WASHINGTON (AP) — What was once seen as a near-certain cut in interest rates next month now looks more like a coin flip as Federal Reserve officials sharply disagree over the economy’s health and whether stubborn inflation or weak hiring represent a bigger threat.
The turmoil on the Fed’s 19-member interest-rate setting committee reflects a deeply uncertain economic outlook brought about by multiple factors, including tariffs, artificial intelligence, and changes in immigration and tax policies.
“It’s reflective of a ton of uncertainty,” said Luke Tilley, chief economist at M&T Bank. “It’s not surprising at all that there’s a wide divergence of opinions.”
Fewer rate cuts by the Fed could leave borrowing costs for homes and cars elevated. More expensive mortgages and auto loans contribute to the widespread view, according to polls, that the cost of living is too high.
Some Fed watchers say that an unusually high number of dissents are possible at the December 9-10 meeting, regardless of whether the central bank reduces rates or not. Krishna Guha, an analyst at Evercore ISI, said a decision to cut could lead to as many as four or five dissents, while a decision to keep rates unchanged could produce three.
Four dissenting votes would be highly unusual, given the Fed’s history of seeking consensus. The last time four officials dissented was in 1992, under then-Chair Alan Greenspan.
Fed governor Christopher Waller on Monday noted that critics of the Fed often accuse it of “group think,” since many of its decisions are made unanimously.
“People who are accusing us of this, get ready,” Waller said Monday in remarks in London. “You might see the least group think you’ve seen … in a long time.”
The differences have been exacerbated by the government shutdown’s interruption of economic data, a particular challenge for a Fed that Chair Jerome Powell has often described as “data dependent.” The government’s last jobs report was for August, and inflation for September.
September jobs data will finally be published Thursday, and are expected to show a small gain of 50,000 jobs that month and an unchanged unemployment rate at a still-low 4.3%.
For now, Wall Street investors put the odds of a December rate cut at 50-50, according to CME Fedwatch, down sharply from nearly 94% a month ago. The decline has contributed to the stock market’s drops this week.
After cutting their key rate in September for the first time this year, Fed policymakers signaled they expected to cut twice more, in October and December.
But after implementing a second reduction Oct. 29, Powell poured cold water on the prospects of another cut, describing it as “not a foregone conclusion — far from it.”
And speeches last week by a raft of regional Fed officials pushed the market odds of a December cut even lower. Susan Collins, president of the Federal Reserve Bank of Boston, said, “in all of my conversations with contacts across New England, I hear concerns about elevated prices.”
Collins said that keeping the Fed’s key rate at its current level of about 3.9% would help bring inflation down. The economy “has been holding up quite well” even with interest rates where they are, she added.
Several other regional presidents voiced similar concerns, including Raphael Bostic of the Atlanta Fed, Alberto Musalem of the St. Louis Fed, and Jeffrey Schmid at the Kansas City Fed. Musalem, Collins, and Schmid are among the 12 officials who vote on policy this year. Schmid dissented in October in favor of keeping rates unchanged.
“When I talk to contacts in my district, I hear continued concern over the pace of price increases,” Schmid said Friday. “Some of this has to do with the effect of tariffs on input prices, but it is not just tariffs — or even primarily tariffs — that has people worried. I hear concerns about rising health care costs and insurance premiums, and I hear a lot about electricity.”
On Monday, however, Waller argued that sluggish hiring is a bigger concern, and renewed his call for a rate cut next month.
“The labor market is still weak and near stall speed,” he said. “Inflation through September continued to show relatively small effects from tariffs and support the hypothesis that tariffs … are not a persistent source of inflation.”
Waller also dismissed the concern — voiced by Schmid and others — that the Fed should keep rates elevated because inflation has topped the Fed’s 2% target for five years. So far that hasn’t led the public to worry that inflation will stay elevated for an extended period, Waller noted.
“You can’t just sort of say it’s been above target for five years, so I’m not going to cut,” he added. “You got to give us better answers than that.”
There could be consensus for an interest rate cut if, say, new data for October and November show the economy shedding jobs, according to Esther George, the former president of the Kansas City Fed.
It’s also worth noting that many economists had expected multiple dissents in September, but instead only Stephen Miran, a governor appointed that month by President Donald Trump, voted against the rate cut decision, in favor of an even bigger reduction.
