Find out which banks are offering the best CD rates right now. If you’re looking for a secure place to store your savings, a certificate of deposit (CD) may be a great choice. These accounts often provide higher interest rates than traditional checking and savings accounts. However, CD rates can vary widely.
Learn more about where CD rates stand today and how to find the best rates available.
CD rates are relatively high compared to historical averages. That said, CD rates have been on the decline since last year when the Federal Reserve began cutting its target rate. The good news is that several financial institutions offer competitive rates of 4% APY and up, particularly online banks.
Today, the highest CD rate is 4% APY. This rate is offered by Marcus by Goldman Sachs on its 1-year CD.
Here is a look at some of the best CD rates available today from our verified partners:
The Federal Reserve began decreasing the federal funds rate in light of slowing inflation and an overall improved economic outlook. It cut its target rate three times in late 2024 by a total of one percentage point.
In December, the Fed announced its third rate cut of 2025 and additional cuts could be on the horizon in 2026. However, it’s uncertain when that will happen and how many cuts the Fed plans to make.
The federal funds rate doesn’t directly impact deposit interest rates, though they are correlated. When the Fed lowers rates, financial institutions typically follow suit (and vice versa). So now that the Fed has lowered its rate, CD rates are beginning to fall again. That’s why now may be a good time to put your money in a CD and lock in today’s best rates.
The process for opening a CD account varies by financial institution. However, there are a few general steps you can expect to follow:
Research CD rates: One of the most important factors to consider when opening a CD is whether the account provides a competitive rate. You can easily compare CD rates online to find the best offers.
Choose an account that meets your needs: While a CD’s interest rate is a key consideration, it shouldn’t be the only one. You should also evaluate the CD’s term length, minimum opening deposit requirements, and fees to ensure a particular account fits your financial needs and goals. For example, you want to avoid choosing a CD term that’s too long, otherwise you’ll be subject to an early withdrawal penalty if you need to pull out your funds before the CD matures.
Get your documents ready: When opening a bank account, you will need to provide a few pieces of information, including your Social Security number, address, and driver’s license or passport number. Having these documents on hand will help streamline the application process.
Complete the application: These days, many financial institutions allow you to apply for an account online, though you might have to visit the branch in some cases. Either way, the application for a new CD should only take a few minutes to complete. And in many cases, you’ll get your approval decision instantly.
Fund the account: Once your CD application is approved, it’s time to fund the account. This can usually be done by transferring money from another account or mailing a check.
The shine is coming off gold and silver. Prices for the precious metals, which last week soared to record highs, are extending their slide after a sharp selloff on Friday.
Gold, which topped $5,500 last week, dipped below $4,500 per ounce in overnight trading. Friday’s decline amounted to the biggest one-day drop in the shiny metal’s price since 2013, noted Pepperstone senior research strategist Michael Brown. Silver also suffered its worst daily loss, tumbling more than 31%.
As of 10:30 a.m. EDT, gold and silver had rebounded to $4,779 and $81.
What’s behind the metals meltdown?
Investors have poured into the metals in the last year amid concerns about mounting global geopolitical uncertainty and government borrowing, as debt levels across the U.S. and other major economies continue to rise.
The sell-off on Friday came after President Trump announced Kevin Warsh as his nominee to succeed Jerome Powell as chair of the Federal Reserve. Although Warsh has over the last year argued in favor of lowering interest rates, he is generally viewed as “hawkish” on inflation.
With consumer prices still running above the Fed’s annual 2% target, that could incline Warsh against the kind of aggressive rate-cutting that President Trump has demanded, according to Wall Street analysts. Gold prices often (though not always) fall as interest rates rise because holdings of the metal don’t pay interest, leading investors to rotate into stocks and other risk assets in search of higher returns.
The plunge in precious metal prices was also fueled by a rebound in the dollar, which had fallen to its lowest level in four years before Warsh was nominated as Fed chair, according to JPMorgan analysts. The values of gold and the dollar typically move in opposite directions.
“We get a catalyst of a rebound in the U.S. dollar, to some degree on the back of the nomination of Warsh, and from that perspective, that’s really the trigger that leads to very swift, significant de-risking… and the real sharp rollover into Friday,” Gregory Shearer, executive director of global commodities research at J.P. Morgan, in a call with clients on Monday.
Other factors also fed into the sell-off. Investors had borrowed heavily capitalize on the run-up in gold over the last year. But once prices began to slide, many of those same investors faced rising margin requirements, the minimum amount set by brokerage firms to maintain their leveraged position, according to Nigel Green, CEO of financial consulting firm deVere Group.
“Many chose, or were forced, to sell,” Green said in an email. “This process pushes prices lower regardless of fundamentals.”
Where are precious metal prices headed now?
On Wall Street, opinions are mixed on where gold and silver prices go from here.
“The recovery may not be immediate or dramatic, but we believe the mechanics favor a bounce rather than continued freefall once the forced phase ends,” Green said.
JPMorgan analysts also think the hard assets are likely to recover. In a research note, commodities analysts with the bank lifted their year-end target for gold to $6,300.
But Neil Shearing, group chief economist at investment advisory firm Oxford Economics, said in a research note that he expects gold to end the year “well below current levels.”
“While some market participants may be buying gold due to genuine concerns about the global economic and political backdrop, our sense is that market exuberance and a dose of FOMO are inflating a bubble in gold,” he added.
No institution has more influence over what Americans can afford than the Federal Reserve, one most people rarely follow but feel every month in their finances.
That influence isn’t always obvious. The Fed doesn’t decide what groceries or cars cost, but it does determine how expensive it is to borrow money to pay for them. And right now, borrowing is costly. High interest rates mean larger monthly payments on mortgages, car loans and credit cards, even if the sticker price of a home or vehicle hasn’t changed.
That makes the Fed’s leadership especially consequential. On Friday, President Donald Trump nominated Kevin Warsh to succeed Federal Reserve Chair Jerome Powell, a move that could alter how aggressively the central bank approaches interest rates.
Kevin Warsh, former governor of the U.S. Federal Reserve, was tapped by President Donald Trump to lead the Fed.(Tierney L. Cross/Bloomberg/Getty Images)
Trump has blamed Powell for not cutting rates more aggressively, even as he has repeatedly described the economy as strong. Historically, rate cuts have usually been reserved for times of economic weakness, not growth.
That disagreement over rates has real-world consequences. For many Americans, the effects are most visible in the housing and auto markets, two of the biggest expenses for most families. You’re not paying more because the home or car suddenly costs more. You’re paying more because the money to buy it does.
