The Trump administration initiated a criminal investigation into Federal Reserve Chair Jerome Powell, alleging he lied to Congress about headquarters renovations, a move perceived as an attempt to force interest rate cuts. This investigation is considered a tactical blunder, as it demonstrates Trump’s true motive of undermining the Fed’s independence for political gain. The probe also reveals why the judiciary must protect Powell, as Trump’s actions showcase his disregard for the rule of law. Ultimately, the Supreme Court, already wary of the administration’s actions, should use this as reason to impose strict limits on the president’s ability to fire the Fed’s members.
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Federal Reserve Chair Jerome Powell announced that the US Department of Justice is threatening him with criminal charges, which he condemned as intimidation for not adhering to President Trump’s interest rate policy demands. Powell stated that grand jury subpoenas were served related to his congressional testimony on Fed office building renovations, but asserted that the accusations are a pretext for political pressure. The charges, Powell claims, are a consequence of the Federal Reserve setting interest rates based on economic assessments rather than presidential preferences. Democratic members of Congress have come to Powell’s defense, accusing Trump of undermining the rule of law.
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Good evening. Regarding the recent actions taken by the Department of Justice, grand jury subpoenas have been served to the Federal Reserve, threatening a criminal indictment stemming from testimony before the Senate Banking Committee. This unprecedented action is viewed as a consequence of the Federal Reserve’s independent setting of interest rates, rather than adhering to political preferences. The core issue centers on whether the Fed can continue to make decisions based on economic data rather than succumbing to political pressure. Despite these challenges, the commitment remains to fulfill the duties with integrity and serve the American people.
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The price of gold has surged in 2025, experiencing its highest increase since 1979, driven by factors such as interest rate expectations, geopolitical tensions, and trade concerns. Gold reached a high of $4,426.66 per ounce, with analysts predicting two interest rate cuts in 2026, which typically leads investors to diversify into commodities like gold. Central banks are also increasing their gold holdings, further boosting demand as a hedge against economic instability, and a weaker US dollar is making the metal more accessible. Other precious metals like silver and platinum have also seen record highs, supported by industrial demand.
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The Federal Reserve cut interest rates for the third time this year, though the decision was not unanimous, highlighting internal division regarding the best course of action for the U.S. economy. This split within the Federal Open Market Committee underscores the economic uncertainty caused by factors like tariffs and changes in the labor force. Compounding these issues, economic data collection was hampered by the government shutdown, and the term of the current Fed chair is ending soon, leading to political pressure. The Fed is navigating the balancing act of managing potential economic downturns with inflationary pressures while facing pressure from the White House regarding interest rate decisions.
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The Federal Reserve faces a potentially contentious meeting, as Chair Jerome Powell navigates divisions among policymakers regarding a third interest rate cut. Economists suggest that several officials might vote against the cut due to an economy marked by elevated inflation and weak job growth. The upcoming decision may be a preview of the Fed’s future direction, especially considering the potential influence of a new chair appointed by President Trump. Despite potential dissent, most economists anticipate a “hawkish cut,” with a rate reduction accompanied by signals of a pause to assess economic health.
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The Bureau of Labor Statistics reported a 3% annual consumer price growth in September, slightly exceeding August’s 2.9%. While the monthly rate fell from 0.3% to 0.2%, key categories experienced increases. This report, released despite the government shutdown, has implications for the Federal Reserve, which is expected to lower its benchmark rate. Though the inflation rate remains a concern, experts predict fewer interest rate cuts in the future than initially anticipated.
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The Federal Reserve lowered its key interest rate by a quarter-point, projecting two more cuts this year due to concerns about the labor market’s health. This move, the first since December, reflects a shift from focusing on inflation to employment, as hiring slows. While the Fed aims to boost growth and hiring, the decision faced dissent from a newly appointed policymaker favoring a larger cut. Despite some internal differences, officials still anticipate further rate reductions, although less than Wall Street had anticipated. The Fed faces the challenges of a weakening economy and external pressures on its independence, particularly regarding the attempt to remove a Fed governor.
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On Wednesday, the Bank of Canada reduced its key interest rate by 25 basis points to 2.5 per cent, marking its first cut since March. This decision was made due to a weakening economy, softening job market, and reduced inflation risks, which the central bank believes are now more “contained”. The U.S. trade war continues to impact the Canadian economy, specifically in tariff-exposed industries. Despite a stronger-than-expected consumer spending in the second quarter, the central bank decided that a rate cut was still appropriate to better balance the risks going forward.
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Former President Donald Trump announced on Truth Social that he is considering a major lawsuit against Federal Reserve Chair Jerome Powell, citing the rising costs of the Fed’s building renovation project, which Trump claims is grossly mismanaged. The Fed attributes the project’s higher-than-expected costs to necessary redesigns and unforeseen issues like asbestos and soil contamination. Trump’s post also reiterated his demand for Powell to cut interest rates following the latest inflation data, as headline CPI inflation held steady while core inflation accelerated. Market expectations have shifted toward a September rate cut, although some experts express concerns about the trend of rising core inflation.
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John Q. Hosedrinker