“Registering a dissent is a hard decision, and I think you’re going to find people that are speaking today that wouldn’t follow through with a vote in that direction,” she said. “I think you’re going to find enough consensus, whichever way they go.”
When Democrat Graham Platner entered the race to unseat incumbent Republican senator Susan Collins in August, he immediately clicked with Maine voters. An oyster farmer and ex-Marine who looks the part of a rugged Down-Easter, Platner’s brand of left-wing populism, focused squarely on the state’s cost-of-living crisis, resonated broadly. Platner has raised an impressive $4-plus million, gotten reams of positive press, drawn large crowds across the state, and received endorsements from Bernie Sanders and several progressive organizations. He has successfully positioned himself as the insurgent alternative against the Democratic Establishment’s pick to take on Collins: Maine’s 77-year-old governor, Janet Mills, who finally joined the race this week with the backing of national figures such as Chuck Schumer.
A major part of Platner’s appeal is that he is the opposite of a seasoned politician. But given that he was basically unknown before the summer, it seemed inevitable that his lack of polish would come with a few downsides. So it was perhaps not shocking when CNN’s investigative reporter Andrew Kaczynski — known for exposing politicians’ unsavory pasts — published an article that included several eye-opening internet comments made by Platner during his pre-politician days posting on Reddit, mostly from 2020 and 2021. Some of the most notable:
In one now-deleted Reddit comment from 2021, Platner responded to a thread about people becoming more conservative as they age by saying: “I got older and became a communist.” The comment was made on a subreddit called r/Antiwork, a far-left forum “for those who want to end work.”
In one deleted comment, in a thread about a Black army lieutenant who was held at gunpoint and pepper-sprayed by police during a traffic stop, one Reddit user wrote, “Bastards. Cops are bastards.” Platner replied, “All of them, in fact.”
In another since-removed post from 2020, Platner responded to a thread titled “White people aren’t as racist or stupid as Trump thinks” by writing, “Living in white rural America, I’m afraid to tell you they actually are.”
In the now-deleted posts, Platner also used the word “retarded” repeatedly to denigrate other commenters, along with other harsh language, as when he responded to a question about why Maine had voted against a power line that would connect Massachusetts to Canada: “I have to ask, and I do mean this is the most charitable of ways, but are you retarded? We shouldn’t have the [sic] eat the pain because you cunts and Massachusetts couldn’t act like adults. Fuck off and die, leave Maine out of your capitalist fantasies.”
And Platner detailed the disillusionment he experienced after his military service, sounding a pessimistic note about the U.S.: “My time in America’s imperial wars definitely radicalized me further,” he wrote, “and I’m significantly more left today than I was back then. It is difficult to see all that horror, as well as all the grift and corruption, and not find the entire thing utterly bankrupt. I did used to love America, or at least the idea of it. These days I’m pretty disgusted by it all.”
In an interview with Kaczynski, Platner said many of his comments were broadly unrepresentative of his current views. “That was very much me fucking around the internet,” he said. “I don’t want people to see me for who I was in my worst internet comment — or even, frankly, who I was in my best internet comment … I don’t think any of that is indicative of who I am today, really.”
“I’m not a communist. I’m not a socialist. I own a small business. I’m a Marine Corps veteran,” he continued.
Platner said he is still “very angry still about the wars I had to fight in and what I had to take part in” — a view that is unlikely to alienate many voters — while sounding a brighter note about America’s future: “I absolutely love the place that I live, and I love the people around me,” he said. “And I do actually believe firmly in the idea that we as Americans have a lot in common and that we can be the thing that we want to be the thing that we claim to be.”
On Thursday night, Politico published its own story about Platner’s internet past, this one focusing on his seeming endorsement of political violence. In comments he made in 2018, as part of a sub-Reddit called the Socialist Redditor Rifle Association, Platner wrote that if people “expect to fight fascism without a good semi-automatic rifle, they ought to do some reading of history.” And there was more where that came from:
In a July 2018 post on the same subreddit, Platner said that he “agreed” with a 1914 quote from former socialist presidential candidate Eugene V. Debs that workers should arm themselves unless they are “willing to be forced into abject slavery.”
Platner cited Debs, who ran for president from prison, as an example to counter the notion that the 2nd Amendment only gained salience in the 1970s.
“That’s why this poster and the Debs quote that follows above should be shared far and wide. An armed working class is a requirement for economic justice,” Platner said.
