Key Takeaways Research from the New York Fed shows Americans, not foreigners, are bearing the cost of tariffs.The Trump administration criticized the study, calling it partisan and questioning its methodology.The conflict highlights ongoing tensions over the Federal Reserve's independence from political influence. Get personalized, AI-powered answers built on 27+ years of trusted expertise. The latest battleground in the feud between the White House and the Federal Reserve system is a routine economi ...

Sen. Thom Tillis, R-N.C., on Thursday rejected a proposal aimed at ending the Department of Justice's controversial criminal probe into Federal Reserve Chair Jerome Powell and clearing a path for his successor, Kevin Warsh, to be confirmed.The proposed off-ramp, which has been floated by at least one Republican lawmaker this week, would see the Powell investigation handed off from the DOJ to the Senate Banking Committee. The idea is an attempt to thread a political needle: It would drop the threat of crimin ...

Core Viewpoint - The discussion centers around the upcoming leadership of Kevin Worsh at the Federal Reserve and the challenges he may face in balancing inflation control with political pressures, particularly from the White House [1]. Group 1: Federal Reserve Leadership and Decision-Making - Kevin Worsh is expected to navigate a challenging environment as he balances the committee's focus on inflation with potential political pressures from the White House [1]. - The role of the Fed chairman involves analyzing decisions, catalyzing workable outcomes, and communicating effectively with various stakeholders, rather than unilaterally deciding on interest rates [1][2]. - Worsh has a plan to lower interest rates while managing inflation, but the effectiveness of this plan in practice remains to be seen [1]. Group 2: Economic Indicators and Monetary Policy - Recent economic data, specifically the ISM manufacturing indicator, showed stronger-than-expected results, raising questions about the need for immediate interest rate cuts [1]. - The Fed's balance sheet has ballooned from $800 billion to $6.5 trillion, and there are discussions about whether it should be reduced and how that might impact interest rates [1]. - Shrinking the balance sheet is viewed as a tightening action, which may not lead to lower interest rates immediately [1]. Group 3: Independence and Accountability of the Federal Reserve - The concept of Fed independence is debated, with some arguing that it should not be a shield against criticism, while others emphasize the need for a balance between independence and accountability [2][3]. - The structure of the Fed allows for democratic input, but no single entity should dictate monetary policy outcomes [4]. - The Fed chair's role is complex, requiring the ability to make strong cases for decisions without having the authority to dictate outcomes [4][5].

Core Viewpoint - Financial markets are experiencing volatility as investors assess the implications of President Trump's nomination of Kevin Warsh to lead the Federal Reserve, particularly regarding interest rates and the Fed's independence [1] Market Reactions - U.S. stocks declined, with the S&P 500 down 0.8%, the Dow Jones Industrial Average down 507 points (1%), and the Nasdaq composite down 1% during midday trading [1] - The U.S. dollar's value increased after fluctuating, reflecting investor uncertainty following the nomination [1] - The price of gold decreased significantly after a strong performance over the past year, indicating a shift in investor sentiment [1] Federal Reserve Influence - The Federal Reserve plays a crucial role in influencing the economy and global markets by setting interest rates, which can impact investment prices [1] - Trump's advocacy for lower interest rates aims to stimulate the economy but raises concerns about potential inflation [1] Concerns About Independence - There is apprehension in financial markets regarding the potential loss of the Fed's independence under Trump's administration, which has previously contributed to rising gold prices and a weaker U.S. dollar [1] - The Fed's ability to make difficult decisions, such as maintaining high interest rates to control inflation, is seen as essential for long-term economic stability [1] - The nomination of Warsh, pending Senate approval, raises questions about the future independence of the Federal Reserve [1]

Group 1 - President Trump is pressuring the Federal Reserve for immediate rate cuts, claiming that Chair Jerome Powell is harming the U.S. economy and national security by maintaining high borrowing costs [1][2] - Trump argues that the U.S. economy's strength, bolstered by tariff revenues, justifies lower interest rates, suggesting the U.S. should have the lowest rates globally [2] - The Federal Reserve held rates steady at 3.5%–3.75% and indicated no immediate plans to ease policy further, emphasizing a data-dependent approach to future decisions [2][3] Group 2 - Powell defended the Fed's independence from political pressure and stated that the central bank is "well positioned" after three rate cuts since September [3] - He downplayed the significance of rising precious metal prices, asserting that they do not reflect a loss of Fed credibility and that inflation expectations remain stable [4] - Gold prices surged 2.2% to a record above $5,530 per ounce, marking an increase of approximately 28% for the month, indicating the strongest monthly performance since January 1973 [5]

Financial markets churned on Friday as investors tried to figure out what President Donald Trump’s new nominee to lead the Federal Reserve will mean for interest rates.U.S. stocks fell, with the S&P 500 down 0.4% after sinking as much as 1.1% earlier in the day. The Dow Jones Industrial Average dropped 179 points, or 0.4%, and the Nasdaq composite lost 0.9%.The value of the U.S. dollar rallied, but only after swiveling a couple times following Trump’s nomination of Kevin Warsh. And some of the wildest actio ...