Those elevated borrowing costs are acting like a form of second inflation, pushing mortgages, car loans and credit card bills to levels that stretch household budgets thin. That’s why everyday life can still feel more expensive. Prices may not be climbing as quickly anymore, but the cost of paying for big purchases continues to rise.
Mounting costs on builders ultimately get passed on to buyers, pricing many out of the market.(Matthew Busch/Bloomberg/Getty Images)
Economists say affordability will not meaningfully improve until the Fed begins cutting rates and keeps them low long enough to ease pressure on long-term borrowing.
That backdrop has become a political liability for Trump, who campaigned on restoring affordability and easing household financial strain but now faces growing voter skepticism over whether those promises are materializing.
A recent Fox News poll underscores the stakes. When voters were asked what President Donald Trump’s top priorities should be, nearly four in 10 cited either the economy overall (19%) or prices (17%).
Affordability concerns are also giving Democrats an early edge in the generic congressional ballot, which asks voters which party they would support in their U.S. House race this November. While largely hypothetical at this stage, the question offers an early baseline for the coming election, according to Republican pollster Daron Shaw, who said the poll is an early read, not a forecast.
“We ask about it at this point simply to get a sense of how short-term forces might play out in the general election,” Shaw said.
President Donald Trump has begun a nationwide tour to address economic concerns. (Daniel Torok/Official White House Photo)
Democrats leaned heavily on affordability themes in state and local elections this fall, and it paid off.
In places like Virginia, New York and New Jersey, where voters have been squeezed by high housing costs and utility bills, Democratic candidates seized on Trump’s early economic moves, including his trade policy, to argue that his policies were worsening the affordability crisis rather than easing it.
Democratic New York City mayor Zohran Mamdani placed affordability at the center of his campaign to helm America’s largest city.(Andrew Lichtenstein/Corbis/Getty Images)
They promised to rein in energy costs, expand affordable housing and protect middle-class wages, a message that resonated with voters and, analysts say, reflects a broader trend. In an economy where many still feel stretched thin, the party that speaks most directly to people’s pocketbooks often wins.
The Fed’s decision about rate cuts will shape the economy’s trajectory and how affordable life feels for millions of Americans in the new year.
Amanda covers the intersection of business and politics for Fox News Digital.
President Trump celebrated a new federally-funded investment program, called Trump Accounts, aimed at giving kids a long-term financial foundation. Treasury Secretary Scott Bessent sat down with “CBS Saturday Morning” to discuss the initiative and the looming changes at the Federal Reserve.
President Trump announced Kevin Warsh as his nominee to succeed Jerome H. Powell as chair of the Federal Reserve. Our reporter Colby Smith explains why the choice matters for the economy.
By Colby Smith, Melanie Bencosme, Sutton Raphael, June Kim and Thomas Vollkommer
January 30, 2026
Colby Smith, Melanie Bencosme, Sutton Raphael, June Kim and Thomas Vollkommer
Investors are greeting President Trump’s nomination of Kevin Warsh to lead the Federal Reserve with cautious approval, while weighing key questions about how the former Fed governor’s crisis-era credentials and appetite for change could reshape U.S. monetary policy.
Warsh’s hawkish reputation as a former Federal Reserve governor from 2006 to 2011, coupled with his role during the 2008 financial crisis, has helped calm fears of a disruptive overhaul in how the central bank is run.
Yet investors also foresee potential shifts at the Fed under Warsh’s leadership, following his previous comments about a need for change and a recent openness to lowering interest rates. While U.S. financial markets were little changed on Friday, investors pulled from safe-haven assets such as gold and silver, a sign of relief over Mr. Trump’s choice to replace Fed Chair Jerome Powell with a known figure like Warsh.
“That crisis-era experience also suggests to us that Warsh is the person you want running the Federal Reserve if there is a new disruption to the financial system,” said Jaret Seiberg of TD Cowen in a research note.
Here are three important questions for investors with Warsh on tap to lead the Fed.
More rate cuts ahead?
The biggest question for investors, along with consumers and businesses, is how Warsh’s nomination might alter the Federal Reserve’s interest rate outlook. The central bank held its benchmark rate steady at its most recent meeting on Jan. 28, after officials in December penciled in just one rate cut for 2026.
At the same time, Mr. Trump has pressured the Fed to lower rates more aggressively, a call he renewed Thursday after the central bank’s latest meeting. “The Fed should substantially lower interest rates, NOW!” Mr. Trump wrote on social media.
Warsh has long held hawkish views on inflation, meaning that he has leaned toward keeping interest rates higher as a way to contain inflation. More recently, however, Warsh has softened his stance, telling Fox News host Larry Kudlow that cutting interest rates could tee the economy up for the “next degree of acceleration.”
“Though traditionally hawkish on inflation, Warsh will argue for more rate cuts by leaning into the argument that productivity gains from AI will allow strong growth without undesirable inflation,” Oxford Economics analysts told investors. “We don’t want to label him as ultra-dovish yet — his views could shift once confirmed.”
Expectations for rate cuts edged slightly higher after Mr. Trump announced Warsh’s nomination, signaling that investors see room for easing this year, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
“There is some sense that he’s going to be pragmatic, but not necessarily ideologically opposed to the monetary setting becoming increasingly accommodative,” Luschini told CBS News.
Even so, Warsh won’t have unilateral control over interest rates, as the federal funds rate is set by a majority vote of the 12 members of the Federal Open Market Committee (FOMC).
What about Fed independence?
Powell has steadfastly defended the central bank’s independence, emphasizing the importance of insulating monetary policy from political pressure. He reiterated that sentiment on Wednesday in discussing the Fed’s decision to hold short-term interest rates steady.
An independent central bank “is a good practice — it’s pretty much everywhere among countries that look at all like the United States, and if you lose that, it would be hard to restore the credibility of the institution,” Powell said.
Mr. Trump’s eagerness for the Fed to ease borrowing costs raises questions about whether Warsh would bow to the president’s wishes even if economic data signaled a need to stand pat or raise rates, experts note. Because of Warsh’s background, many analysts said they expect him to uphold the Fed’s independence.
If Warsh bends under political pressure, he risks eroding his credibility among other members of the FOMC, Luschini told CBS News.
In April 2025, Warsh addressed the importance of Fed independence during remarks at a meeting hosted by the International Monetary Fund.
“I strongly believe in the operational independence of monetary policy as a wise economy decision,” Warsh said. “And I believe that Fed independence is chiefly up to the Fed.”
What does it mean for investors?
Experts noted that a new Fed chair pick injects some uncertainty into financial markets as investors reassess how monetary policy could shift under new leadership.
Warsh has called for changes to the Fed’s regulatory and monetary framework, writing in a November Wall Street Journal op-ed that reducing the central bank’s balance sheet would free up liquidity and make it easier for households and small businesses to borrow.
