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Yahoo
6 hours ago
- Business
- Yahoo
Trump Sends ‘Mean Girls'-Style Sharpie Note to Jerome Powell
President Donald Trump escalated his war on Federal Reserve Chair Jerome Powell by sending him a Sharpie note. It comes as the president has made numerous personal attacks on the Fed chair for not cutting interest rates as quickly as the president wants. The note was revealed by White House Press Secretary Karoline Leavitt on Monday in a new briefing where she held up a chart with the president's message written over it. 'Jerome - You are, as usual, 'too late." You have cost the USA a fortune and continue to do so - You should lower the rate - by a lot!" the note read. It went on 'Hundreds of billions of dollars being lost! No inflation.' The president's note was written in Sharpie on a chart that showed central bank rates. It was signed at the end by the president. 'I bring to you original correspondence from the President of the United States to our Fed Chair Jerome Powell, as the president has consistently stated, the American economy is booming,' Leavitt declared at the briefing. Leavitt rattled off a series of interest rates from around the world on the chart before reading the president's Sharpie note aloud to reporters. The style of the note, written in marker with exclamation marks and a clear sense of frustration, gave off strong Mean Girls movie vibes, as there is a moment in the film where Regina George angrily writes a nasty note in the 'Burn Book.' While George's message was about herself in a fictional movie about the horrors of high school girl friendships, there were similarities in note style. Trump's note on Monday was the latest in a series of attacks the president has made on Powell over several weeks. The criticism escalated over the weekend. 'He's a bad person,' Trump said of Powell in a Fox News interview that aired on Sunday. 'We're going to get somebody into the Fed who's going to be able to lower the rates.' Trump has been trying to pressure Powell, who he nominated for chair during his first term, to lower the Fed's short-term benchmark rate, but Powell has refused to bow to the pressure. The Federal Open Market Committee (FOMC) left the federal funds rate unchanged this month at 4.25 percent to 4.50 percent at its fourth consecutive meeting. Trump has blasted Powell in a series of appearances and in social media posts. He has called him 'Mr. Too Late' and even 'stupid.' The president has held off on firing the Federal Reserve chair outright and installing a new loyalist, but even if he did, Powell cannot override the FOMC vote or unilaterally cut the rate. Powell's term leading the U.S. Central Bank is up next year, so there has been a lot of speculation over who Trump will pick to replace him. One person who said he would accept the job if it was offered was Treasury Secretary Scott Bessent. The president even mused earlier this month that he would name himself head of the Fed and claimed he would do a better job.
Miami Herald
a day ago
- Business
- Miami Herald
Federal Reserve chair sends strong message on July interest rate cut
Don't hold your breath, but… Federal Reserve Chair Jerome Powell on July 1 told a global audience of world bankers, economists, and academics what could prompt a long-awaited U.S. interest rate cut later this month. Don't miss the move: Subscribe to TheStreet's free daily newsletter+ Speaking on a panel with four other central bank leaders at the Sintra Conference in Portugal, Powell outlined the requirements that are needed for the Federal Open Meeting Committee to cut the Federal Funds Rate at its next meeting on July 29-30. Related: Morgan Stanley predicts next Federal Reserve interest rate cut As the last rate cut was in December 2024, the politically independent Fed has been under mounting pressure from President Donald Trump to slash rates to put "TRILLIONS" of dollars back into the hands of consumers, businesses, and investors. Powell has defended the FOMC's universal decision to hold the Federal Funds Rate steady at 4.25% - 4.50% in June, despite describing the U.S. economy as "stable." The reason: expected inflation bubbling up prices this summer from President Trump's tariffs, which are external sales taxes on imported goods and services. The U.S. tariff rates are currently the highest the nation has seen in nine decades. The funds rate is tied to the cost of borrowing money, impacting all aspects of the American economy. Interest rates on mortgages, credit cards, auto loans, and a host of other loans and investment vehicles are straining wallets and portfolios. The FOMC's "wait-and-see" approach to the funds rate was in keeping, Powell said, with the Fed's dual mandate of prudent monetary policy. This requires the central bank to regulate the U.S. money supply by keeping inflation in check and the unemployment rate stable. Related: Top economist sends sobering tariff, interest rate forecast Some Fed and market analysts were forecasting the next probable rate cut of .25% could come at the September