Core Viewpoint - A key Republican lawmaker supports President Trump's nominee for the Federal Reserve chair but threatens to block the appointment due to concerns over political interference in the Fed's independence [1][5]. Group 1: Nomination and Opposition - President Trump has nominated former Fed Governor Kevin Warsh for the chair position, but his appointment requires Senate approval [2]. - Senator Thom Tillis, a member of the Senate banking committee, has expressed his intention to oppose Warsh's nomination as a protest against the administration's pressure on the Fed's current leadership [2][6]. Group 2: Investigation and Implications - The Justice Department is investigating current Fed Chair Jerome Powell regarding his testimony about a renovation project, which some view as an attempt to pressure the Fed to lower interest rates [3][4]. - Tillis argues that the investigation undermines the Fed's independence and that protecting it from political influence is essential for economic stability [5][6]. Group 3: Future Outlook - If other lawmakers join Tillis in opposition, it could create uncertainty regarding the Fed's leadership, potentially impacting the economy and financial system [5]. - Tillis is not seeking re-election, which may limit the duration of his ability to block the nomination [7][8].

All right, folks. Before we come back to all the goings on on Capitol Hill, first up, I want to talk about Kevin Walsh. He is the right man for the Fed.That's the subject of tonight's riff. Kevin Walsh really is the top man for the job at the Federal Reserve. President Trump has made a superb decision.The brilliant, popular Kevin Hasset will remain as NEC director. The wise Scott Bessant will stay at the Treasury. It's a very strong economic team that will hopefully nurture the supply side productivity-led ...

Group 1 - The nomination of Kevin Warsh to head the Federal Reserve has led to a rally in the dollar and short-dated Treasuries, as he is perceived as less dovish and more focused on inflation control [1][3] - The announcement ended weeks of market speculation regarding Jerome Powell's replacement and the potential impact on market dynamics, particularly concerning the Fed's political independence [2][5] - Warsh's reputation as an inflation hawk contributed to a 0.8% increase in the dollar index, while the bond market reacted with a dip in two-year Treasury yields and a rise in longer-term rates [3][4] Group 2 - The nomination process faced delays due to a Department of Justice investigation into cost overruns at the Fed's headquarters, which has raised concerns about political pressures on the Fed [5][6] - Market volatility was exacerbated by Trump's comments on various issues, including the Fed's credibility in fighting inflation, leading to a steady benchmark rate decision amid signs of labor market stabilization [4][5] - Analysts suggest that the administration may struggle to balance economic growth with inflation control, indicating a complex environment for monetary policy [5][6]

Core Viewpoint - President Trump is set to announce his choice for the chairman of the Federal Reserve, a decision that could impact the central bank's independence from political influence [1] Group 1: Announcement and Candidates - Trump plans to announce his Fed chair nominee on Friday morning, a decision that has been highly anticipated [1] - The search for the nominee was led by Treasury Secretary Scott Bessent, with four known finalists: Kevin Warsh, Christopher Waller, Rick Rieder, and Kevin Hassett [1] - Trump previously indicated that Hassett was the frontrunner but later suggested he wanted Hassett to remain in his current position [1] Group 2: Tensions with Jerome Powell - Tensions between Trump and current Fed Chair Jerome Powell have escalated, with Trump criticizing Powell for not cutting interest rates more aggressively [1] - Powell's term as chair ends in May, but he remains on the Fed's board of governors until 2028, which could limit Trump's ability to influence the board [1] - Powell has emphasized the importance of the Fed's independence and advised any successor to avoid getting involved in electoral politics [1] Group 3: Implications of the Nomination - The new Fed chair could influence interest rates, inflation, and job market stability, which are critical to the U.S. economy [1] - If Powell remains on the board, he could create procedural hurdles for Trump's nominee, potentially affecting the balance of power within the Fed [1] - Trump's nominee is expected to align with his views on monetary policy, particularly regarding interest rate cuts [1]