“As I told CNN, I was fucking around on the internet at a time when I felt lost and very disillusioned with our government who sent me overseas to watch my friends die,” Platner told Politico. “I made dumb jokes and picked fights. But of course I’m not a socialist. I’m a small-business owner, a Marine Corps veteran, and a retired shitposter.”
And the hits kept on coming. On Friday, the Bangor Daily Newsrevealed a series of Platner Reddit posts from 2013, in which he openly mused about a racist stereotype and appeared to make light of sexual assault:
Platner responded to a 2013 post on Reddit entitled “What is one question you have always wanted to ask someone of another race,” writing, “Why don’t black people tip?” He worked as a bartender at Tune Inn on Capitol Hill, where he was a guest bartender last month.
“I work as a bartender and it always amazes me how solid this stereotype is,” he wrote. “Every now and again a black patron will leave a 15–20% tip, but usually it [is] between 0–5%. There’s got to be a reason behind it, what is it?”
That same year, he also responded to a post about underwear designed to prevent sexual assault saying people should “take some responsibility for themselves and not get so f–ked up they wind up having sex with someone they don’t mean to?”
Whether Platner can surmount any fallout from the posts may depend on how well he can incorporate them effectively into his regular-guy image — and whether there is more from his past to be exposed, which seems like a decent bet at this point.
The reporting on Platner’s online past is already having an impact on his campaign. Per the Bangor Daily News, Maine state representative Genevieve McDonald left her role as Platner’s political director on Friday, writing in her resignation letter that the past remarks “were not known to me when I agreed to join the campaign, and they are not words or values I can stand behind in a candidate.”
This is all undoubtedly good news for Mills, who faces major electability questions herself, primarily regarding her age. She has pledged to serve only one term, but if Mills beats Platner and Collins, she would be the oldest freshman senator ever at 78. Especially after a presidential election defined by a Democrat’s advanced age, Mills will need to convince voters both that she’s fit to serve six years and that an Establishment deeply disliked by rank-and-file voters can still be trusted to pick the right candidate against the formidable Collins. Any more doubts about Platner’s viability will help.
Maine Governor Janet Mills, a Democrat, is preparing to launch a challenge to longtime GOP Senator Susan Collins in what is likely to become one of the most closely watched races of the midterms, the Associated Press reported on Friday, citing two people familiar with her plans.
“Primaries are an important part of the democratic process because they give voters a real choice for our future. Since launching the campaign, we’ve organized more than 30 events across the state and voters consistently tell me they want an open and vibrant primary process. With so much at stake, Mainers want to decide which candidate can defeat Susan Collins, defend our democracy from Donald Trump, and deliver for working families,” he said.
Newsweek reached out to spokespersons for Collins, Mills and other Senate candidates for comment via email.
Why It Matters
Maine generally leans Democratic, having backed former Vice President Kamala Harris by about seven points last November, but Collins has handily won reelection in the past due to her more moderate policy positions and close ties to the state. Democrats, however, believe 2026 has the potential to be her closest race yet as President Donald Trump’s approval slips nationwide, and as he remains unpopular in the Pine Tree State.
National Democrats view Mills, who has also won by wide margins in her two gubernatorial races, as a top recruit for the race. But others are less sold on the idea of her candidacy, believing that other Democrats already in the race such as Graham Platner, whose campaign has garnered nationwide attention, could make for a stronger candidate.
What To Know
Maine is likely a must-win for Democrats hoping to reclaim control of the Senate, where Republicans currently hold a 53-47 majority. Collins is the only Republican in a Harris-won state up for reelection. Democrats also view an open race in battleground North Carolina as a prime pickup opportunity, but other potential flips would require them to win more conservative territory.
Mills will bring high name recognition into the race, as voters are already familiar with her from her stint as attorney general and governor. She flipped the governor’s office in 2020, winning by about seven points, and won reelection in 2022 by nearly 13 points against former Governor Paul LePage. She is unable to run for reelection due to term limits.
But she may face a competitive primary against Platner, Maine Beer Company co-founder Dan Kleban and Wood, the former President of End Citizens United, all of whom have already announced their campaigns.
Polling on the Senate race remains limited despite its importance for the midterms.
Polls have generally found that Mills enjoys stronger approval than Collins.