In order for Warsh to instill confidence in markets, experts said investors will want more details on how he intends to run the Fed.
“This isn’t about whether Kevin Warsh would hike or cut tomorrow, next month or even this year,” said Mark Malek, CIO at Siebert Financial, in an email. “It’s about the market suddenly having to re-anchor its expectations around a Fed that might look, sound and behave very differently from the one investors have grown used to over the past decade and a half.”
By CHRISTOPHER RUGABER, Associated Press Economics Writer
WASHINGTON (AP) — Kevin Warsh has sought the job of Federal Reserve chair, off and on, since President Donald Trump first considered him for the position nearly a decade ago. Now that he is in line for the position, the enormity of the challenge ahead of him is clear.
To be effective, Warsh must gain the trust of at least three constituencies: the committee of Federal Reserve officials whose votes he will have to win to change interest rates; the financial markets, which can undermine his efforts to reduce borrowing costs if they think he is acting politically, and not least Trump, a former real estate developer with an exquisite sense of just how much difference a cut or increase in interest rates can make for those with large debts, whether they are businesses, households or a government.
“He has to thread that needle,” said Raghuram Rajan, an economist at the University of Chicago and former head of India’s central bank. “If you are seen as too pliable to the administration, you lose the support of the members of the (Fed), you become ineffective in creating consensus.”
Yet if he alienates the White House, Rajan said, Warsh runs the risk of putting the Fed back in the White House’s sights. Under Trump, the current chair Jerome Powell has come under relentless fire for not cutting interest rates as quickly as the president would like, and is now under criminal investigation by the Department of Justice.
Warsh may also face a bumpy confirmation process in the Senate, where two Republicans have already said they will oppose his nomination unless the criminal investigation is resolved.
And there may be even more drama ahead: Powell, as part of the Fed’s complex structure, could remain on the Fed’s governing board, as well as its rate-setting committee, even after his term as chair ends in May. That would leave Warsh facing a situation no Fed chair has dealt with in 80 years: A former chair potentially acting as a counterweight to the new leader of the Fed.
President Trump said Friday he is nominating Kevin Warsh to serve as the next chair of the Federal Reserve Board, filling a powerful economic policy role as the president pushes for lower interest rates.
Warsh was a member of the Fed’s board for five years starting in 2006, when former President George W. Bush named him to the central bank right before the financial crisis. In recent years, he has worked with billionaire investor Stanley Druckenmiller and held academic positions, including at the Hoover Institution.
in this Dec. 11, 2014 photo, Kevin Warsh speaks to the media about his report on transparency at the Bank of England, in London.
Alastair Grant / AP
If confirmed by the Senate, Warsh will helm a Federal Reserve that has faced months of intense pressure from Mr. Trump to dramatically slash rates — a move that could boost economic growth, but at the risk of sparking higher inflation. The Fed has lowered rates three times since September, most recently on Dec. 10, but Fed officials indicated in a projection earlier this month that they expect just one cut this year.
Warsh suggested earlier this year he’s open to lower interest rates, and he’s been deeply critical of the Fed’s handling of inflation in recent years, arguing the central bank has a “credibility crisis” and is in need of “regime change.” But he has also called it “essential” that the Fed maintain its independence over monetary policy.
Warsh was picked to replace outgoing Federal Reserve Chair Jerome Powell, who has drawn Mr. Trump’s ire for the Fed’s perceived slow pace of lowering rates. The president has called Powell a “dumb guy,” a “stubborn mule” and “Mr. Too Late,” and has mused about firing him.
Then, in a surprise video announcement earlier this month, Powell said the Fed had received subpoenas threatening him with criminal charges over a pricey project to renovate the central bank’s D.C. headquarters. Powell argued the investigation was part of an attempt to intimidate the Fed for its interest rate decisions, undermining its independence. The White House said Mr. Trump didn’t direct the Justice Department to issue the subpoenas.
Powell was initially appointed Fed chair by Mr. Trump in 2018, and was named to a second four-year term by former President Joe Biden.
In an opinion piece earlier this year, economist Kenneth Rogoff said Warsh is “highly regarded” but “even more hawkish than Powell,” meaning he tends to support higher interest rates.
The discord over Powell could make it more difficult to confirm Warsh. Several Senate Republicans sharply criticized the Justice Department’s subpoenas, with Sen. Thom Tillis of North Carolina vowing to oppose all Fed nominees “until this legal matter is fully resolved.”
Some Fed-watchers also think the subpoenas might make Powell more likely to stay on the Federal Reserve’s seven-member board as a rank-and-file member after his term as chair ends in May. Most Fed chairs have resigned from the board after they’re no longer the boss, but Powell can remain a board member until early 2028, diluting Mr. Trump’s influence.
How interest rates are determined
Target interest rates are technically set not by the Fed chair, but instead by a 12-member panel called the Federal Open Market Committee. The chair has historically wielded a great deal of influence over the committee’s decision and helped build consensus.
When setting rate targets, the Fed faces a balancing act between its dual goals of keeping inflation low and employment levels high. In 2022 and 2023, the Fed hiked interest rates from near 0% to a decades-long high, aiming to stem the worst inflation in around 40 years.
Since then, the central bank has lowered rates at a slow clip, cutting by a percentage point in late 2024, leaving them steady for most of 2025 and cutting by 0.75 percentage points since September. It kept the benchmark rate unchanged in its most recent meeting earlier this week.
The Fed has suggested it wants to move cautiously due to uncertain economic conditions. Inflation has fallen significantly since its 2022 peak but remains above the Fed’s 2%-per-year target, and the job market has cooled off despite the unemployment rate remaining fairly low. Powell has also warned that Mr. Trump’s tariffs are contributing to inflation.
Mr. Trump has openly pushed back against this strategy, and has made no secret of his desire for the next Fed chair to move more quickly on cutting rates.
“I’m looking for somebody that will be honest with interest rates,” he told reporters on Dec. 10 when asked about the search for a new chair. “Our rates should be much lower.”
The president has long asserted that the Fed should take his views into account. Mr. Trump said on Dec. 12 that “my voice should be heard” on rate-setting decisions, arguing he has strong instincts because of his business background.
“I’ve made a lot of money, I’ve been very successful, and I think my role should be at least that of recommending,” the president said. “They don’t have to follow what I say.”
Mr. Trump has also tried to fire Fed board member Lisa Cook, accusing her of mortgage fraud, though the courts have left Cook in place while her lawsuit seeking to reverse the firing proceeds. Under federal law, members of the Fed board can only be fired for cause.
