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Tag: Federal Reserve

  • Appeals court rejects Trump’s bid to fire Fed Governor Lisa Cook

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    (CNN) — President Donald Trump cannot remove Lisa Cook from the Federal Reserve’s Board of Governors for now, a federal appeals court said in an emergency ruling Monday, just hours before the central bank’s two-day monetary policy meeting was set to kick off.

    The decision from the US Court of Appeals for the District of Columbia Circuit, split 2-1 along party lines, marks another defeat for the White House’s efforts to control the Fed and economic policy. Trump has sought to oust Cook over allegations of mortgage fraud, though Cook has not been charged with any wrongdoing.

    The Federal Reserve Act specifies that presidents can only fire Fed governors “for cause,” and Trump has sought to leverage allegations of mortgage fraud as a sufficient cause for firing.

    “In this court, the government does not dispute that it failed to provide Cook even minimal process—that is, notice of the allegation against her and a meaningful opportunity to respond—before she was purportedly removed,” Judges Bradley Garcia and Michelle Childs wrote in their opinion.

    “The district court issued its preliminary injunction after finding that Cook is likely to succeed on two of her claims: her substantive, statutory claim that she was removed without ‘cause’… and her procedural claim that she did not receive sufficient process prior to her removal in violation of the Due Process Clause of the Fifth Amendment,” Garcia and Childs wrote.

    In his dissenting opinion, Judge Gregory Katsas wrote that “President Trump removed Cook for cause.”

    Cook’s attorneys did not respond to CNN’s request for comment following the ruling.

    White House spokesperson Kush Desai told CNN in a statement on Tuesday: “The President lawfully removed Lisa Cook for cause. The Administration will appeal this decision and looks forward to ultimate victory on the issue.”

    The court’s decision comes just weeks after Trump said he fired Cook, who responded by suing Trump based on “an unsubstantiated allegation” and that her firing violated her due process rights. If Trump is ultimately successful in removing Cook, it would mark the first time a Fed governor was fired by a president in the central bank’s 111-year history.

    At the same time the court ruled Trump couldn’t immediately fire Cook, Stephen Miran, Trump’s nominee to fill a separate seat on Fed’s Board, was confirmed by the Senate.

    Trump’s push to get the Fed to lower rates

    The Fed is widely expected to lower interest rates at the conclusion of their two-day policy meeting this week. However, it’s an open question how big the cut will be at this and upcoming meetings.

    Meanwhile, Trump’s push to oust Cook, a Biden appointee and the first Black woman to serve on the Fed’s Board, comes amid a campaign to get the central bank to lower interest rates.

    As part of that effort, Trump has tried unsuccessfully to bully Fed Chair Jerome Powell into lowering rates, calling him a “numbskull,” a “major loser” and “a very stupid person” for keeping rates elevated. He also threatened to fire him, but more recently has said he’d allow Powell to stay on until his term as chair ends in May.

    While seven out of 12 members of the Fed’s interest rate-setting committee are nominated by the president and confirmed by members of the Senate, the central bank for decades has functioned as an independent institution.

    Trump’s attempt to fire Cook raises serious concerns about the degree of independence the Fed will have moving forward.

    “President Trump’s attempted removal of Governor Lisa Cook, if allowed, would mark an immediate end to that history,” Cook’s attorneys wrote in a filing on Saturday. Economists have expressed similar concerns, arguing that the US economy’s success has been predicated on having an independent central bank, which helps instill confidence in domestic and foreign investors.

    The Fed was designed to be independent from politicians specifically so it could focus on economic data – and not political considerations – in achieving its dual mandate to keep price increases in check while supporting the job market.

    Politicians often prefer lower interest rates, aiming to boost stock prices and make it cheaper for people to borrow money, both popular moves among voters. But lower interest rates risk igniting price pressures. On the other hand, leaving rates too high could overly restrict spending and hiring, hurting the economy.

    Cook and her attorneys have argued that Trump’s use of “cause” is an attempt to get around a Supreme Court decision from earlier this year that appeared to limit the president’s ability to remove Federal Reserve governors.

    Trump, Cook argued in court papers, wants to redefine the meaning of “cause” in a way that would allow him to fire any board member “with whom he disagrees about policy based on chalked up allegations.”

    “President Trump does not have the power to unilaterally redefine ‘cause’ – completely unmoored to caselaw, history, and tradition – and conclude, without evidence, that he has found it,” Cook’s attorneys wrote.

    The Trump administration called Cook’s claims to stay on the board “meritless,” adding that concerns over whether Cook misrepresented her finances pose concerns as to “whether Cook can be trusted to act with forthrightness, care, and disinterest in managing the U.S. money supply.”

    This story has been updated with additional context and developments.

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    Bryan Mena, Dan Berman and CNN

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  • Appeals court rejects Trump’s bid to oust Lisa Cook from the Fed ahead of crucial interest rate decision | Fortune

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    An appeals court ruled Monday that Lisa Cook can remain a Federal Reserve governor, rebuffing President Donald Trump’s efforts to remove her just ahead of a key vote on interest rates.

    The Trump administration is expected to quickly turn to the Supreme Court in a last-ditch bid to unseat Cook. The Fed’s next two-day meeting to consider its next interest rate move begins Tuesday morning. And Cook’s lawsuit seeking to permanently block her firing must still make its way through the courts.

    The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed’s seven-member governing board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the agency’s 112-year history.

    Separately, Senate Republicans on Monday confirmed Stephen Miran, Trump’s nominee to an open spot on the Fed’s board. Barring any last-minute intervention from the Supreme Court, the Fed’s interest rate setting committee will meet Tuesday and Wednesday with all seven governors and the 12 regional bank presidents.

    Twelve of those 19 officials will vote on changing the central bank’s short-term rate: All seven governors plus five regional presidents, who vote on a rotating basis.

    Chair Jerome Powell signaled in a high-profile speech last month the Fed would likely cut its key rate at this meeting, from about 4.3% to 4.1%. Other borrowing costs, such as mortgage rates and car loans, have already declined in anticipation of the cut and could move lower.

    Trump sought to fire Cook Aug. 25, but a federal judge ruled last week that the removal was illegal and reinstated her to the Fed’s board. Trump appointee Bill Pulte has accused Cook of mortgage fraud because she appeared to claim two properties as “primary residences” in July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home. Cook has denied the charges.

    In a 2-1 decision, the appeals court found that Cook’s due process rights were violated because the administration did not give her a formal opportunity to respond to the charges.

    The attempt to fire Cook is seen by many legal scholars as a threat to erode the Fed’s longtime political independence. Economists prefer independent central banks because they can do unpopular things like lifting interest rates to combat inflation more easily than elected officials.

    Many economists worry that if the Fed falls under the control of the White House, it will keep its key interest rate lower than justified by economic fundamentals to satisfy Trump’s demands for cheaper borrowing. That could accelerate inflation and could also push up longer-term interest rates, such as those on mortgages and car loans. Investors may demand a higher yield to own bonds to offset greater inflation in the future, lifting borrowing costs for the U.S. government and the entire economy.

    Separately, Miran chairs the White House’s Council of Economic Advisers and said earlier this month he would take unpaid leave but otherwise keep his job while serving on the Fed’s board. It will be the first time in decades that an executive branch official has served at the Fed.

    Miran has been appointed to finish a term that expires in January, but he could remain in the seat if no replacement is chosen.