A University of New Hampshire poll from over the summer found that 14 percent of Mainers view Collins favorably, while 57 percent view her unfavorably. An additional 26 percent were neutral. Meanwhile, 51 percent of Mainers view Mills favorably and 41 percent unfavorably. Only 7 percent were neutral on Mills, according to the survey, which surveyed 846 Mainers between June 19 and June 23. It had a margin of error of plus or minus 3.4 percentage points.
A Pan Atlantic Research poll yielded better results for Collins, finding that 49 percent of Mainers view her favorably and 45 percent view her unfavorable. It found that 52 percent of respondents viewed Mills favorably, while 44 percent viewed her unfavorably. It surveyed 840 likely voters from May 12 to May 26, and had a margin of error of plus or minus 3.5 percentage points.
Morning Consult found earlier this year that Mills had a net approval rating of +2—making her the least popular Democratic governor in the country—though Collins’ approval was -16. That poll took place from April to June of this year, and the sample sizes varied by state.
Polls in 2020 were notably off in Maine. Although surveys showed former Maine House Speaker Sara Gideon with a lead, Collins ended up prevailing with just over 50 percent of the vote.
Mills, viewed as a more centrist Democrat, engaged in a high-profile debate with the White House over Trump’s efforts to deny states funding over transgender athletes, telling him “We’ll see you in court.”
What People Are Saying
Senator Bernie Sanders, a Vermont independent, wrote on X Thursday: “Graham Platner is a great working class candidate for Senate in Maine who will defeat Susan Collins. It’s disappointing that some Democratic leaders are urging Governor Mills to run. We need to focus on winning that seat & not waste millions on an unnecessary & divisive primary.”
Pollster Adam Carlson wrote on X in August: “Sometimes to take out a modern political anomaly like Susan Collins, you need to try something different Janet Mills has been a good governor, but she’s 77, not especially popular, and has been in politics since 1980 Graham’s background might be unusual, but he’s got the juice.”
Commentator Russel Drew wrote on X on Friday: “We need to see some new, legit polling about #MESEN. The oyster farmer is absolutely an interesting candidate, but Gov. Mills has already won statewide twice. F*** our feelings. Let’s see the data.”
Anna Palmer, CEO of Punchbowl News, said during The Daily Punch podcast: “This is a huge get for Senat Minority Leader Chuck Schumer, who is on a recruiting tear. But Mills will have to contend with a crowded field of Democratic challengers who didn’t wait to jump in while she made up her mind. This is something that Democrats have been waiting for, and it seemed like she was taking her sweet time to get into the race, and now it is finally here. This could potentially be a problem for Susan Collins.”
What Happens Next?
Mills and other candidates will spend the coming months making their cases to voters about why they are the best candidate to challenge Collins in the Senate race. Forecasters give Collins an edge—both the Cook Political Report and Sabato’s Crystal Ball classify the race as leaning Republican.
Graham Platner at home in Maine. Photo: grahamforsenate.com
When Senator Susan Collins of Maine appeared at a ribbon-cutting in the small town of Searsport this week, protesters awaited her. A now-viral video of the event shows Collins, a moderate Republican, at something of a loss. “Shame! Shame! Shame!” protesters shouted at her, until she said, “I have a suggestion. Would you listen to the suggestion?” One protester had an idea of their own. “Vote Graham Platner!” they replied.
Platner was national news by the time Collins arrived in Searsport. On August 19, he announced that would run as a Democrat to unseat Collins, who has been in the Senate since 1996 and chairs the powerful Appropriations Committee. The state of Maine has become “essentially unlivable” for working-class people on her watch, he said in a campaign video, and he was “deeply angry.” In interviews, Platner has avoided labels, including “liberal” or “leftie,” but he also hasn’t shied away from topics that Democratic leaders often avoid. “People are being kidnapped into unmarked vans by masked police. There is a genocide happening in Palestine. Literal billionaires have taken over our government. And all Democratic leadership can do is send us another fundraising text?” he recently posted on X.
Though Platner is new to national politics, he’s familiar to the residents of Sullivan, Maine, where he was raised and lives currently. He is an oyster farmer and the town harbormaster, a veteran of the U.S. Marine Corps and the U.S. Army who served four tours in Iraq and Afghanistan, and he is still a competitive shooter. He entered the race against Collins at a vulnerable moment for her with her popularity declining — though she has defied expectations and polls in the past.