The Fed has a longstanding history of acting independently from the executive branch. Experts believe the Fed’s ability to set interest rates on its own gives the central bank credibility and eases fears that it is motivated by politics. And some economists worry that a loss of independence could lead to higher inflation in the long run because presidents may be tempted by the politically popular short-term benefits of low interest rates, like a hotter economy.
Asked on Dec. 10 if he pushed finalists for the Fed chair job to pledge to lower rates, Mr. Trump said: “No. I’ll be asking questions and I’ll be able to figure it out.”
President Trump says he’ll nominate Kevin Warsh to serve as the next Federal Reserve chairman with current Fed Chair Jerome Powell’s term expiring in May. Powell has faced ongoing attacks from Mr. Trump, who nominated Powell to the role during his first term. CBS News business analyst Jill Schlesinger explains what to know.
President Trump’s move to nominate Kevin Warsh to replace Jerome Powell as Federal Reserve chair is likely to be viewed as a safe choice on Wall Street, elevating a former Fed official with well-established views on inflation.
Powell, who has led the Fed since February 2018 after being nominated for the top role by Mr. Trump during his first term as president, is set to step down in May 2026. In his second term, however, Mr. Trump has grown increasingly critical of Powell, regularly disparaging the Fed chief and pressing him to lower interest rates.
Warsh, 55, served as a Federal Reserve governor — one of seven officials who guide the central bank’s policy decisions — from 2006 through 2011, a period that includes the deep recession that followed the 2008 financial crisis.
In recent years, Warsh has grown increasingly critical of the Fed, arguing that the institution has become excessively focused on backward-looking economic data rather than anticipating changes, Deutsche Bank analysts said in a December 15 report. Still, Warsh has held hawkish views, meaning that he has emphasized the importance of fighting inflation, leaning toward keeping interest rates higher rather than cutting, experts note.
Trump’s nomination of Warsh is “one of the better outcomes for investors compared to the other contenders that had been in the running,” said Stephen Brown, deputy chief North America economist at Capital Economics, in a note to investors.
“Warsh’s long-running hawkish views should help to counteract concerns that he might morph into a full-blown Trump stooge,” he added.
In a November Wall Street Journal opinion piece, Warsh said the Fed’s “bloated balance sheet” has contributed to the economic malaise affecting many Americans, allowing borrowing to be “too easy” for Wall Street while “credit on Main Street is too tight.”
Kevin Warsh during the International Monetary Fund (IMF) and World Bank Spring meetings at IMF headquarters in Washington, D.C. on April 25, 2025.
Tierney L. Cross / Bloomberg via Getty Images / Tierney L CROSS
Aligned with Trump on interest rates
The Federal Reserve raises and lowers its benchmark interest rate as necessary to control inflation and support job growth — a mission central bank officials have long said requires insulating the Fed from political pressure.
Warsh has recently argued for lower interest rates, a view that aligns with Mr. Trump’s push for the Fed to ease borrowing costs.
“On policy decisions, Warsh’s recent comments suggest he could support lower policy rates, possibly counterbalanced by a smaller balance sheet,” the Deutsche Bank analysts said.
The Fed held rates steady at its Jan. 28 meeting, marking the central bank’s first pause after three consecutive cuts. Powell cited the U.S. economy’s strong growth and a stabilization in the labor market as reasons that the majority of the 12-person Federal Open Market Committee voted to keep its benchmark rate unchanged at between 3.5% and 3.75.%.
Mr. Trump criticized the decision on Thursday, writing on social media, “The Fed should substantially lower interest rates, NOW!”
To be sure, Warsh’s view wouldn’t necessarily dictate Fed policy, given that the Fed chair doesn’t set interest rates unilaterally. Rather, decisions on the federal funds rate, which affects borrowing costs for consumers and businesses, are set by a majority vote among the 12 members of the Federal Open Market Committee (FOMC).
FOMC members are also likely to signal to Wall Street that the central bank remains insulated from political pressure after a change in Fed leadership, reducing the odds of a sharp shift in monetary policy, Deutsche Bank said.
In the orbit of billionaires
Warsh, a graduate of Stanford University and Harvard Law School, went to work on Wall Street at Morgan Stanley after getting his law degree. He worked in mergers and acquisitions at the investment bank.
In 2002, Warsh joined President George W. Bush’s administration, where he worked in the National Economic Council. The president tapped him to serve on the Fed board of governors in 2006, making Warsh the youngest person ever to hold the position.
Since leaving the Fed in 2011, Warsh has worked for think tanks such as the conservative-leaning Hoover Institution and has also taught at Stanford Business School.
More recently, Warsh has worked with billionaire investor Stanley Druckenmiller, whose estimated $11 billion net worth stems from his work at hedge funds such as George Soros’ Quantum Fund.
In 2011, Druckenmiller appointed Warsh to serve as a partner at the investor’s Duquesne Family Office, where Warsh told Barron’s that he oversees the billionaire’s “small nest egg.”
Warsh is also married to a billionaire: cosmetics heiress Jane Lauder, whose net worth is estimated at $2.5 billion by Forbes.
In a July interview with CNBC, Warsh expressed optimism about the Trump administration’s economic policies, as well as the potential for artificial intelligence to boost business productivity.
“AI is going to make everything cost less, and the U.S. could be the big winner,” he said. “If I were the president, what I would be worried about is a central bank that doesn’t see any of that — a central bank that is stuck with models from 1978.”
U.S. Treasury Secretary Scott Bessent on Wednesday touted the benefits of the Trump administration’s new savings program for U.S. children, telling “CBS Saturday Morning” co-host Kelly O’Grady that the “Trump Accounts” could serve as “a rainy day fund” when those kids reach adulthood.
The program, created under the Republicans’ “big, beautiful bill” tax and spending law, calls for the federal government to start tax-preferred investment accounts for about 25 million children born between Jan. 1, 2025, and Dec. 31, 2028. The U.S. will seed each account with $1,000, which will be invested in the stock market.
“You got $1,000 coming from the government that’s going to be invested into an index fund,” Bessent said, adding that “even if your child doesn’t get $1,000 from the government, you can contribute …in tax free. And we’re going to have employers who are contributing.”
Philanthropists Michael and Susan Dell have pledged to contribute $250 per child to many of the new accounts, while companies including Bank of America and JPMorgan Chase announced Wednesday that they’ll also chip in $1,000 to accounts opened by the financial giants’ employees.
“So many Americans couldn’t even [handle a] $500 emergency,” Bessent told O’Grady. “So maybe people just put it away and it’s a rainy day fund. You know, it can be a component” of a bigger purchase or investment.
The accounts will remain invested for children until they turn 18, when they can tap the money to pay for qualified expenses, such as education, buying a home or starting a business.