    Cook has denied any wrongdoing and has not been charged with a crime. According to documents obtained by The Associated Press, Cook did specify that her Atlanta condo would be a “vacation home,” according to a loan estimate she obtained in May 2021. And in a form seeking a security clearance, she described it as a “2nd home.” Both documents appear to undercut the administration’s claims of fraud.

    Last week, U.S. District Court Judge Jia Cobb ruled that the administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook did not join the Fed’s board until 2022.

    In their emergency appeal, Trump’s lawyers argued that even if the conduct occurred before her time as governor, her alleged action “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”

    Trump has repeatedly attacked Powell and the other members of the Fed’s interest-rate setting committee for not cutting the short-term interest rate they control more quickly. Trump has said he thinks it should be as low as 1.3%, a level that no Fed official and few economists support.

    Cook is the first Black woman to serve as a Fed governor. She was a Marshall Scholar and received degrees from Oxford University and Spelman College, and prior to joining the board she taught at Michigan State University and Harvard University’s Kennedy School of Government.

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    Christopher Rugaber, The Associated Press

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  • Senate approves White House economist Stephen Miran to serve on Federal Reserve board

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    The Senate has approved one of President Donald Trump’s top economic advisers for a seat on the Federal Reserve’s governing board, giving the White House greater influence over the central bank just two days before it is expected to vote in favor of reducing its key interest rate.The vote to confirm Stephen Miran was largely along party lines, 48-47. He was approved by the Senate Banking Committee last week with all Republicans voting in favor and all Democrats opposed.Miran’s nomination has sparked concerns about the Fed’s longtime independence from day-to-day politics after he said during a committee hearing earlier this month that he would keep his job as chair of the White House’s Council of Economic Advisers, though would take unpaid leave. Senate Democrats have said such an approach is incompatible with an independent Fed.Senate Democratic Leader Chuck Schumer said ahead of the vote that Miran “has no independence” and would be “nothing more than Donald Trump’s mouthpiece at the Fed.”The vote was along party lines, with Alaska Sen. Lisa Murkowski the only Republican to vote against Miran.Miran is completing an unexpired term that ends in January, after Adriana Kugler unexpectedly stepped down from the board Aug. 1. He said if he is appointed to a longer term he would resign from his White House job. Previous presidents have appointed advisers to the Fed, including former chair Ben Bernanke, who served in president George W. Bush’s administration. But Bernanke and others left their White House jobs when joining the board.Miran said during his Sept. 4 hearing that, if confirmed, “I will act independently, as the Federal Reserve always does, based on my own personal analysis of economic data.”Last year, Miran criticized what he called the “revolving door” of officials between the White House and the Fed, in a paper he co-wrote with Daniel Katz for the conservative Manhattan Institute. Katz is now chief of staff at the Treasury Department.Miran’s approval arrives as Trump’s efforts to shape the Fed have been dealt a setback elsewhere. He has sought to fire Fed governor Lisa Cook, who was appointed by former President Joe Biden to a term that ends in 2038. Cook sued to block the firing and won a first round in federal court, after a judge ruled the Trump administration did not have proper cause to remove her.The administration appealed the ruling, but an appeals court rejected that request late Monday. Members of the Fed’s board vote on all its interest rate decisions, and also oversee the nation’s financial system.The jockeying around the Fed is occurring as the economy is entering an uncertain and difficult period. Inflation remains stubbornly above the central bank’s 2% target, though it hasn’t risen as much as many economists feared when Trump first imposed sweeping tariffs on nearly all imports. The Fed typically would raise borrowing costs, or at least keep them elevated, to combat worsening inflation.At the same time, hiring has weakened considerably and the unemployment rate rose last month to a still-low 4.3%. The central bank often takes the opposite approach when unemployment rises, cutting rates to spur more borrowing, spending and growth.Economists forecast the Fed will reduce its key rate after its two-day meeting ends Wednesday, to about 4.1% from 4.3%. Trump has demanded much deeper cuts.

    WASHINGTON —

    The Senate has approved one of President Donald Trump’s top economic advisers for a seat on the Federal Reserve’s governing board, giving the White House greater influence over the central bank just two days before it is expected to vote in favor of reducing its key interest rate.

    The vote to confirm Stephen Miran was largely along party lines, 48-47. He was approved by the Senate Banking Committee last week with all Republicans voting in favor and all Democrats opposed.

    Miran’s nomination has sparked concerns about the Fed’s longtime independence from day-to-day politics after he said during a committee hearing earlier this month that he would keep his job as chair of the White House’s Council of Economic Advisers, though would take unpaid leave. Senate Democrats have said such an approach is incompatible with an independent Fed.

    Senate Democratic Leader Chuck Schumer said ahead of the vote that Miran “has no independence” and would be “nothing more than Donald Trump’s mouthpiece at the Fed.”

    The vote was along party lines, with Alaska Sen. Lisa Murkowski the only Republican to vote against Miran.

    Miran is completing an unexpired term that ends in January, after Adriana Kugler unexpectedly stepped down from the board Aug. 1. He said if he is appointed to a longer term he would resign from his White House job. Previous presidents have appointed advisers to the Fed, including former chair Ben Bernanke, who served in president George W. Bush’s administration. But Bernanke and others left their White House jobs when joining the board.

    Miran said during his Sept. 4 hearing that, if confirmed, “I will act independently, as the Federal Reserve always does, based on my own personal analysis of economic data.”

    Last year, Miran criticized what he called the “revolving door” of officials between the White House and the Fed, in a paper he co-wrote with Daniel Katz for the conservative Manhattan Institute. Katz is now chief of staff at the Treasury Department.

    Miran’s approval arrives as Trump’s efforts to shape the Fed have been dealt a setback elsewhere. He has sought to fire Fed governor Lisa Cook, who was appointed by former President Joe Biden to a term that ends in 2038. Cook sued to block the firing and won a first round in federal court, after a judge ruled the Trump administration did not have proper cause to remove her.

    The administration appealed the ruling, but an appeals court rejected that request late Monday.

    Members of the Fed’s board vote on all its interest rate decisions, and also oversee the nation’s financial system.

    The jockeying around the Fed is occurring as the economy is entering an uncertain and difficult period. Inflation remains stubbornly above the central bank’s 2% target, though it hasn’t risen as much as many economists feared when Trump first imposed sweeping tariffs on nearly all imports. The Fed typically would raise borrowing costs, or at least keep them elevated, to combat worsening inflation.

    At the same time, hiring has weakened considerably and the unemployment rate rose last month to a still-low 4.3%. The central bank often takes the opposite approach when unemployment rises, cutting rates to spur more borrowing, spending and growth.

    Economists forecast the Fed will reduce its key rate after its two-day meeting ends Wednesday, to about 4.1% from 4.3%. Trump has demanded much deeper cuts.

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  • How does the Fed influence mortgage rates? Here’s what to know as policymakers consider trimming borrowing costs.

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    The Federal Reserve is widely expected to lower its benchmark interest rate this week for the first time since December of 2024. A rate cut would give Americans a sliver of relief on a wide range of loans, but would it bring down mortgage rates?

    Average rates for a 30-year fixed-rate mortgage fell to 6.35% this week, its lowest level in nearly a year, as financial markets have preemptively priced in a Fed cut when policymakers meet Sept. 16-17. 

    Borrowing costs on 15-year fixed-rate mortgages — popular with homeowners refinancing their home loans — also fell. The average rate slipped to 5.5% from 5.6% last week. A year ago, it was 5.27%.

