Bank of America CEO Brian Moynihan emphasized the importance of maintaining the Federal Reserve’s independence amidst President Trump’s search for a new chair. He stated that the market would negatively react if the Fed’s independence was compromised. The current chairman’s term expires in May 2026, and although Mr. Trump has the power to nominate the new chair, Moynihan believes there is currently “too much fascination with the Fed.” Moynihan suggests the focus should remain on the private sector and the individuals that drive the economy.
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The Federal Reserve Chair, Powell, expressed concerns about the accuracy of recent job creation figures. The Bureau of Labor Statistics (BLS) relies on a statistical model to estimate job gains and losses, which has, in recent years, led to overestimations that are later revised. This issue is further complicated by the political response to job reports, with the Trump administration having previously reacted negatively to unfavorable data. There is concern the administration might pressure the BLS to produce more favorable numbers.
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Fed Chair Jerome Powell Says U.S. May Be Drastically Overstating Jobs Numbers, and the implications are significant. It seems the current economic data, particularly the jobs numbers, might not be as rosy as they’ve been painted. This is not just a casual observation; it’s a concern coming from the very top, the head of the Federal Reserve. It’s like a quiet alarm bell, subtly suggesting that the economy’s performance could be less impressive than the official reports indicate.
The crux of the issue boils down to how the Labor Department measures job creation, specifically how it deals with the constant churn of businesses opening and closing.… Continue reading
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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Due to the 43-day federal government shutdown, the Labor Department will not release a complete jobs report for October. The department was unable to calculate the unemployment rate and other key numbers because of the shutdown. However, it will release the number of jobs created in October alongside the full November jobs report, which is now scheduled for December 16th. The September jobs report, which will be released Friday, will likely receive extra attention as it is the last full measurement of hiring and unemployment that Federal Reserve policymakers will see before their meeting in December.
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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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Despite recent rises in inflation, exceeding the Federal Reserve’s 2% target, both the Trump administration and the Federal Reserve have downplayed its significance. While President Trump claims inflation is defeated, tariffs on imported goods are contributing to rising consumer prices, potentially eroding confidence in the central bank’s ability to keep inflation in check. Increased costs due to tariffs are already leading companies to raise prices, and potential supply chain disruptions could further exacerbate the issue. Some economists warn that if inflation persists, it could jeopardize the Fed’s credibility and lead to difficult economic consequences.
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The Supreme Court has allowed Lisa Cook to remain as a Federal Reserve governor for now, declining to act on the Trump administration’s effort to immediately remove her from the central bank. The court will hear arguments in January regarding Trump’s attempt to force Cook off the Fed board and will consider whether to block a lower-court ruling in Cook’s favor. This case stems from Trump’s unprecedented bid to reshape the Fed board and stems from accusations of mortgage fraud against Cook, while a related case involving Trump’s firings of other federal officials is also being heard. Cook, who denies any wrongdoing, will be able to participate in the remaining two Fed meetings in 2025.
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The Trump administration has petitioned the Supreme Court for an emergency order to remove Lisa Cook from the Federal Reserve’s board of governors. This action follows a failed attempt by the administration to oust Cook, who was appointed by President Joe Biden, and is part of a larger effort to reshape the Fed. The legal challenge is unprecedented, as no president has previously fired a sitting Fed governor. The administration argues that Cook’s alleged actions regarding mortgage rates raise concerns about her trustworthiness and ability to manage interest rates, though she denies any wrongdoing and has not been charged with a crime.
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John Q. Hosedrinker 
Matt Underwood