Bessent said the accounts, which are limited to contributions of $5,000 per year per child, have drawn 600,000 signups this week alone. Families with children under 18 may also open accounts, although they won’t get the seed money from the federal government.
Closing the wealth gap?
Trump Accounts have raised some concerns that they could widen the U.S. wealth gap — which recently hit an all-time high — because higher-income families could stash the maximum of $5,000 per year in a child’s account, while lower-income households might struggle to contribute funds.
Bessent rejects such criticism, noting that the Dells’ $6.2 billion contribution won’t include the wealthiest 20% of U.S. zip codes.
“It shows how out of touch anyone who says that is, because if they say only $5,000, these are families — a huge number of families in America — wouldn’t have $500 [for] a medical emergency. So how can they say only $5,000? What the hell are they talking about? It doesn’t make any sense. It’s just because President Trump has sponsored it, they don’t agree with it.”
Bessent added that philanthropists who want to donate funds for a Trump Account can direct the money to lower-income parts of the U.S. “They can choose by zip codes. They can choose by school district. They can do it by economic quintiles,” he said.
The accounts are likely to also help educate Americans about investing, especially the 38% of households that don’t own stocks, Bessent added, noting the importance of financial literacy.
“For many Americans … Wall Street is this abstract notion,” Bessent told O’Grady. “All of a sudden they have participated for 18 years in the financial markets. So it’s a constant financial education.”
Addressing affordability
Asked about affordability issues that many Americans say they are facing, Bessent blamed the Biden administration for driving up inflation. He also credits President Trump for boosting wage growth, pushing down prescription drug costs and introducing tax cuts through the “big beautiful” bill.
“What we’re trying to do, we’re trying to control costs,” Bessent said. “I think inflation is going to be back toward the Fed target of 2%.”
Many Americans have negative views about the cost of living in the U.S., according to a December CBS News poll.
The Trump administration has introduced a flurry of proposals in recent weeks, in addition to the Trump Accounts, aimed at easing affordability pressures. They include promises to cap credit card interest rates at 10% and ban institutional investors from buying single-family homes.
Experts, however, have questioned whether these proposals will achieve their intended objectives.
Demanding Fed “accountability”
Bessent also touched on the independence of the Federal Reserve and defended the Department of Justice’s ongoing investigation into Federal Reserve Chair Jerome Powell, dismissing concerns that the probe could weaken the central bank’s traditional independence.
“I think that the message is that independence does not mean no accountability,” Bessent said. “I’ve been calling for the Fed to do an internal investigation on numerous things since last spring, and they’ve chosen not to do it.”
Earlier this month, the Justice Department served the central bank with grand jury subpoenas tied to a criminal investigation into Powell’s June 2025 testimony before a Senate committee regarding a project to renovate several Fed buildings in Washington, D.C.
Powell responded in a video message, calling the investigation a pretext for weakening the Fed’s independence in setting interest rates. Mr. Trump has already identified several candidates to replace the central bank chief when his term expires in May.
Bessent said Wednesday that the Fed must be “beyond reproach” in its dealings, characterizing it as the “most powerful, unappointed group in the U.S.”
Addressing the DOJ investigation, Bessent said the central bank should be held accountable for its actions.
“[The] president has great reverence for the Fed’s independence,” he said. “But independence does not mean no accountability.”
The Federal Reserve left interest rates untouched at its Open Market Committee meeting on Wednesday, the first time it hasn’t cut them since July.
In a statement after the meeting, the 12-member body said that while economic activity has been expanding at a solid pace, job growth has remained low, and inflation is “somewhat elevated.”
Two members appointed by President Trump — Stephen Miran and Christopher Waller — voted against the decision to leave the target range for the federal funds rate at 3.5% to 3.75% because they wanted another cut, while the rest voted in favor of it.
The Fed has a dual mandate to achieve maximum employment and keep inflation below 2%.
“Uncertainty about the economic outlook remains elevated,” the Fed said. “The Committee is attentive to the risks to both sides of its dual mandate.”
The Fed began cutting rates in September after the nation’s economic outlook began to soften. The housing industry has been eager for more cuts to help improve affordability, which has stymied the pace of home sales over the last couple years. Observers expect the Fed to cut rates at least 0.25% this year.
“While the Federal Reserve is maintaining interest rates in order to try to bring inflation levels closer to its target, uncertainties surrounding the economy remain elevated,” Cotality Chief Economist Selma Hepp said. “The job market remains a sticking point, even though the economy as a whole remains on solid ground. With tariffs continuing to impact pricing on so many consumer products, pressure will remain to find stronger solutions that would help lower the cost of everyday items for families.”
The Federal Reserve announced Wednesday that interest rates would remain unchanged, holding steady in its current range of 3.5% to 3.75%. CBS News business analyst Jill Schlesinger has more.
The Federal Reserve said Wednesday that it is leaving its benchmark interest rate unchanged, marking the central bank’s first pause after three consecutive rate cuts last year.
The Fed maintained its federal funds rate — what banks charge each other for short-term loans — in its current range of 3.5% to 3.75%. The decision matched expectations from Wall Street economists, according to financial data service FactSet.
The central bank is grappling with two potentially troubling economic trends: A softer labor market and an inflation rate that remains well above the central bank’s annual target of 2%. At the same time, the U.S. economy continues to expand at a fast pace, with the country’s third-quarter growth rising at a 4.4% annual rate, far outpacing economist forecasts.
“The Fed is likely on an extended pause with strong activity data and signs of stabilization in the labor market suggesting little need to take out further insurance,” said Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, in an email after the announcement.
In its Wednesday statement, the Federal Reserve cited a “solid pace” of economic activity and an unemployment rate that remains low. It noted that inflation “remains somewhat elevated.” Prices rose at a 2.7% annual pace in December, according to the latest Consumer Price Index.
The Federal Open Market Committee, the 12-person voting committee that sets the central bank’s rate decisions, wasn’t unanimous in its decision. Ten of the panel’s members, including Fed Chair Jerome Powell, voted to hold the benchmark rate steady, while Stephen Miran and Christopher Waller voted to lower the rate by 0.25 percentage points, the Fed said.
Today’s decision comes amid weeks of turmoil involving the Fed, including a Department of Justice investigation into Fed Chair Jerome Powell, a probe that Powell said is a pretext for weakening the Fed’s independence. The Supreme Court is also currently weighing whether to allow Fed Governor Lisa Cook to keep her job after Mr. Trump sought to fire her.
OTTAWA, Jan 28 (Reuters) – The threat to the independence of the U.S. Federal Reserve is boosting economic uncertainty around the world, Bank of Canada Governor Tiff Macklem said on Wednesday in his strongest comments to date on the outlook for the Fed.