    With that in mind, experts say homeowners should not expect an immediate drop in mortgage costs should the central bank officially cut its rate on Thursday. 

    Here’s what to know about how monetary policy affects mortgage rates.

    What influence does the Fed have on mortgage rates?

    The Federal Reserve does not directly impact mortgage rates. Instead, it sets what is known as the federal funds rate — what banks charge each other for overnight loans.

    “The Fed is setting short-term interest rates,” Jake Krimmel, a senior economist at Realtor.com, told CBS MoneyWatch. “Things like the mortgage rates are longer-term interest rates.” 

    While Fed rate cuts directly affect short-term interest rates, such as on certificates of deposit (CDs) and high-yield savings accounts, they also impact the broader lending environment, experts note. 

    Adjustable-rate mortgages, for instance, are more sensitive to changes in the federal funds rate because they are tied to the Secured Overnight Financing Rate (SOFR), a short-term market index. 

    Fixed-rate mortgages, meanwhile, tend to move in the same direction as the bond market, particularly the 10-year Treasury note, because they are both long-term instruments with relatively stable risk, according to the Brookings Institute, a nonprofit public policy organization. 

    “They’re maybe not pressed up against one another, but they’re sort of moving in the same direction,” said Krimmel.

    The upshot is that conventional mortgage loans have terms of 15 to 30 years (adjustable-rate loans have shorter terms), so investors are more focused on the longer-term economic conditions reflected in Treasury rates than in the Fed’s short-term lending horizon. 

    Yields on the 10-year Treasury note bounced around this year due to concerns over tariffs and what the One Big Beautiful Bill Act would mean for the economy, Stephen Kates, an analyst at personal finance website Bankrate, told CBS MoneyWatch. Lenders use the yield on 10-year Treasurys as a guide to pricing home loans. The yield was at 4% Thursday afternoon.

    “Investor sentiments, how bonds are being bought and sold, expectations of inflation are all going to impact those longer-term rates,” Kates said.

    What impact could a Fed cut have on mortgage rates?

    Experts say lenders have already been lowering their rates ahead of a likely rate cut by the Fed. The average rate on both 30-year mortgages and 15-year mortgages have inched down at the same time that several fed governors and Fed Chair Jerome Powell have signaled support for slashing interest rates, Krimmel pointed out.

    Kates agreed. “A lot of the decrease that we’ve seen in the last four to six weeks has been in anticipation by some of this cut,” he said.

    Banks and other enders often lower their rates in anticipation of a Fed cut. In September 2024, for example, mortgage rates declined to a two-year low ahead of what turned out to be an unusually large 0.50 percentage point reduction by Fed officials. This is why the rate offers you see now, at the start of the month, may not look much different from those you see later in September, once the cut is official.

    Fed interest rate policy is just one of the factors that can affect the cost of home loans, note experts. A range of other factors can also play a role, including the rate of inflation, job growth, consumer spending and housing demand, as well as global events and other government policies. 

    Because financial markets are forward-looking, any statements made by Powell on the direction of monetary policy could have more of an impact on the housing market than a rate cut itself, according to Krimmel.

    “That might be where there is actually some action with the bond markets or with mortgage rates, because he might give some hints about where the Fed is headed in the future,” he said.

    The Associated Press

    contributed to this report.

    Mary Cunningham

    Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.

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  • How Far Could Donald Trump’s Assault on the Federal Reserve Go?

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    After weeks of anticipation on Wall Street and elsewhere, policymakers at the Federal Reserve, which is one of the few remaining independent agencies that hasn’t yet fallen under the control of Donald Trump, will meet in the coming days to set a key interest rate. Trump has recently renewed his attacks on Jerome Powell, the chair of the Fed, following a sharp slowdown in job growth throughout the summer. He has also demanded a bigger rate cut than Powell and his colleagues on the Federal Open Market Committee (F.O.M.C.), which holds eight scheduled meetings each year to determine monetary policy, are likely to deliver, though that is the least of his efforts to exert control over the central bank.

    Last week, Senate Republicans moved to confirm Stephen Miran, the chair of Trump’s Council of Economic Advisers, to fill a short-term vacancy on the Fed’s Board of Governors. For now, Trump has backed off from his threats to fire Powell, whom he nominated in 2017 before turning against him shortly thereafter. But he is pressing ahead with his effort to oust another Fed governor, Lisa Cook, whom one of his minions, Bill Pulte, the director of the Federal Housing Finance Agency, has accused of mortgage fraud. Last week, a federal judge said Trump hadn’t “stated a legally permissible cause for Cook’s removal,” and allowed her to remain in her role. The Administration promptly appealed the ruling, asking a circuit court to allow it to forge ahead with Cook’s dismissal before the meeting, which starts on Tuesday.

    Policy disputes between Presidents and the Fed aren’t new, though we are witnessing something unprecedented. Until now, the most contentious showdown between the White House and the Fed came in January, 1951, when President Harry Truman summoned the members of the F.O.M.C. to the White House for a dressing-down. Then, as now, the source of the dispute was the President’s demand for low borrowing costs, but the context was very different.

    In April, 1942, shortly after the United States entered the Second World War, the Fed agreed to peg short-term rates at three-eighths of one per cent and long-term rates at 2.5 per cent. To enable the U.S. government to finance a huge expansion in defense spending, the Fed created large sums of money and used it to purchase Treasury bonds, an action that buoyed bond prices and kept their yields low. Large-scale monetary expansions are often associated with inflation, but wartime price controls helped keep price rises in check. In the postwar years, however, inflation picked up, and the United States’ entry into the Korean War, in June, 1950, heightened inflationary pressures. By the start of the following year, prices were increasing at an annual rate of about twenty per cent.

    These developments alarmed Fed officials, many of whom wanted to raise interest rates to bring down inflation. In testimony on Capitol Hill, the Fed chairman at the time, Marriner S. Eccles, who had been appointed by Franklin D. Roosevelt during the Great Depression, described the interest-rate cap as “an engine of inflation.” But Truman, who had one eye on preserving the value of war bonds that many Americans had purchased, was determined to keep it in place. He convened the F.O.M.C. members, and argued that raising rates could jeopardize the financing of the Korean War and the global fight against Communism. The next day, the White House and the Treasury Department announced that the Fed had agreed to maintain its existing policy for the duration of the security emergency. But the members of the F.O.M.C. had agreed to no such thing.

    When reporters from the New York Times and the Washington Post called Eccles, he told them this, and the outlets reported his comments without attribution. The dispute was now out in the open, and the Truman White House was shown to have misled the public. Eccles also released to the press an internal Fed memorandum that recorded the details of the meeting. As Eccles put it later on, “the fat was in the fire.”

    For a month, the dispute escalated. Tense meetings were held. Various senators got involved. The Fed informed the Treasury that it was “no longer willing to maintain the existing situation in the Government security market.” Eventually, the White House and the Treasury backed down. The then Treasury Secretary, John W. Snyder, had been sidelined by an illness, so one of his top lieutenants, William McChesney Martin, negotiated a compromise with the Fed; the deal was finalized in early March. Under this agreement, which came to be known as the Treasury-Fed Accord, the central bank agreed to keep a key interest rate fixed until the end of the year, but it no longer committed to a permanent cap. Effectively, it was free to concentrate on fighting inflation.