FOMC meeting. Then Fed Governors Christopher Waller and Michelle Bowman, both Trump appointees, separately said late last month that a funds rate cut could come as early as the July meeting, providing tariff inflation proved to be transitory and the jobs numbers didn't weaken. Other economists, including Powell during testimony last week on Capitol Hill, and Fed officials were not as aggressive. Morgan Stanley Chief U.S. Economist Michael T. Gapen said in a note to analysts that he did not expect to see a rate cut at all this year. The Sintra Conference is formally known as the ECB Forum on Central Banking. It is the European Central Bank's flagship annual meeting held each summer in Sintra, Portugal. This year's theme: "Adapting to Change: Macroeconomic Shifts and Policy Responses." Powell noted that a "solid majority of central banks later this year" will begin to reduce interest rates later this year. As for a July cut in the United States, Powell responded "I really can't say." He added that the Fed will be "carefully watching the labor market" over the remaining four 2025 meetings. The Bureau of Labor Statistics releases its June jobs report on Thursday, July 3. Related: Fed Chair Powell sends surprise message on interest rate cuts to Congress So how does Powell expect to look back on 2025? "It's clearly an important year,'' Powell said, drawing laughter from the audience and fellow panelists. "There's a lot going on…with trade, and I think I'm hopeful that we'll look back on it as a [successful] year." The panel moderator, Bloomberg anchor Francine Lacqua, then addressed the elephant in the room: "You get attacked by the president a lot on a personal basis. Does it make your job harder?" -More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year "I'm very focused on just doing my job," Powell responded. "I mean, there are things that matter…using our tools to achieve the goals that Congress has given us, maximum employment, price stability, financial stability, what we focus on 100%," . European Central Bank President Christine Lagarde supported Powell's nonpolitical independence. "I think I speak for myself, but I speak for all colleagues on the panel. I think we would do exactly the same thing as our colleague Jay Powell does," she said. On June 30, President Trump sent Powell a hand-written note demanding a 1% rate cut. This came the same day Treasury Secretary Scott Bessent stoked the flames around the topic of Powell's successor, with himself as a potential candidate. Powell's term as chair is up in May 2026, and his separate term as a member of the Fed's Board of Governors expires in January 2028. Despite the president making aggressive demands for months, Powell has said he won't resign as chair. Related: Fed official sends strong message on interest rate cuts The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
a day ago
- Business
- Miami Herald
Morgan Stanley predicts next Federal Reserve interest rate cut
Hold on to your wallets. Tariff-fueled inflation is coming your way. Don't miss the move: Subscribe to TheStreet's free daily newsletter It may already be here, depending on what June economic indicators show as early as this week. Related: Top economist sends sobering tariff, interest rate forecast There's great debate among economists as to what the impact President Donald Trump's tariffs - currently the highest in the last 90 years - will have on the overall economy and for how long. This is causing a huge case of national agita over high interest rates on mortgages, student loans, credit cards, and other consumer and investment services. Morgan Stanley Chief U.S. Economist Michael T. Gapen released an updated forecast in a note to analysts that some Federal Reserve Board watchers may find disappointing. President Trump certainly will. Image source:Fed Chair Jerome Powell defended the Federal Open Meeting Committee's universal decision to hold the Federal Funds Rate steady at 4.25% - 4.50% in June. The FOMC's "wait and see" approach to the funds rate was in keeping, Powell said, with the Fed's dual mandate of prudent monetary policy. This requires the central bank to regulate the U.S. money supply by keeping inflation in check and the labor market stable. But that's a difficult balance because low inflation can lead to higher unemployment rates and low unemployment rates lead to inflation higher that the Fed's preferred 2% annually. Oh, and at the same time, GDP has to be happy and healthy. Related: Fed official makes surprising interest rate cut prediction The funds rate is tied to the cost of borrowing money for consumers, investors, and businesses. For example, mortgage rates, currently hovering at 6.8%, are the highest of this century. The last funds rate cut was in December 2024. Since Trump took office in January 2025 and kept his campaign promise to impose tariffs on U.S. trading partners, heads from Main Street to Wall Street have been spinning as the components of trade wars zig and zag. President Trump, meanwhile, has aimed a steady deluge of vitriolic criticism at Powell that expanded June 30 to include the entire Fed board. Trump is demanding the independent Fed cut rates down to 1%. "If they were doing their job properly, our Country would be saving Trillions of Dollars in Interest Cost,'' the president wrote in his Truth Social account. "The Board just sits there and watches so they are equally to blame." Both Fed and market watchers were forecasting the next probable rate cut could appear at the September FOMC meeting. Then Fed Governors Christopher Waller and Michelle Bowman, both Trump appointees, separately said that a funds rate cut could come as early as the Fed's July 29-30 meeting if the tariff inflation proved to be short-term and jobs numbers held up. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year Other economists, including Powell during testimony on June 24-25 before both Houses of Congress, were not as aggressive. Waller has been named as one of the handful of possible successors to Powell. The CME Group's widely respected Fed Watch tool raised the likelihood of a .25 percent Federal Funds Rate cut to 21.2% in the FOMC July meeting. Gapen isn't budging on his forecast from earlier this year. His note not only says it is unlikely that there will be a cut in July or September, but also predicts there won't be a single rate cut for the rest of 2025. Instead, Gapen is forecasting a very hawkish 2026 with seven rate cuts. "First, we think the data flow will continue to be consistent with a cautious Fed. We expect firmer inflation prints showing more signs of a tariff push over the summer. And we see relatively solid upcoming employment reports, with slowing employment gains but no signs of crack that would put the Fed in a hurry,'' the note said. Second, Gapen's note said that Bowman's and Waller's views on a July cut are not shared by other Fed officials, who are much more aligned with Powell. The Fed's Summary of Economic Projections (SEP) showed "there are seven policymakers who expect no cuts this year," the note said. "The majority seems willing to wait for data to give clarity about the balance of risks to the dual mandate,'' Gapen's note said. What could cause a rate decrease this year? "A meaningful deterioration in labor markets, with negative payrolls and a rising unemployment rate above 4.5%, in a context of a minor inflationary push from tariffs,'' the note said. Related: Fed official revamps interest-rate cut forecast for rest of this year The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Irish Examiner
3 days ago
- Business
- Irish Examiner
David McNamara: Divergence grows between Fed and markets on rate expectation
The recent moves in US rates and the dollar highlight a growing divergence between the Fed and markets, amid signs of division on the rate-setting Federal Open Market Committee (FOMC). With the Fed's latest 'dot-plot' indicating very little change in the median rate expectations of members compared to the March forecasts, it appeared the Fed was content to sit on the sidelines until the autumn at least. However, comments from prominent Governors (Waller, Bowman) calling for a rate cut as soon as July suggest upcoming FOMC meetings may be more fraught affairs. Added to the uncertainty, media reports suggest US President Donald Trump may select a new Fed chairperson early, in an attempt to undermine the authority of Jay Powell as he winds down his term, which ends in May 2026. The aforementioned Waller is now a warm favourite on betting markets, with his newfound dovishness no doubt a boon to his candidacy with President Trump. Amidst the uncertainty, markets have moved materially ahead of the Fed's current dots, pricing in a Fed funds rate at 3.1% by end-2026, compared to an FOMC median projection of 3.6%, and US Treasury yields are 10-15bps lower on the week. Alongside a general easing in geopolitical risk, this has added further impetus in recent days to the dollar's ongoing depreciation. EUR/USD is now trading towards the midpoint of $1.17-1.18, raising questions of how far the greenback could fall. As we discussed recently, in terms of important levels to watch in the near term for EUR/USD, a sustained break above the recent $1.14-$1.16 range would imply further material downside for the dollar. The $1.20 mark would represent the next significant resistance, as the pair has not traded on a sustained basis above this threshold since 2014. Currency upsides While markets are focused on downside risks for the dollar, it is also worth noting the upsides. First, the Fed still retains a bias towards limited rate cuts, with seven members pricing in no cut at all in 2025 in the June FOMC projections. This cohort remains vigilant of the inflationary risks inherent in the potential US policy shifts on trade and taxation. Indeed, this week's flash US PMIs showed a notable uptick in input and selling prices to a three-year high in June, suggestive of inflationary pressures to come due to tariffs. Therefore, the move in rate futures may be overdone. Second, the dollar still benefits from its reserve status. The Eurozone has seen some inward capital flows in 2025, but the currency will struggle to erode the US dollar's crown as the reserve currency, given the paucity of safe assets beyond the German bund market. This TINA (there is no alternative) problem might yet provide a floor for the US dollar given the lack of safe-haven alternatives beyond US markets, even in the event of a reckless turn in US trade policy. However, attempts from President Trump to interfere more boldly in monetary policy could see markets explore more pressingly for an alternative to the dollar, which would pose significant downside risks for the US unit. David McNamara is Chief Economist with AIB Read More David McNamara: Central banks kick to touch amid uncertainty