U.S. President Donald Trump has repeatedly criticized Fed Chairman Jerome Powell, demanding he cut interest rates. He is seeking to remove Fed governor Lisa Cook while the Department of Justice has threatened Powell with a criminal indictment.
Macklem made his remarks to reporters after keeping rates on hold amid what he called unusually high levels of uncertainty.
“I think the threat to the independence of the central bank in the United States is one thing that has sort of been contributing to this sense of uncertainty,” he said.
“The Federal Reserve is the biggest, most important central bank in the world, and we all need it to work well. A loss of independence of the Fed would affect us all,” he added, saying Canada would be particularly affected given its close economic links to the United States.
Macklem was one of the central bank heads who earlier this month issued a joint statement backing Powell. Last September, Macklem said Trump’s attempts to pressure the Fed were starting to hit markets.
Keeping central banks independent lets them take “difficult decisions” that benefit citizens, Macklem said.
“He is doing a good job at leading the Fed based on evidence, based on facts … I hope it stays that way. That’s going to be important for everyone,” he said.
Bank of Canada senior deputy governor Carolyn Rogers said a strong Fed benefited virtually every economy in the world because it kept markets and inflation stable.
“Those things contribute to predictability and less sort of volatility in rates … there are a lot of reasons for having a strong, independent Fed,” she told the press conference.
(Reporting by David Ljunggren. Editing by Jane Merriman)
President Donald Trump was riding high early this month after the U.S. military pulled off a stunning raid that captured dictator Nicolas Maduro.
But just three weeks later, he has run into significant resistance on multiple fronts, challenging his economic, foreign relations, and immigration policies. The second deadly shooting in Minnesota at the hands of federal agents this weekend has unleashed broad outrage that could signal a tipping point.
“Starting to feel like we are in the midst of a historic hinge moment here,” political scientist Lee Drutman, a senior fellow at the New America think tank, posted on X.
Trump appeared to acknowledge his new situation, telling the Wall Street Journal on Sunday night that the administration is “reviewing everything” about the shooting and indicated willingness to eventually withdraw immigration officers from Minneapolis.
A retreat could hint at an eroding base after Trump enjoyed widespread support among Republicans for much of 2025 even as his aggressive tariffs shocked businesses and trading partners, including close U.S. allies.
But cracks emerged late in the year as November elections highlighted the affordability crisis and Congress ordered the release of the Epstein files on near-unanimous votes. Heavy redactions and the Justice Department’s failure to disclose all of the records by the deadline added to the tension.
The conversation quickly changed when Maduro was toppled as Trump basked in the U.S. military’s proficiency and his new ability to call the shots in Venezuela, despite grumblings that another foreign intervention strayed from his “America first” motto.
The Fed
Then two weeks ago, Federal Reserve Chairman Jerome Powell issued an unprecedented video statement that revealed he was facing a Justice Department criminal investigation related to a renovation project at the central bank’s headquarters.
It capped a long-running feud between Powell and Trump, who has repeatedly demanded that rates should be lower.
The backlash was swift as lawmakers sought to protect the Fed’s independence. Republican Sen. Thom Tillis vowed to block any nominations to the Fed, including for Powell’s replacement, until the case was resolved.
Other Republicans rallied around Powell, marking another divergence from Trump’s earlier lockstep support. And after weeks of teasing that he would soon nominate a new Fed chair, Trump has yet to officially offer a name.
Still, the resounding success of the Venezuela operation was continuing to prop up his confidence, and Trump threatened Iran while promising to help protesters taking on the regime.
Greenland
But then the bravado extended to Greenland. After flirting with the idea of taking over the semi-autonomous Danish territory in his first term and last year, the insistence that the island belong to the U.S. became more urgent after Venezuela.
Several European countries, all NATO allies, then deployed troops to Greenland, ostensibly to show Trump that they were willing to secure it from China and Russia, which he warned were major threats.
But that angered Trump, who announced tariffs against the NATO countries unless they supported his bid to take over Greenland. It triggered an existential crisis for the trans-Atlantic alliance as Trump had also refused to rule out using the military.
At the World Economic Forum this past week in Davos, furious rounds of diplomacy ensued to pull Trump back from the brink of smashing the nearly 80-year-old defense pact. Republicans like Tillis also voiced support for NATO.
Canada and Europe held firm on protecting Greenland’s sovereignty, contrasting with a less combative approach in last year’s tariff battles, which yielded a lopsided U.S.-EU trade pact that’s heavily favors Trump.
On Wednesday, he backed down, saying he will not impose the NATO tariffs and claimed to have a “framework” of a deal that grants the U.S. full access to Greenland. He later said the U.S. is negotiating sovereignty over parts of Greenland that host American military bases.
Minnesota
Fury had been building for weeks after Trump surged thousands of federal agents to the state to carry out his immigration crackdown.
Saturday’s shooting was the third one in Minnesota this month, and the second deadly one. It also followed days of reports about immigration officers detaining young children, arresting U.S. citizens, and forcibly entering homes without judicial warrants.
Video evidence also clearly contradicted the Trump administration’s claim that Alex Pretti, who was a nurse in a veterans hospital, threatened the Border Patrol before being shot.
Silicon Valley workers expressed their anger, and Minnesota-based CEOs pleaded for de-escalation. Democrats in Congress stiffened their opposition to an appropriations bill for the Department of Homeland Security. Meanwhile, more Republicans have started to voice some uneasiness with federal agents’ tactics and are demanding congressional hearings.
“I think the death of Americans, what we’re seeing on TV, it’s causing deep concerns over federal tactics and accountability,” Oklahoma Gov. Kevin Stitt told CNN on Sunday. “Americans don’t like what they’re seeing right now.”
Phil Scott, the Republican governor of deep-blue Vermont, took the rhetoric further. In a post on X, he said Trump should pause the immigration operations to reset the focus on criminals. He also urged Congress and the courts to “restore constitutionality” in the absence of presidential action.
“It’s not acceptable for American citizens to be killed by federal agents for exercising their God-given and constitutional rights to protest their government,” he wrote. “At best, these federal immigration operations are a complete failure of coordination of acceptable public safety and law enforcement practices, training, and leadership. At worst, it’s a deliberate federal intimidation and incitement of American citizens that’s resulting in the murder of Americans.”
WASHINGTON (AP) — The Supreme Court for the past year has repeatedly allowed President Donald Trump to fire heads of independent agencies, but it appears to be drawing a line with the Federal Reserve.
The court has signaled for months that it sees the Fed in a different light. It has said that the president can fire directors of other agencies for any reason, but can remove Fed governors only “for cause,” which is often interpreted to mean neglect of duty or malfeasance.