    Soon after, Truman appointed Martin as Fed chair, intending to have his own man in place. But, rather than catering to Truman’s desire for a cheap-money policy, Martin acquired a reputation as an inflation hawk. (It was he who likened the Fed’s role to removing the drinks when the party gets raucous.) Years later, according to an informative history of the dispute that was published in 2001 by the Federal Reserve Bank of Richmond, one of twelve regional reserve banks in the U.S., the two men ran into each other on a New York street; Truman looked at Martin, “said one word, ‘traitor,’ and then continued.”

    After reading this history last week, I called up Jeffrey Lacker, an economist who was president of the Richmond Fed from 2004-17 and who also served as a member of the F.O.M.C. under Alan Greenspan and Ben Bernanke. (The voting members of the committee consist of seven Fed governors and five regional Fed presidents.) Lacker is a student of the Fed’s history, and a fervent believer in its independence. “Truman had to sue for peace when he was discovered to have lied to the press about the compliance of the F.O.M.C. with his desires,” he told me. “Whether such shaming is an effective mechanism in this climate is not so clear at all.”

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    John Cassidy

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  • 3 Things That Could Impact Crypto Markets as Fed Decision Looms 

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    Crypto markets ended last week on a high note with total capitalization topping $4 trillion again, but momentum waned over the weekend.

    Stock markets in the US reached record highs last week as markets fully priced in a 0.25% rate cut this week. However, the job market continued to signal weakness with a sharp jump in weekly unemployment claims.

    On Wednesday, the Fed will cut rates for the first time in 2025 and ‘blame’ a weak labor market, said the Kobeissi Letter.

    Economic Events September 15 to 19

    The August retail sales report is due on Tuesday, which is a gauge of consumption and broader economic sentiment.

    The main event of the week is the FOMC meeting on Wednesday, which is likely to see the central bank cut rates for the first time since December 2024. CME futures markets project a 96.4% probability of a 25 basis point cut and a 3.6% chance of a larger 50 basis point cut.

    The Fed has been clear recently that it is more focused on the weakening labor market than on any persistent inflation risks.

    “Amid US macro uncertainty and gold’s record rally, crypto assets are demonstrating resilience and long-term hedging properties against inflation,” said Nick Ruck, director at LVRG Research.

    “With aggressive fiscal policies and expected Fed easing likely to extend the crypto cycle into 2026, both assets stand to benefit from sustained macroeconomic pressures. Mounting stagflation concerns may further support this dynamic, reinforcing the case for alternative stores of value as the Fed weighs this week’s interest rate decision.”

    “We have concerns that the September 17 Fed meeting, which delivers a 25bp cut, could turn into a ‘Sell the News’ event as investors pull back to consider macro data,” wrote JPMorgan Global Head of Market Intelligence Andrew Tyler in a note.

    Thursday will see the Philadelphia Fed Manufacturing Index and initial jobless claims data, but neither is likely to impact markets.

    Crypto Market Outlook

    With the Fed rate cut largely priced in, markets are already starting to react with the typical Monday decline as total capitalization shrinks by 1% to $4.13 trillion.

    Bitcoin topped $116,000 twice over the past 24 hours but faced resistance there before sliding back to $115,000. The asset recovered in early trading on Monday morning in Asia to return to $116,000.

    Ethereum topped $4,700 before pulling back slightly over the weekend to trade at $4,630 at the time of writing as it remains rangebound.

    The altcoins were mostly red with larger losses for XRP, Solana, Cardano, and Chainlink.

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    Martin Young

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  • Trump administration moves forward with push to fire Fed governor Lisa Cook

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    (CNN) — The Trump administration on Sunday renewed its request to a federal appeals court to fire Lisa Cook, a Federal Reserve governor who has faced political scrutiny in recent weeks.

    The move comes ahead of the independent central bank’s vote on interest rates this week. President Donald Trump has repeatedly called for the Fed to slash interest rates while publicly targeting Fed chair Jerome Powell.

    The Trump administration filed its request to the US Court of Appeals for the District of Columbia ahead of Sunday’s 3 p.m. ET deadline.

    The Trump administration called Cook’s claims to stay on the board “meritless,” adding that concerns over whether Cook misrepresented her finances pose concerns as to “whether Cook can be trusted to act with forthrightness, care, and disinterest in managing the U.S. money supply.”

    Lowell & Associates, which is representing Cook, did not respond to CNN’s request for comment

    On Saturday, Cook’s legal team requested that the court reject Trump’s bid to remove her from the board because the administration did not show sufficient cause to fire her. Cook’s lawyers also argued that allowing her to be fired threatens the bank’s independence and the nation’s economic stability.

    “As economists have warned, everyday Americans ultimately would pay the price: higher prices ‘via higher inflation and higher interest rates’ that result ‘when central bank independence is lost,’” Cook’s lawyers said.

    Cook has been under fire for accusations of mortgage fraud, which were launched by Federal Housing Finance Agency Director Bill Pulte. Trump said on August 25 that he would remove Cook from her position because of the accusation.

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    Auzinea Bacon and CNN

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  • Federal Reserve to announce interest rate cut amid economic slowdown, pressure from President Trump

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    Federal Reserve to announce interest rate cut amid economic slowdown, pressure from President Trump

    The Federal Reserve is set to announce an interest rate cut this week in response to a slowing economy, making clear it is not surrendering to President Donald Trump’s demands.

    Updated: 7:42 AM PDT Sep 14, 2025

    Editorial Standards ⓘ

    The Federal Reserve is expected to announce a long-awaited interest rate cut this week, responding to a slowing economy as opposed to yielding to President Donald Trump’s demands. Recent data shows hiring is slowing and unemployment is ticking up, which would normally call for an interest rate cut. Lower interest rates make borrowing money for things like cars and credit cards cheaper. At the same time, inflation remains stubbornly high, which is usually solved by keeping interest rates where they are and leaving costly prices up.With a big decision facing the Fed, added pressure from President Trump isn’t helping. Experts say his repeated calls for the Fed to lower interest rates are damaging the agency’s independence and credibility, spooking investors and the market. “If the Fed is politicized and they’re acting based upon political pressures rather than accurate economic data, that’s going to send messages throughout the economy that maybe what they’re doing isn’t really good for the economy, and maybe it doesn’t come from a solid place of evidence,” political analyst Todd Belt said. “It will introduce even more uncertainty in the economy, and uncertainty is the enemy of business planning.”President Trump’s tariffs have also injected lots of uncertainty in the market, and economists say that, in turn, will further drive up inflation.In a further escalation involving the president and the Fed, last week, a federal judge blocked Trump’s unprecedented attempt to fire Federal Reserve Governor Lisa Cook, alleging mortgage fraud. Now, the administration is appealing and is pushing the courts for an emergency ruling before the Fed’s big interest rate decision this week. But a big twist could undermine the administration’s case, as the Associated Press reports that Cook previously referred to the property in question as a “vacation home,” which would contradict the White House’s accusations of fraud.Watch the latest on the Federal Reserve:

    WASHINGTON —

    The Federal Reserve is expected to announce a long-awaited interest rate cut this week, responding to a slowing economy as opposed to yielding to President Donald Trump’s demands.

    Recent data shows hiring is slowing and unemployment is ticking up, which would normally call for an interest rate cut. Lower interest rates make borrowing money for things like cars and credit cards cheaper.

    At the same time, inflation remains stubbornly high, which is usually solved by keeping interest rates where they are and leaving costly prices up.