Platner’s pitch to Maine voters is not solely about Collins. He is a critic of “oligarchy,” as he said in his campaign video, and has focused much of his energy on a cost-of-living crisis that is making Maine unaffordable for many of its residents. Platner has a long road ahead — he already has primary competition, and state Democratic officials hope Maine’s septuagenarian governor, Janet Mills, will enter the race. Nonetheless, he has achieved startling momentum during the first week of his campaign. On Labor Day, he’ll appear in with Senator Bernie Sanders and Troy Jackson, a former state senator who’s running to replace Mills as governor. I spoke to Platner on Thursday about his new campaign and how he arrived at a platform that includes Medicare for All.
I want to start with Susan Collins. She’s been in the Senate since 1996, and conventional wisdom says that because she has that seniority, it’s important to keep her around. What’s your take on her legacy and what it has meant for the people of Maine? I think at its core, one of the reasons I’m running is that in the 30 years that Susan Collins has been in the Senate, things have gotten materially worse for working-class Mainers. For me, that’s the baseline. If you’ve been there for that much time and you’ve accrued as much power as I continue to be told that she has accrued, then where is it when it comes to doing things for working-class people in the state of Maine?
Because things are worse now. Our hospitals are falling apart. We have an affordability-and-housing crisis and it is not just ours; it’s nationwide. But frankly, that’s what being a U.S. senator is all about: fixing larger systemic problems. The Senate is one of those places where you can accrue an immense amount of power through seniority. She’s waited a long time to be head of the Appropriations Committee, and she’s there now. And yet what has it given us? I think if you went around the state of Maine and asked people, “Has your life gotten materially better since Susan Collins became head of the Senate Appropriations Committee?,” they’re all going to say, “Absolutely not.”
Can you say more about Maine’s housing costs in particular? I live in a small town on the coast. We have some very, very nice summer homes. We also have a lot of people living hardscrabble lives in a prefab or a mobile home. Eastern Hancock County is poor. People struggle real hard. People work really, really hard. There was a time, though, when that kind of hard work could still keep you in your house. It could put good food on your table. You could even save. You could send your kids to college. I know guys who are clammers who sent their kids to college with the money they made. Those days are over.
The housing-affordability crisis is such a systemic issue. I would love to just tie it to Maine, but it’s obviously not the case. A friend of mine works at the store where I get my breakfast, and she’s born and raised here, and wants to stay here, but she is thinking about leaving because she spends more than 50 percent of her monthly income on rent and can’t buy a house. She’s looked at going elsewhere, and she’s not sure where she can go because it’s the same problem everywhere else. So the problem manifests itself clearly in the rising cost of goods and the fact that wages have remained stagnant.
I know a lot of guys who have construction gigs or are contractors. The tariff uncertainty has driven prices for them up 20, 30, 40 percent. So now there are projects that were being done that aren’t being done because essentially we have a self-made supply-chain crisis and it is impacting people in material ways. Deleterious isn’t even the right word for it. People can’t live around here anymore. It’s getting effectively unlivable and that’s not even talking about the health-care problem, which is its own disaster in the making as we speak.
Maine also has an aging population. In your view, what would need to change in order for Maine to be the sort of place where a working-class person can comfortably retire? One, we need to fix retirement in this country. There was an age when there were three legs of the retirement pedestal. You’ve got social security; you had pensions, generally built out from strong labor unions; and you had 401ks, which are supposed to be supplemental. Social Security has been attacked for decades. Benefits have been reduced. To me, it’s all insane because if we just remove the cap, then we fund Social Security forever and always and expand benefits.
Here in eastern Maine, if we had Medicare for All and we had accessible health care that people at the moment of care did not have to pay money for, people could take care of themselves and be healthier for longer. It’s also a whole bunch of money that you could use that to save and save for retirement. What would eastern Maine look like if everyone in eastern Maine didn’t have to worry about paying for health insurance or work a job they hated to give them access to health insurance?
You could have an economy that is booming and that is full of people that want to live here and move here. We have none of that right now, and that’s why this place is in many ways dying, and it’s not through any fault of the people that live here.
You enlisted in the Marine Corps and later served in the Army. Why did you decide to enlist? And how did your experiences in the military shape your views? I’d always felt a real sense of duty. I always wanted to belong to something that was bigger than me, and here in the United States, military service, certainly for younger people, that’s a place that you get to do that. I also grew up in eastern Maine and I wanted to see the world. I wanted adventures, and I read too much Hemingway when I was in high school. I wanted to be Robert Jordan.