Last year, the court allowed President Donald Trump to fire — at least temporarily — Gwynne Wilcox, a member of the National Labor Relations Board, and Cathy Harris, a member of the Merit Systems Protection Board, but it carved out a distinction for the Fed. The two officials had argued that if Trump could fire them, he could also fire members of the Fed’s board of governors.
“We disagree,” the court said then. “The Federal Reserve is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States.”
That is now being put to the test in a case in front of the Supreme Court involving Trump’s attempt to remove Fed governor Lisa Cook. On Wednesday during oral arguments, the court seemed inclined to keep Cook in her job.
Allowing Cook’s firing to go forward “would weaken, if not shatter, the independence of the Federal Reserve,” said Justice Brett Kavanaugh, one of three Trump appointees on the nation’s highest court.
But the court largely skirted a key issue: What, exactly, is the legal principle that protects the Fed, but not the other agencies?
Several legal experts say the justices are on shaky ground. The Fed, they argue, is similar in many ways to the Federal Trade Commission or the National Labor Relations Board, agencies Congress intended to be independent but whose officials Trump has been able to fire without pushback from the high court.
“There’s no historical grounds for distinguishing the Fed from other independent agencies that Congress has designed,” said Jane Manners, a law professor at Fordham University. “The whole argument was premised on the idea that the Fed is different. They haven’t explained exactly why.”
Peter Conti-Brown, a professor of financial regulation at the University of Pennsylvania, added, “I’ll say as a legal scholar and as a historian I think that differentiation is hocus pocus.”
Just last month, the court signaled in a separate oral argument that it would likely allow Trump to fire FTC Commissioner Rebecca Slaughter. The conservative majority on the court also suggested it would overturn a 90-year-old precedent that sharply limited the president’s ability to fire top officials at independent agencies.
Chief Justice John Roberts and many of his colleagues support the “unitary executive” theory, which holds that the president should have full sway over the staffing of agencies in the executive branch.
Agency directors, like Slaughter, “are exercising massive power over individual liberty and billion-dollar industries” without being accountable to anyone, Kavanaugh said at the December oral argument.
With the Federal Reserve, however, the Supreme Court’s conservative justices have applied a different view: that the Fed’s monetary policy — the setting of short-term interest rates and management of the money supply — historically hasn’t been overseen by the executive branch.
Some legal experts have likewise drawn a distinction between the Fed and other independent agencies. In a brief filed in the Cook case, Aaron Nielson, a law professor at the University of Texas, and formerly a top lawyer in Texas government, wrote that, “Whereas the modern FTC indisputably exercises executive power, the Fed’s core function is monetary policy, which need not and often does not require executive power.”
The First and Second Banks of the United States were nationwide banks that were the closest the United States had to a central bank in the first few decades after the nation’s founding, and both “conducted early monetary policy,” Nielson wrote, but weren’t executive branch agencies.
But Lev Menand, a law professor at Columbia University and author of a book about the Fed, argued that the Fed does exercise executive power when it regulates the banking system. And monetary policy, when it adjusts the money supply, is part of that regulation, he said.
There are also only three types of government authority, Menand argues: legislative, executive, and judicial, and the Fed belongs in the executive category.
“There is no fourth type of government power,” Menand said. “There is no other place to locate the Fed.”
Still, the justices mostly avoided addressing why the Fed is different during Wednesday’s oral argument, in part, Menand noted, because neither side pushed it. Cook’s lawyers had no reason to question a distinction that appeared to favor them.
And even the government’s own top Supreme Court lawyer, D. John Sauer, acknowledged that Trump could only fire Cook “for cause,” while in the other cases the White House had sought to remove officials for any reason, including policy differences. The distinction made it harder for the White House to argue that Cook should immediately be removed from office.
“There is a long tradition of having this exercise of monetary policy be exercised independent of executive influence,” Sauer said. “And we don’t dispute that that’s what Congress was doing.”
Paul Clement, one of Cook’s lawyers, told the justices, “it’s kind of why this case is, I think, problematic for the government because they could have come in here and said, you know, Fed, schmed, it’s not that different. This is just like the FTC.”
Instead, Clement added, “they come in and say, no, we’re going to accept that the Fed is different, at least for purposes of this case.”
The Supreme Court will initially rule on the narrow question of whether Cook can remain in her position while the larger dispute over her firing is fought in the lower courts. Still, at some point it may have to issue more comprehensive rulings that could include a fuller explanation of why the justices see the Fed as different.
For now, the Fed’s size and impact on the financial markets may be offering it a measure of protection.
“I don’t mean to denigrate any other agency, but there’s a reason that monetary policy has been treated differently, for lo these many years,” Clement said. “And there’s a reason that the markets watch the Fed a little more closely than they watch really any other agency of government.”
The national average rate for second mortgage products, such as home equity loans and lines of credit, continues to hold close to multi-year lows. The prime rate, a benchmark for home equity lending, isn’t expected to move lower anytime soon, as the Federal Reserve ponders its next interest rate move.
According to Curinos data, the average HELOC rate is 7.25%, down 19 basis points from last month. The national average rate on a home equity loan is 7.56%, three basis points lower than one month ago.
Homeowners have an impressive amount of value tied up in their houses — nearly $34 trillion at the end of the third quarter of 2025, according to the Federal Reserve.
With mortgage rates remaining in the low-6% range, homeowners are unlikely to let go of their primary mortgage anytime soon, so selling a house may not be an option. A cash-out refinance might not be workable either. Why give up your 5%, 4% — or even 3% mortgage?
Accessing some of that value with a use-it-as-you-need-it HELOC or lump-sum home equity loan can be an excellent alternative.
Home equity interest rates are calculated differently from mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which is 6.75% following the last Federal Reserve rate cut on December 10. If a lender added 0.75% as a margin, the HELOC would have a variable rate of 7.50%.
A home equity loan may have a different margin, because it is a fixed-interest product.
Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. Shop a few lenders to find your best interest rate offer.
With three rate cuts from the Federal Reserve in 2025, the prime rate has fallen to 6.75%. As a result, home equity lenders have been repricing their products.
Today, FourLeaf Credit Union is offering a HELOC APR (annual percentage rate) of 5.99% for 12 months on lines up to $500,000. That’s an introductory rate that will convert to a variable rate at a later date.
As the offer proves, lenders will not only lower their adjustable rates, but their introductory rates too, following the Fed’s lower-rate policy.
When shopping for lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity.
The best home equity loan lenders may be easier to find, because the fixed rate you earn will last the length of the repayment period. That means just one rate to focus on. And you’re getting a lump sum, so no draw minimums to consider.