    With a big decision facing the Fed, added pressure from President Trump isn’t helping. Experts say his repeated calls for the Fed to lower interest rates are damaging the agency’s independence and credibility, spooking investors and the market.

    “If the Fed is politicized and they’re acting based upon political pressures rather than accurate economic data, that’s going to send messages throughout the economy that maybe what they’re doing isn’t really good for the economy, and maybe it doesn’t come from a solid place of evidence,” political analyst Todd Belt said. “It will introduce even more uncertainty in the economy, and uncertainty is the enemy of business planning.”

    President Trump’s tariffs have also injected lots of uncertainty in the market, and economists say that, in turn, will further drive up inflation.

    In a further escalation involving the president and the Fed, last week, a federal judge blocked Trump’s unprecedented attempt to fire Federal Reserve Governor Lisa Cook, alleging mortgage fraud.

    Now, the administration is appealing and is pushing the courts for an emergency ruling before the Fed’s big interest rate decision this week. But a big twist could undermine the administration’s case, as the Associated Press reports that Cook previously referred to the property in question as a “vacation home,” which would contradict the White House’s accusations of fraud.

    Watch the latest on the Federal Reserve:

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  • ‘The era of Fed independence would be over,’ Cook’s lawyers warn while asking court to reject Trump’s ouster bid | Fortune

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    Federal Reserve Governor Lisa Cook is asking a U.S. appeals court to reject the Trump administration’s latest bid to remove her from her post ahead of the central bank’s next vote on interest rates.

    In a filing with the court Saturday, attorneys on behalf of Cook asked the court to refuse an emergency request by the Trump administration for a stay of a lower court ruling that would clear the way for President Donald Trump to remove Cook from the Federal Reserve’s board of governors.

    Lawyers for Cook argue that the Trump administration has not shown sufficient cause to fire her, and stressed the risks to the economy and country if the president were allowed to fire a Fed governor without cause.

    “A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve. Nothing would then stop the president from firing other members of the board on similarly flimsy pretexts. The era of Fed independence would be over. The risks to the nation’s economy could be dire,” according to the filing.

    The court has given the Trump administration the option to respond to Cook’s filing by 3 p.m. Eastern on Sunday.

    At stake is whether the Trump administration will succeed in its extraordinary effort to shape the board before the Fed’s interest rate-setting committee meets Tuesday and Wednesday. At the same time, Senate Republicans are pushing to confirm Stephen Miran, President Donald Trump’s nominee to an open spot on the Fed’s board, which could happen as soon as Monday.

    Trump has accused Cook of mortgage fraud because she appeared to claim two properties as “primary residences” in July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home.

    Cook has denied the charges and sued the Trump administration to block her firing.

    On Tuesday, U.S. District Court Judge Jia Cobb ruled the administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook did not join the Fed’s board until 2022.

    The administration then appealed the decision and asked for an emergency ruling reversing the lower court order by Monday. In their emergency appeal, Trump’s lawyers argued that even if the conduct occurred before Cook’s time as governor, her alleged action “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”

    If the Trump administration’s appeal succeeds, Cook would be removed from the Fed’s board until her case is ultimately resolved in the courts, and she would miss next week’s Fed meeting, when the central bank is set to decide whether to reduce its key interest rate.

    If the appeals court rules in Cook’s favor, the administration could seek an emergency ruling from the Supreme Court.

    The Fed is under relentless pressure from Trump to cut rates. The central bank has held rates steady since late 2024 over worries that the Trump administration’s unpredictable tariff policies will reignite inflation.

    Last month, Fed Chair Jerome Powell signaled that Fed officials are increasingly concerned about weaker hiring, setting the stage for a rate cut next week. Most economists expect the Fed will cut its benchmark interest rate by a quarter-point to about 4.1%.

    When the Fed reduces its key rate, it often, over time, lowers borrowing costs for mortgages, auto loans, and business loans. Some of those rates have already fallen in anticipation of cuts from the Fed.

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    Alex Veiga, The Associated Press

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  • Fed Gov. Lisa Cook claimed Atlanta condo as ‘vacation home,’ undercutting Trump fraud claims

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    Federal Reserve Governor Lisa Cook has been allowed to remain in her position after securing an injunction against the Trump administration’s attempt to fire her over allegations of mortgage fraud.

    President Donald Trump has sought to remove Cook from the Federal Reserve Board, citing claims that she improperly designated two properties as her primary residence to obtain favorable mortgage terms.

    Cook referred to her Atlanta condominium she purchased in June 2021, as a ‘vacation home’ in a loan estimate, which contradicts the administration’s allegations.

    Bill Pulte, a Trump appointee, accused Cook of signing documents claiming both the Atlanta condo and a home in Ann Arbor, Michigan, as primary residences.

    This led to a criminal referral to the Justice Department, which is investigating the matter.

    Cook described the Atlanta property as a ‘second home’ on a security clearance form, further complicating the allegations against her.

    The administration’s appeal of the injunction is pending, with an emergency ruling requested before the Federal Reserve’s upcoming meeting to decide on interest rates.

    TRENDING STORIES:

    Fulton County tax records indicate that Cook has not claimed a homestead exemption on the condo, which would typically be used by someone designating a property as their primary residence.

    The outcome of the Justice Department’s investigation and the administration’s appeal remains uncertain, leaving Cook’s future at the Federal Reserve in question as the central bank prepares for its next meeting.

    Information from this article from the Associated Press.

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  • Inflation fears drive falling consumer sentiment in September

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    New data shows Americans are feeling increasingly concerned about the state of the economy. A survey reveals that consumer sentiment fell in September for the second consecutive month. CBS News senior business and technology correspondent Jo Ling Kent has more.

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  • Americans are feeling a lot worse about the state of the economy

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    (CNN) — American consumers are downbeat about the economy, according to preliminary results of a monthly survey conducted by the University of Michigan.

    The index measuring consumer sentiment fell unexpectedly this month to 55.4 from 58.2 in August as inflation is on the rise and job prospects are worsening. September’s reading also represents a 21% decline compared to a year ago, well before President Donald Trump took office and raised tariffs on practically everything the country imports.

    In addition to inflation and the labor market, tariffs also remain a concern for consumers, Joanne Hsu, the survey’s director, noted.

    “Trade policy remains highly salient to consumers, with about 60% of consumers providing unprompted comments about tariffs during interviews,” Hsu, said in a statement, noting that the same thing happened in the previous month.

    Economists polled by FactSet had been anticipating a minor improvement in consumer sentiment from August. Despite sentiment that’s near historic lows in a survey that goes back to the early 1950s, consumers are still feeling slightly better about the economy now compared to April and May during Trump’s initial rollout of so-called “reciprocal” tariffs, according to prior readings.

    The survey also spotlights what appears to be an increasingly bifurcated economy between income classes, where higher-income Americans continue to spend relatively freely and are feeling more optimistic about the state of the economy, while lower and middle-income Americans are cutting back and are more worried.

    Whiffs of stagflation

    While the economy is nowhere close to where it was in the 1970s and 1980s, when the nation’s annual inflation rate and unemployment rate both hit double-digit levels, recent employment and inflation data have led to mounting concerns of stagflation – when the economy slows significantly while inflation accelerates.

    Consumer prices rose 0.4% last month, bringing the annual inflation rate to 2.9%, according to Consumer Price Index data released Thursday. Meanwhile, there’s a laundry list of recent data pointing to a weakening labor market.