So I joined the Marines and I joined the infantry and deployed multiple times to Iraq and Afghanistan. Wound up in the Army. My experiences in many ways shaped my disillusionment. I was already skeptical. I protested the war in Iraq before I fought in it. I still went because I felt like I had some kind of duty to go. I tried to stop it. We couldn’t stop it. I had some feeling that maybe it was better that I go than somebody else.
In my time overseas, I began to become very, very critical of American foreign policy, which in many ways began to make me deeply critical of our system. And I began to look at things through this lens: If we continue to not accomplish the things I thought we were trying to accomplish, then I have to reframe the question and start to wonder, Well then, what are we trying to do? And the answer I came to for American foreign policy and a lot of other things is that we have a system that is built to make a very small number of people very wealthy and powerful. And we will expend an immense amount of capital, we will shoulder an immense amount of human suffering, in the service of that. That made me very, very angry for a long time. I still am in many ways, although I’ve definitely found better places to channel it. Hence this.
Can you say more about your transition out of the military and how it influenced you politically? When I got home from my fourth tour, I was suffering from all the stuff that you would expect infantrymen to suffer from. I definitely self-medicated. About six weeks to two months after I got back from my fourth tour, I got a DUI. I was in this place where not only was I having all of the normal responses to that kind of trauma, I was also going through this immense emotional disillusionment where I began to realize that everything I had done, everything I’d taken part in, all this violence and horror had quite possibly been in the service of nothing good.
And that was very hard. To this day, honestly, it makes me emotional. Even saying these words out loud. This still is a thing that I struggle with deeply, in the sense that trying to tie something I’m very proud of, which is my military service, to the fact that I felt like I was in many ways taken advantage of by the larger system. I know I’m not the only one that feels this way. A lot of guys I served with have very similar problems and very similar feelings.
Then I finally got to the VA and got care, and I got treated for PTSD. And through that, I got access to health care, I got access to a lot of foundational support, which allowed me to build a really spectacular, fulfilling life that I’ve lived now for almost a decade. It was that kind of support that allowed me the freedom to start a small business, allowed me the freedom to buy a home. All these things that allowed me to move back to Maine and get engaged in my community and fall back in love with this place, that came from the support I got from the VA. And I’ve just gotten to a point where I think that that freedom, that support, should be accessible to all Americans. You shouldn’t have to go fight in foreign wars and watch your friends die just to get the basic foundation of living a good life in this country. I find that frankly abhorrent.
My husband was a Marine, and he’s told me the transition period can be very difficult. Even if you haven’t been in combat, you’ve had so much structure, and you have a purpose, and then all of a sudden — It goes away.
It goes away. And the VA has been very important to him in helping him navigate that. Did your experiences with the VA inform your current support for Medicare for all? One thousand and ten percent, yeah. The VA saved my life. My body was a wreck. I have herniated discs in my back, my knees were banged up. I mean, I was in the grunts for a while, and it’s hard on your body. And my mind was not doing well. I had PTSD. I was blown up a lot. I was hit by multiple IED strikes and RPGs impacting my position. So there were all these elements of being that close to blasts a lot. There were symptoms that I for a long time did not recognize were symptoms. I also came out of the infantry, so I had this masculine bravado thing, like, Oh, it’s fine, I’ll deal with it. And by dealing with it, I meant ignoring it and drinking a bit too much, which is not actually, it turns out, a successful strategy for overcoming trauma. Who knew?
So in 2016, I came back to Maine. The Maine VA is spectacular. They reached out to me, they got me the care I needed. I started going to regular therapy, all these things that for a long time I knew that maybe would be helpful, but I just shoved it away. And my life entirely turns around. It all comes from that direct support. As a small-business owner, I often get asked to talk at these small business-oriented Zoom meetings or meetings of people who are curious about how a small business in the coast of Maine can succeed. They’re always like, “How did you do it?” “Oh, easy. The VA gives me free health care and helps me pay my mortgage.”
That’s how I got to start a small business. If everybody else could do that too, they too could start a small business. So that, for me, has laid the foundation. I got material support and that allowed me to live a better life. And I am convinced that if we gave that kind of support to all Americans, we would have a much more vibrant economy, a much more vibrant society. I don’t think there is anything valuable, frankly, except to maybe a few people who own the apps, in convincing people that hustle culture is the only way to live. People working all day every day at things that they do not love is not how you build a successful society. It just isn’t. And we need to give people the freedom to do that.
