounting concerns over a weakening labour market and tariff-related costs, investors have embraced what is described on Wall Street Journal as a "run it hot" trade, betting that rate cuts and tax stimulus will generate a new wave of economic growth and corporate earnings. This optimism has pushed benchmarks, speculative tech names, meme stocks, and even alternative assets like gold to fresh highs.

As expected, inflation ticked slightly higher during August with rising housing, food and energy costs leading the way. Core inflation however remained stable, ensuring a rate cut in September is now a forgone conclusion. The Federal reserve having been in wait and see mode since December 2024 has been given the green light today to cut rates. Inflation has not seen large upside surprises from tariff turmoil and with recent revisions to jobs data showing almost 1 million fewer jobs than previously thought,

U.S. producer prices unexpectedly fell in August amid a compression in trade services margins and mild increase in the cost of goods, suggesting that domestic businesses were probably absorbing some of the tariffs on imports. The lack of strong producer price pressures, despite import duties, could also be signaling softening domestic demand against the backdrop of a struggling labor market. The Federal Reserve is expected to cut interest rates next Wednesday, with a quarter-percentage-point reduction fully priced in, after pausing its easing cycle in January because of uncertainty over the impact of President Donald Trump's sweeping tariffs.

Global shares mostly rose Wednesday, echoing record rallies on Wall Street after the latest update on the job market bolstered hopes the U.S. Federal Reserve will cut interest rates.France's CAC 40 rose 0.8 in early trading to 7,809.80. Germany's DAX edged up 0.6% to 23,856.74. Britain's FTSE 100 rose 0.2% to 9,263.14. U.S. shares were set to be mixed with Dow futures down 0.1% at 45,700.00, while S&P 500 futures gained 0.3% at 6,537.75.

The best reading of the for cause' provision is that the bases for removal of a member of the Board of Governors are limited to grounds concerning a Governor's behavior in office and whether they have been faithfully and effectively executing their statutory duties, Cobb wrote. Trump has accused Cook of committing mortgage fraud by signing documents in 2021 that listed more than one property as her permanent residence.

Federal District Judge Jia Cobb granted Cook a preliminary injunction, finding that the president's effort to remove Cook likely violated the Federal Reserve Act. Under that law, designed to insulate the central bank from political interference, Fed governors can only be removed "for cause." Judge Cobb found that in order to warrant firing, the cause would likely be limited to bad conduct while in office.

Donald Trump's renewed anger at Jerome Powell over delayed interest-rate cuts has intensified after a dramatic revision cut U.S. job growth by 911,000 since 2024-adding fuel to Trump's criticism of the Fed and amplifying political strife ahead of the Federal Reserve's September meeting. For months, Trump has been vocal in his frustration with Federal Reserve chair Jerome Powell for being "too late" to cut rates, and he just got fresh ammunition in the latest jobs report data revision.

The move is a chilling escalation of Trump's weaponization of the DOJ against perceived political opponents. It's also part of an obvious and long-standing effort to gain control of the Fed. Like the politicization of law enforcement, seizing power over the central bank is a power grab straight out of the authoritarian playbook, and one with predictable, ugly outcomes for America's economy and democracy.