    For example, first-time applications for unemployment benefits surged last week to their highest level in four years. Also for the first time in four years, there are more people looking for work than there are jobs available for them.

    To top it off, the August employment report showed employers hired just 22,000 new workers and the unemployment rate rose to 4.3%, the highest level since 2021. The labor force snapshot also revealed that the US economy lost 13,000 workers in June, marking the first month since 2020 when employers laid off more workers than they hired.

    “Economic sentiment declined more than expected in September largely because Americans are fearful of losing their jobs,” Heather Long, chief economist at Navy Federal Credit Union, said in a statement on Friday.

    This string of data has essentially guaranteed the Federal Reserve will cut interest rates at its monetary policy meeting next week after having held rates steady for close to a year. Traders are also now betting on cuts at the subsequent two meetings this year, which has helped push stocks to record highs.

    This story has been updated with additional developments and context.

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    Elisabeth Buchwald and CNN

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  • US judge blocks Trump bid to fire Fed board member Lisa Cook

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    A US federal judge on Tuesday temporarily blocked President Donald Trump’s attempt to remove Federal Reserve (Fed) board member Lisa Cook from her position, handing him a legal setback in his clash with the country’s central bank.

    District court judge Jia Cobb granted Cook’s request for a preliminary injunction, ruling that the US president may only dismiss Fed governors “for cause” and that alleged conduct predating her appointment could not justify removal. The judge also stressed the public interest in maintaining the Fed’s independence.

    Trump said in August he was removing Cook immediately, citing allegations she made false statements in one or more mortgage applications.

    Cook, an economist, denied the accusations and argued that Trump lacked authority to dismiss her. Through her lawyers, she said even if errors had been made, they related to a private mortgage years before she took office.

    Cook was first appointed to the Fed’s board of governors in 2022 by then-president Joe Biden and confirmed by the US Senate.

    The ruling underscores tensions between Trump and the Fed. The US president has repeatedly called for interest rate cuts and urged Fed Chair Jerome Powell to resign. He has now targeted Cook.

    Legal experts expect the dispute to ultimately reach the US Supreme Court. The Fed plays a pivotal role in setting monetary policy for the world’s largest economy, with global implications for financial stability.

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  • Federal judge rules Lisa Cook can remain Fed governor for now as Trump tries to fire her

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    A federal Judge on Tuesday ruled that Lisa Cook can remain in her role on the Federal Reserve’s Board of Governors while her lawsuit challenging President Trump’s attempt to fire her from her post plays out.

    “President Trump has not stated a legally permissible cause for Cook’s removal,” U.S. District Judge Jia Cobb, who was appointed by former President Joe Biden, wrote in her ruling, which is likely to be appealed.

    Mr. Trump said he is firing Cook over allegations she made false representations on mortgage agreements several years ago.  

    “President Trump’s stated cause refers only to allegations regarding Cook’s conduct before she began serving on the Federal Reserve Board,” Cobb wrote. “As discussed above, such allegations are not a legally permissible cause.”

    Abbe David Lowell, an attorney representing Cook in her lawsuit, said in a statement to CBS News on Tuesday night, “This ruling recognizes and reaffirms the importance of safeguarding the independence of the Federal Reserve from illegal political interference. Allowing the President to unlawfully remove Governor Cook on unsubstantiated and vague allegations would endanger the stability of our financial system and undermine the rule of law. Governor Cook will continue to carry out her sworn duties as a Senate-confirmed Board Governor.”

    CBS News has reached out to the White House for comment. 

    Under federal law, Fed board members serve for 14-year terms and can only be fired by the president “for cause.” Cook has served on the Fed since being appointed to complete another member’s unexpired term in 2022, and her current term would run until 2038. 

    This a breaking news story. It will be updated.

    Jordan Freiman

    Jordan Freiman is a news editor for CBSNews.com. He covers breaking news, trending stories, sports and crime. Jordan has previously worked at Spin and Death and Taxes.

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  • Fed nominee Miran queried by Senator Warren about discrepancy in ethics filings

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    (Reuters) -U.S. Senator Elizabeth Warren raised fresh questions about President Donald Trump‘s pick to fill an open seat at the Federal Reserve, demanding on Tuesday that Stephen Miran explain a discrepancy in filings to the U.S. Office of Government Ethics disclosing income that his spouse received.

    Warren demanded answers in a letter issued less than 24 hours before the Republican-majority Senate banking committee’s scheduled vote, at 10 a.m. EDT on Wednesday, to advance Miran’s nomination for consideration by the full Senate.

    Warren, the banking panel’s top Democrat, opposes Miran’s confirmation. She and other members of her party say that his decision not to resign as White House economic advisor compromises his ability to make decisions on monetary policy that are independent of the president, who has made no secret of his desire for lower interest rates.

    In a February 2025 OGE filing when he was nominated for his current job as chair of the Council of Economic Advisors, Miran reported $1.4 million in income attributed to his spouse from a for-profit university called East Coast Polytechnic Institute.

    However, seven months later he reported spousal income of $457,954 from ECPI. That was included in his latest OGE filing, dated September 3, 2025.

    “Particularly given the history of reputational quality issues, underhanded operations, and opaque funding structures associated with for-profit universities, the nature of your spouse’s — and by extension your — relationship with ECPI deserves full clarity,” Warren wrote in the letter, a copy of which was seen by Reuters.

    “Further, the discrepancy raises questions about the reason for the change and the accuracy of the disclosures in your OGE forms.”

    The White House and ECPI president had no immediate comment.

    In a letter following up on Miran’s confirmation hearing last week, Warren had asked Miran about his and his spouse’s relationship with the university, and several other assets reported on his disclosure form as real estate assets that “support ECPI.”

    Miran, in his response dated September 7, said he had “provided all required financial information” to the ethics office and had entered into an ethics agreement “that describes the steps that I will take to avoid any actual or apparent conflict of interest in the event that I am confirmed for the position of Governor of the Board of Governors of the Federal Reserve System.”

    (Reporting by Ann Saphir, Michael S. Derby, Andrea Shalal; Editing by Richard Chang)

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  • Americans’ confidence in finding a new job falls to record low

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    Job seekers’ confidence in finding new employment has fallen, a new survey reveals.

    According to the Federal Reserve Bank of New York’s Survey of Consumer Expectations, the average “perceived probability” of finding a new job after losing one fell 5.8% points to 44.9% among heads of households surveyed in August, the lowest measure on record since 2013 when the New York Fed began collecting data.

    At the same time, Americans are increasingly worried about losing their current job. Expectations that the U.S. unemployment rate will be higher a year from now crept up 1.7 percentage points to 39.1%, the New York Fed found. 

    The data comes as Americans adopt a dimmer view of the economy. According to a recent CBS News poll, a majority of respondents continue to say the economy is getting worse.

    The labor market has been under a microscope since July employment data showed weaker-than-expected job growth and sharp downward revisions for the months of June and May. August’s data, released Friday, pointed to a slump in U.S. hiring, with employers adding only 22,000 jobs. Unemployment also ticked up to 4.3%, the highest rate since October 2022. 

    “Employers may be holding onto their current workers amid uncertainty, but they are not adding new positions,” Allison Shrivastava, economist at Indeed Hiring Lab, told CBS MoneyWatch. “In turn, employees have taken the hint, staying in their current jobs rather than seeking new opportunities.”