Rates vary significantly from one lender to the next. You may see rates from 6% to as much as 18%. It really depends on your creditworthiness and how diligent you are as a shopper. Currently, the national average for a HELOC is 7.25%, and for a home equity loan it’s 7.56%.
Interest rates fell for most of 2025. They will likely keep dipping lower this year. So yes, it’s a good time to get a second mortgage. And with a HELOC or a HEL, you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Or just about anything else.
If you withdraw the full $50,000 from a line of credit on your home and pay a 7.50% interest rate, your monthly payment during the 10-year draw period would be about $313. That sounds good, but remember that the rate is usually variable, so it changes periodically, and your payments will increase during the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are best if you borrow and repay the balance within a much shorter period of time.
The Trump administration is taking aim at three major pillars of the U.S. financial system — the Federal Reserve, the credit card industry and the housing market — that together wield enormous influence over Americans’ finances.
The efforts, announced separately over the past week, are tied to President Trump’s push to lower borrowing costs as consumers grapple with inflation and affordability pressures. Specifically, Mr. Trump has floated a ban on institutional investors buying single-family homes, and also capping credit card interest rates at 10% for one year. The Department of Justice launched an investigation into Federal Reserve Chair Jerome Powell, a probe that Powell said is a pretext for weakening the Fed’s independence in setting interest rates.
Although experts note that such measures could reduce borrowing costs for everything from mortgages to credit cards, economists warn they also risk backfiring — potentially reigniting inflation, restricting access to credit and undermining confidence in the U.S. financial system.
“Increasing affordability is a worthy goal of this administration, but none of the policies on the table are going to achieve that,” said Nick Anthony, a policy analyst at the nonpartisan Cato Institute, where he focuses on monetary policy.
He added, “In fact, most of them are likely to hurt consumers more than they will help them, whether it be price controls, intervening in the Federal Reserve, or intervening in the housing market. All of these interventions are more likely to distort the market than actually help it.”
In a statement to CBS News, White House spokesman Davis Ingle said Mr. Trump will unveil more details about his plans for making homes more affordable at the annual World Economic Forum in Davos, Switzerland, which starts on January 19.
“President Trump is committed to making it easier and more affordable to achieve the American Dream of homeownership by eliminating unnecessary red tape, increasing supply and lowering costs. President Trump is working tirelessly to undo the severe damage the Biden Administration inflicted on the American people through high prices,” Ingle said.
The White House referred questions about the Powell investigation to the Justice Department, which didn’t respond to a request for comment.
Risks of targeting Powell
President Trump has grown increasingly critical of Powell, regularly pressing him to lower interest rates and questioning his economic judgment.
Powell does not set rates alone. As a member of the Federal Open Market Committee, he is one of 12 officials whose majority vote determines whether the Fed cuts, raises or holds interest rates steady.
The latest effort by the Trump administration to target Powell comes after the Fed lowered its benchmark rate three times since September, with Powell citing easing inflation and a slowing labor market as justification for the cuts. Powell has long stressed that the Fed bases its rate decisions on economic data, emphasizing the central bank’s traditional independence from political influence.
On Sunday, Powell linked the Justice Department to efforts to undermine the Fed’s independence when setting interest rates.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” Powell said in a statement.
Research has found that countries where central banks are more vulnerable to political influence have suffered from economic problems such as runaway inflation.
It’s important that “the Federal Reserve can act as it sees fit, and it can make the decisions that it believes to be right without fearing repercussions,” Cato’s Anthony said. “And when you do fear those repercussions, that’s when we see situations where there’s hyperinflation abroad, because the only concern was making sure that the leader, whether elected or authoritarian, was presented in the best light possible.”
Borrowing costs could decline if the White House is successful in pressuring Fed officials to lower interest rates, but the flip side could be surging inflation, noted Nigel Green of investment advisory firm deVere Group.
Any legal action against Powell also could undermine investor confidence in U.S. monetary policy, weakening the U.S. dollar as the world’s reserve currency and destabilizing the bond market, Wall Street analysts said.
“The Fed must remain independent in order for the central bank to remain effective and — this is important — for the integrity of the U.S. dollar and the all-important Treasury markets to remain the world’s benchmarks,” said Mark Malek, CIO at Siebert Financial, in an email.
Unintended consequences?
Americans have about $1.2 trillion in outstanding credit card debt, with lenders charging an average APR of about 23.8%, according to LendingTree.
On Friday, Mr. Trump called for a one-year cap of 10% on credit card rates, writing in a social media post that he “will no longer let the American Public be ‘ripped off’ by Credit Card Companies.”
Cutting credit card rates by more than half could save Americans $100 billion in interest annually, Vanderbilt University researchers said in a September report.
But a 10% cap could also have adverse consequences, experts added. Credit card companies would likely reduce credit for more than 80% of customers, with almost every account for people with credit scores below 740 closed or severely restricted to offset the reduced fees from a 10% cap, according to an analysis from the Electronic Payments Coalition, a financial industry trade group.
Credit card spending also accounts for 30% to 40% of total annual consumer spending, so tighter credit for lower-income Americans could reduce overall consumer spending by roughly 5% — a significant economic hit, according to Morgan Stanley analysts.
Housing’s biggest problem
Lastly, Mr. Trump is tackling housing affordability at a time when homeownership is increasingly out of reach for many Americans.
His approach aims to tackle two core issues with the housing market — higher mortgage rates and competition for homes — by directing the federal government to purchase $200 billion in mortgage bonds and banning institutional investors from buying single-family homes.
On Friday, the average rate for a 30-year mortgage dipped below 6%, its lowest level in three years. But experts said the strategies fail to address the housing market’s biggest problem — a lack of available homes that stems from underbuilding after the Great Recession.
“The affordability crisis is fundamentally a supply problem, and meaningful relief requires adding homes, both through new construction or through inventory gains in chronically constrained markets, particularly in the Northeast and Midwest,” said Realtor.com senior economist Jake Krimmel in an email.
For that reason, banning institutional investors from single-family home purchases “is unlikely to move the needle on affordability,” he concluded.
The lack of supply to meet demand from buyers is an issue that will take years to resolve, experts said.
To be sure, banning institutional investors could help reduce competition for homes in some markets. Institutional investors account for roughly 1% of total single-family housing stock, according to an August analysis by researchers at the American Enterprise Institute, a nonpartisan think tank. The study defined such investors as those owning at least 100 properties.
Investors are a bigger presence in some regions, with investors owning about 27% of single-family rental properties in Atlanta, The Hamilton Project at Brookings found in a 2023 study.
As of mid-2025, meanwhile, about 10% of home purchases were made by investors, with most them “mom-and-pop” buyers, according to Realtor.com said.