You’ve spoken of oligarchy in your early campaign materials. Senator Elissa Slotkin of Michigan has suggested that oligarchy is not a word that resonates with working-class Americans. Why did you decide that it was important to use that word, and what do you think it means to the people you’re talking to in Maine? I use it because I think it’s literally the accurate term. When I go on Wikipedia and look at the definition and then I see the world we live in, I see a lot of similarities. Also, I’ve read a number of academic papers in which it has been argued quite forcefully that the system we currently live in is in fact an oligarchy. So that’s why. And no disrespect to anyone else, but I actually think the American electorate is much more intelligent than a lot of people give it credit for. I think that people can understand concepts that may seem academic. And I know this because I live in a small town. I use that word in conversation, and people do not look at me like I’m confusing. They understand. So I guess, for me, that’s why I use it. It’s the right term, and I think it is not inaccessible in any way.
This is sort of related, but how are you tapping into what seems to be an anti-Establishment feeling within the American electorate right now? I think you focus specifically on the things that unite pretty much all working people in the United States. Health care, housing, child care, a feeling that they have watched immense amounts of money get spent on horrific foreign wars while they’ve gotten none of the things they need. Talk about those things. People respond to the material conditions that are their lives. I believe that. I believe it because I see it every day. I don’t have to read some focus-group paper on how we should talk to working-class people. I make $50,000 a year, and I live in a town of a thousand. I’m a working-class person who lives in a working-class town. I don’t believe in magic words. There’s this thing right now where everyone’s like, “Well, what if we change the words?” Then we’ll message differently. And that’s insane. Again, I don’t think people are idiots. It’s not a messaging problem.
People know that when you’re trying to tailor the message, it’s because you’re not trying to change the content or the actual context of what you are saying. The discussion about how we need to use different words, I find it so absurd because by openly having that conversation, you are stating that you don’t want to change anything. You just want to change how you talk about it. I think people see this stuff as just a bunch of weird focus groups politicking, and that’s what they hate. It’s what I hate. It’s why I’m here. It’s why I’m doing this. I can’t stand that stuff. I think it’s ineffective. I think it alienates people. I also think that it’s the reason a lot of people have given up.
So you don’t get dragged into that stuff. You don’t have to run away from your ideals. You don’t have to sell anybody out. You don’t have to say that you believe something you don’t or that you don’t believe something that you do. What you have to do is engage people with the reality they know to be true, which is that they live in a society that is not built for them at all. They live in a society that is built to enrich very, very few people, and it is meant to extract as much wealth and time and energy out of them for that group’s benefit as possible. Everybody knows this. Republicans know it, Democrats know it. Progressives know it. Trump voters know it. Go across the working class of this country, and ask people if they think they live in a society that is designed for their benefit. Not a single one of them is going to say “yes.” And the way that you tap into that is you tell them the truth that they already know. You say that is correct. The people who are screwing you are way up there, and they have accrued all the money and all the power, and they’re going to continue doing it until we start building power of our own.
How do you plan to sustain your current momentum and build relationships with voters across such a rural state? Well, that part is in some ways easy. I’m 40. I have an immense amount of energy. I’m a former bartender, and I love talking to people. And I’ve got a Toyota Tundra with at least 400,000 miles left on it as long as I do the oil change. So that’s how. I think we’ve got 22 town halls lined up over the next two months. The plan is me and my wife are going to get in the truck and we’re going to drive all over the great state of Maine, and we’re going to talk to quite literally everybody. And I want to hear from everybody.
The other thing is that I’m not going out there to go talk to Democrats or talk to Republicans. I want to talk to everybody. They’re open town halls. I want everyone to come. I very much think that we are in the situation that we are in because we have a political Establishment that stopped talking to working people, stopped hearing about the material realities that people live in and that are the outcomes of policy. We need to reengage with reality. We need to reengage with what happens when you do policy a certain way. And the only way to do that is to go out there and talk to them. So that’s what we’re going to do. That’s the plan.
This interview has been edited for length and clarity.
WASHINGTON – The Senate will pursue a spending increase next year of about 3.4% for defense and 2.7% increase for non-defense programs under an agreement reached by top Democratic and Republican lawmakers on the Senate Appropriations Committee, setting up a certain clash with the House, which is pursuing less spending in both categories.