    According to a recent Bankrate survey, about half of Americans are planning to search for a new job in the next year. At the same time, data shows that the number of people changing jobs has slowed significantly since 2022, when millions of people quit their jobs during the “Great Resignation.” 

    During this period, workers had more negotiating power because labor supply disruptions created heightened demand for workers. That balance, however, has started shifting back in favor of employers in recent years.

    A recent analysis from Bank of America shows that the percentage of its customers leaving their jobs has largely trended downward from a more than 26% peak in 2022, and is now just slightly above the job change rate in 2019, at 3.3%. Experts say that’s mainly because there are fewer opportunities for people to switch jobs and general unease with the state of the labor market.

    “If this stagnation continues, unemployment — and layoffs — will increase, further weakening the labor market,” said Shrivastava.

    The Fed, which is tasked with maintaining a robust job market and low inflation, has acknowledged that the downside risks to employment are rising. This strengthens the likelihood that the central bank will cut rates at its next meeting, which is scheduled for Sept. 16 to 17.

    Mary Cunningham

    Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.

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  • Trump hits the links amid economic slowdown concerns

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    Wall Street took hits on the market after hiring slumped in August. The economy added 22,000 jobs, far below expectations, fueling fresh concerns about a slowdown. Nikole Killion has more details.

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  • The Fed got it wrong and is late again, top economist says, as job gains collapse

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    Allianz chief economic advisor Mohamed El-Erian said the Federal Reserve is behind the curve in lowering rates now that the economy is slowing, just as it was tardy in hiking rates when inflation was spiking.

    The latest jobs report revealed the U.S. economy added just 22,000 jobs in August with revisions to prior months showing June actually saw a decline. Meanwhile, the unemployment rate edged up to a four-year high of 4.3%.

    “I think they have gotten it wrong,” he told CNBC on Friday. “I think once again they’re late. They will cut in September, and I suspect there will also be discussion should they cut by 25 or 50” basis points.

    That would mark another policy mistake in recent years. As the economy began to recover from the COVID-19 pandemic, prices began surging, but the Fed was slow to hike rates. When it finally started in 2022, it launched the most aggressive tightening cycle in four decades, though the economy didn’t tip into a recession as was widely expected.

    El-Erian’s remarks echo President Donald Trump’s criticism of the central bank. Trump has regularly insulted Chairman Jerome Powell, and even toyed with firing him earlier this year. Meanwhile, he has moved to fire Fed Governor Lisa Cook, who is fighting her dismissal in court.

    The Fed should’ve cut rates in July, but Powell’s view of the job market was too narrow and ignored the weakness that was building under the surface, El-Erian said.

    The risk with waiting to provide support to a weakening labor market is that it can deteriorate in a “nonlinear” fashion, meaning that job losses can quickly accelerate, he explained.

    For his part, Powell has pointed to the unemployment rate, which has been relatively steady for more than year, noting that the supply of workers in the labor market has dropped alongside a decline in demand.

    Trump’s immigration crackdown has sent more than 1 million workers out of the labor force this year. As a result, the breakeven level of job gains that are needed to keep unemployment flat is lower than it used to be.

    At the same time, Fed’s dual mandate of price stability and maximum employment is forcing policymakers to balance the risks of further stoking inflation, which has been climbing as Trump’s tariffs ripple through the supply chain.

    Tariffs are also weighing on the job market. In a note on Saturday, Torsten Sløk, chief economist at Apollo Global Management, observed that job growth in tariff-impacted sectors is negative, while sectors not directly impacted by tariffs are declining but still in positive territory.

    There’s still time for the Fed to correct its mistake, and perhaps cut rates more aggressively, El Erian said. But the risks to the economy are elevated as lower-income households have seen their financial security decline.

    “Could they play catch-up? Yes, they could. Hopefully they will, but it’s a more risky operation than a lot of people expect it to be,” he warned.

    It’s also not certain the Fed can actually save the economy. Moody’s Analytics chief economist Mark Zandi previously warned that with inflation still climbing, the central bank will have a hard time coming to the rescue with a steep easing cycle.

    Similarly, JPMorgan Asset Management chief global strategist David Kelly said rate cuts will reduce interest income for retirees and encourage businesses to hold off on borrowing money and wait for rates to get even lower.

    “The whole history of the 21st century is rate cuts don’t stimulate growth,” he told CNBC on Friday. “They didn’t any in any way after the Great Financial Crisis. So don’t look to the Fed to bail out the economy.”

    On top of that, lower cuts could also raise fears that the reason the Fed is cutting because it sees a recession on the horizon, Kelly added.

    Combined with existing uncertainty over Trump’s tariffs and immigration crackdown, recession fears could act as another drag on the economy, he explained, noting that “the biggest tax the government levies is an uncertainty tax.”

    “There is a level of uncertainty here which is just causing people to freeze, and that’s really what you see in the hiring numbers,” Kelly said. “That’s the problem. Businesses aren’t laying off thousands and thousands. They’re just waiting to see, and the three most deadly words in economics are ‘wait and see.’ But when everybody decides to wait and see, what you see is not good.”

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  • The August jobs report has economists alarmed. Here are their 3 top takeaways.

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    Many economists say Friday’s disappointing jobs report is sending warning signals about the pace of hiring across the U.S. and the broader health of the economy. 

    Employers added only 22,000 nonfarm jobs in August, far short of Wall Street analyst forecasts of 80,000, while the nation’s unemployment rate rose to 4.3% — the highest level since October of 2021, when the economy was still reeling from the effects of the pandemic. In 2024, the economy added an average of 168,000 per month, labor data shows.

    The job market is faltering partly because of the Trump administration’s tariffs, which are heightening economic uncertainty, boosting costs for importers and complicating business planning.. Some economists also think that rapid employer adoption of artificial intelligence is hurting demand for recent college graduates and other entry-level workers, although there is ongoing debate among researchers about how much AI is affecting job growth.

    “Uncertainty makes it very, very difficult for people in companies to make decisions,” Laura Ullrich, director of economic research for North America at job-search firm Indeed and a former official at the Federal Reserve Bank of Richmond, told CBS MoneyWatch. “My former boss says that when you are driving through fog, you slow down — but if it gets thick enough, you pull over.”

    The Trump administration defended its trade and other economic policies, expressing confidence they will eventually drive growth.

    “President Trump’s trade deals have unlocked unprecedented market access for American exports to economies that in total are worth over $32 trillion with 1.2 billion people,” White House spokesman Kush Desai said in a statement to CBS MoneyWatch. “As these unprecedented trade deals and the administration’s pro-growth domestic agenda of deregulation and historic working-class tax cuts take effect, American businesses and families alike have the certainty that the best is yet to come.” 

    In response to the jobs report, President Trump on Friday posted on social media that Federal Reserve Chair Jerome Powell should have moved sooner to cut interest rates. Lower borrowing costs can stimulate job growth by driving consumer spending and making it cheaper for businesses to expand their operations.

    “Jerome ‘Too Late’ Powell should have lowered rates long ago. As usual, he’s ‘Too Late!’,” the president wrote.

    Here are three key takeaways from economists about the latest employment figures. 

    The job market is stalling 

    Overall hiring in August was far weaker than economists expected. More troubling, the numbers look considerably worse after stripping out the two sectors that showed some of the strongest growth in August — health care and social assistance. Health care companies created 31,000 new jobs last month, while social assistance — employers such as food banks and those providing services for disabled people, children and low-income families — added 16,000 new jobs. 