Miami Herald
3 days ago
- Business
- Miami Herald
Top economist sends sobering tariff, interest rate forecast
From baby strollers to clothes dryers to lumber, American shoppers are acutely aware that tariffs are the highest they've been in 90 years. But they're not just paying for it at the cash register. Don't miss the move: Subscribe to TheStreet's free daily newsletter President Donald Trump's seesawing tariffs and their rip-roaring trade wars (O Canada!) are keeping interest rates high, according to many economists and market watchers. Related: Fed chair sends strong message on tariffs to Senate panel This means mortgage rates, auto financing, student loans, credit cards, and other forms of borrowing money cost more. So when will the economy perk up for consumers? Torsten Slok is a partner and chief economist at Apollo Global Management. He outlines his take on the rest of 2025 in the note "Mid-Year Outlook: At the Crossroads of Stagflation…". Image source: Bloomberg/Getty Images Federal Reserve Board Chair Jerome Powell defended keeping the Federal Funds Rate steady in June per the Fed's dual mandate: prudent monetary policy regulating the money supply that keeps inflation and unemployment relatively low and GDP happily growing along. Powell described the economy as solid, but said a "wait-and-see" forecast is needed until the full impact of the expected tariff prices passes through inflation and employment numbers over the next three months. The Federal Open Meeting Committee controls the Federal Funds Rate, which banks charge each other overnight to borrow money. The funds rate is tied to the cost of borrowing money for consumers, investors, and businesses. The Federal Open Meeting Committee said June 18 it would keep the Federal Funds Rate at 4.25% to 4.50%. Related: Fed official makes surprising interest rate cut prediction Both Fed and market watchers were forecasting the next probable rate cut could appear at the September FOMC meeting. Then Fed Governors Christopher Waller and Michelle Bowman separately said that a funds rate cut could come as early as the Fed's July 29-30 meeting if the tariff inflation proved to be short-term and jobs numbers held up. Federal Reserve Bank of Minneapolis President and CEO Neel Kashkari, who is a member of the FOMC this year, said he is retaining his position of two .25 percent funds rate cuts this year, with the first possibly coming in September, depending on the data shown. More Federal Reserve: Fed interest rate cut decision resets forecasts for the rest of this yearFederal Reserve prepares strong message on long-term interest ratesFed official revamps interest-rate cut forecast for this year And former Fed Governor Daniel Tarullo told CNBC June 27 he wouldn't cut rates at this point, as "both sides of the mandate are performing reasonably well." Meanwhile, President Trump repeated the same day that he wanted the Fed to cut the fund rate down to 1% when it meets in late July. Slok's note offers a stern outlook for interest rates, tariffs, and recession odds: While below initial expectations, this is still the highest level of tariffs the U.S. has had in nearly nine decades and, if maintained, will have substantial impact on the U.S. and global economies. Tariff hikes are typically stagflationary shocks - they simultaneously increase the probability of an economic slowdown while putting upward pressure on prices. In our view, the current tariff regime increases the chance of a U.S. recession to 25% over the next 12 months. As a result, we continue to expect interest rates higher for longer. As of this writing, we see the Federal Reserve cutting rates only once in 2025, with a year-end fed funds-rate target range of 4.00% to 4.25%. We believe that Fed Chairman Jerome Powell will likely take a conservative approach to easing policy to safeguard against fears of runaway inflation. Economic data have mirrored the volatility in the markets and trade policy. Soft indicators (e.g., confidence surveys) have fluctuated in tandem with news of on-again, off-again tariffs, while hard data (i.e., employment and inflation) have shown more resilience. This discrepancy has added to uncertainty and continues to fog the economic outlook. Related: Fed official revamps interest-rate cut forecast for rest of this year The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