    But many other sectors had stagnant or even declining job growth, such as manufacturing, which shed 12,000 jobs in August, and professional and business services, which lost 17,000. 

    “Absent the secular gains in health care and social assistance, the cyclical categories of the private service sector (excluding health care and social assistance) have collectively turned negative on average in the past four months,” Nationwide chief economist Kathy Bostjancic said in a report Friday. 

    Hiring this summer was also weaker than previously thought. The Labor Department’s latest data shows employers cut 13,000 jobs in June, rather than adding 14,000 new hires as the agency had reported in its first estimate for that month. The June drop marks the first decline in monthly jobs since late 2020.

    Although July payroll gains were revised up slightly, total job growth for June and July was 21,000 lower than previously reported, according to the Labor Department. 

    Job growth is at its lowest level in 15 years

    The average monthly job gains since January represent the fewest jobs added over the first eight months of the year in 15 years, excluding the pandemic-triggered crisis period of 2020, Indeed’s Ullrich noted.

    “We haven’t added this few jobs since 2010, and we have 17 million more people in the labor market than we did then,” she said. “That, to me, is a staggering headline.”

    That loss of momentum in creating new jobs is raising concerns about the overall strength of the economy. The nation’s gross domestic product — the total value of goods and services — is expanding more slowly than in 2024, while inflation remains above the Federal Reserve’s annual growth target of 2%. 

    That combination has caused some economists to warn about the risk of the U.S. entering a period of “stagflation,” a toxic mix of high prices and weak growth. Forecasters expect Consumer Price Index data for August, which is set to be released next week, to show inflation rising at an annual rate of 2.9%, according to financial data firm FactSet.

    “Concerns about the health of the economy are starting to creep in,” Seema Shah, chief global strategist at Principal Asset Management, said in an email. “Equally, a strong inflation print next week could strike new fears about a stagflationary mix.”

    The Fed is highly likely to cut interest rates this month

    Across the board, economists on Friday said the subpar August jobs report virtually locks in a Federal Reserve interest-rate cut when policymakers meet on Sept. 17.  The question is by how much. 

    August hiring was so anemic that some economists now think the Fed could opt for a 0.5 percentage point cut — double the typical rate cut — in a bid to keep the job market on track. Traders now see a 10% chance of a jumbo cut and a 90% likelihood of a 0.25 percentage point reduction, according to CME FedWatch. Prior to Friday’s jobs report, the market was completely discounting a jumbo cut, the tool shows. 

    Some economists also think the Fed will continue trimming rates later in 2025 to counter the weak job market. 

    “With the weak job growth, the Fed is cleared to cut rates in September. The question is whether we get [0.25 or 0.50 percentage points],” Scott Helfstein, Global X’s head of investment strategy, said in an email. “We continue to believe the Fed will ease into the cutting cycle here with one rather than two, but there is some latitude here.”

    Aimee Picchi

    Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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  • Job growth stalls: US economy added just 22,000 jobs in August and unemployment rose to highest level since 2021

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    (CNN) — The US job market is stalling out.

    Job growth slowed to a crawl in August, and the unemployment rate rose to its highest level in nearly four years, indicating the US labor market is growing stagnant.

    The economy added just 22,000 jobs last month and the unemployment rate rose to 4.3% from 4.2%, according to the Bureau of Labor Statistics.

    August’s job report also included a downward revision to June, which showed the US economy lost 13,000 jobs that month. It’s the first negative employment month since December 2020, and it brings to an end what was the second-longest period of employment expansion on record.

    “The Great American jobs machine has stalled,” Christopher Rupkey, chief economist at FwdBonds, wrote in commentary issued Friday.

    July’s job gains were revised up slightly to 79,000 from 73,000, according to the report.

    Economists were expecting that the economy added 76,500 jobs last month and that the unemployment rate rose to 4.3%, according to FactSet.

    The Dow rose 119 points, or 0.26%, Friday morning. The S&P 500 rose 0.41% and the tech-heavy Nasdaq gained 0.63%, after the weaker-than-expected jobs data boosted expectations that the Federal Reserve will cut interest rates in September to stimulate the economy.

    Uncertainty stymies hiring

    Through August, monthly job gains average 74,750, BLS data shows. Excluding the pandemic, that’s the slowest average monthly gain for that January to August time frame since 2010, when the United States was still licking its wounds from the Great Recession.

    “The addition of just 22,000 jobs in August, along with net downward revisions of previous months, shows an economy straining under the immense economic uncertainty and significant policy changes of 2025,” Laura Ullrich, Indeed’s director of economic research for North America, wrote Friday.

    Uncertainty has swelled since the beginning of the year in large part around how President Donald Trump’s sweeping policies on tariffs, immigration and federal spending would shake out through the economy.

    Hiring efforts, already stymied in part by still-high interest rates, have been largely shelved due to the unknowns.

    “They don’t know where things are going, whether it’s through tariffs or other dynamics – interest rates still aren’t coming down – so I think a lot of companies are just saying, ‘not now,’” Ron Hetrick, senior labor economist at employment analytics company Lightcast, told CNN in an interview. “I think there’s somebody probably out there who’d like to hire, but not in this environment.”

    “They’re waiting for more certainty to occur,” he said.

    Narrow job growth means fewer opportunities

    The low-hire, low-fire environment is leaving workers and job hunters with few opportunities.

    And more workers are seeking those opportunities, as labor market re-entrants helped to lift the unemployment rate last month.

    The labor force, which shrank for three months in a row, increased by 436,000 people in August, according to BLS data. The labor force participation rate moved higher as well, ticking up to 62.3% from 62.2%.

    While the majority of those labor force gains were from those classified as employed, the increase in those unemployed was largely attributed to those who re-entered the labor market and are searching for jobs.

    “In fact, the median time looking for work slipped to a three-month low, a bright spot in a generally weak jobs report,” Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute, wrote in a note to investors Friday.

    A low-churn labor market puts the US labor market — and the broader economy — at greater risk, economists warn.

    The limited job gains also are coming from practically a single source, exacerbating those concerns.

    The US job market is being propped up primarily by ongoing employment gains in the health care industry. That sector, which has attributed for the lion’s share of overall job growth this year, added 46,800 jobs in August.

    That sector, however, accounts for just 15% of total employment, meaning many people are left on the sidelines.

    “For 85% of workers, they’re not seeing a lot of the jobs added,” Kory Kantenga, LinkedIn’s head of economics Americas, told CNN this week.

    And wage gains are increasingly growing softer. The annual growth rate of average hourly earnings slowed to 3.7% in August, from 3.9% in July.

    Without broader-based employment growth, the labor market is more vulnerable to shocks, he said.

    “If anything happens to that industry, you could easily see job growth fall off a cliff.”

    Warning signs have been flashing for months that the job market has been losing steam. That became starkly clearer in July, when weak job growth and larger-than-typical downward revisions spurred the unprecedented firing of BLS Commissioner Erika McEntarfer by President Donald Trump who claimed, without evidence, that the disappointing data must have been “rigged.”

    Other labor market data released so far this week further confirmed that the labor market has cooled down considerably: Private-sector hiring slowed sharply; initial jobless claims hit a nearly three-month high; layoff announcements picked up; and, for the first time in four years, the number of available jobs was lower than the number of job seekers.

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    Alicia Wallace and CNN

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