Under an agreement reached last year by President Joe Biden and then-Speaker Kevin McCarthy, spending was set to increase 1% for defense and non-defense programs in fiscal year 2025, bringing the tallies to about $780.4 billion for non-defense and $895.2 billion for defense.
Some senators said the increase would not keep up with inflation and would be tantamount to a cut for many programs.
The bipartisan Senate agreement unveiled this week will provide $13.5 billion more in emergency funding for non-defense programs and $21 billion more for defense programs than the Biden-McCarthy agreement provided.
Meanwhile, House Republicans are pursuing a more austere course, allowing for a 1% increase for defense, but significant cuts for non-defense, coming to a roughly 6% cut on average, though some programs would be cut much more and some GOP priorities not at all.
While some Republican senators were clamoring for more defense spending, Democrats insisted on similar treatment for non-defense programs.
“I have made clear that we cannot fail to address the insufficient funding levels facing us and that I absolutely will not leave pressing nondefense needs behind,” said Sen. Patty Murray, the Democratic chair of the Senate Appropriations Committee.
Murray has been negotiating with Sen. Susan Collins, the ranking Republican on the committee, on discretionary spending for next year. Such spending does not include mandatory spending on major entitlement programs, namely Social Security and Medicare, which represent about two-thirds of annual federal spending and does not require an annual vote by Congress.
Collins said the U.S. is facing one of the most perilous security environments in the last 50 years and that threats from Iran, Russia and China “must be met with the resolve to invest in a stronger national defense.”
“Under this agreement, additional funding for our military would be accompanied by efforts to halt the flow of fentanyl at our borders, invest in biomedical research, and maintain affordable housing programs,” Collins said.
The Republican-led House has been acting more quickly on spending than the Senate. It has passed four of the 12 annual spending bills so far while the Senate has not yet passed any. However, all four House bills have generated veto threats from the White House, drew widespread Democratic opposition and have no chance of passing the Senate in their current form.
That means a protracted, monthslong battle that will likely require one or more stopgap spending bills to keep the federal government fully open when the new fiscal year begins Oct. 1.
With the elections and lawmakers spending so much time away from Washington, Congress is not expected to get the final spending bills over the finish line until November at the earliest. Final passage could also be pushed off to next year if one party manages to win the White House and both chambers of Congress, as that would give them more leverage in negotiations.
Rep. Tom Cole, the Republican chairman of the House Appropriations Committee, said the spending increase senators are seeking for non-defense programs will prove problematic in the House.
“Look, we have a $1.9 trillion deficit. At least House Republicans are trying to do something about it,” Cole said.
The agreement that leaders of the Senate Appropriations Committee reached on spending comes as the committee was set to take up its first three spending measures on Thursday.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
PORTLAND, Maine – The high electricity consumption of a home, its cardboard-covered windows and odor of marijuana drew law enforcement’s attention to an illicit grow operation off the beaten path in rural Maine.
The bust of the home with a hidden grow operation and seizure of nearly 40 pounds (18 kilograms) of processed marijuana marked the latest example of what authorities describe as a yearslong trend of foreign nationals to exploit U.S. state laws that have legalized cannabis for recreational or medical use to produce marijuana for the illicit markets in the U.S.
The U.S. Drug Enforcement Administration is investigating international criminal organizations that are operating illegal marijuana grows in about 20 states, including Maine, Attorney Garland Merrick Garland told the Senate Appropriations Committee this week, in response to a question raised by Republican Sen. Susan Collins of Maine.
Federal law enforcement officials said there currently are about 100 illicit grow operations in Maine, like the one in Passadumkeag, about 60 miles (96.5 kilometers) north of Bangor, and about 40 search warrants have been issued since June.
In Passadumkeag, Xisen Guo, a naturalized U.S. citizen born in China, has been accused of transforming the house into a high-tech, illicit grow operation, according to court documents unsealed this week.
He was ordered held without bail Friday on federal drug charges, making him the first person to be charged federally in such a case in Maine….
WASHINGTON – The Senate is laboring to approve a $460 billion package of spending bills in time to meet a midnight deadline for avoiding a shutdown of many key federal agencies, a vote that would get lawmakers about halfway home in wrapping up their appropriations work for the 2024 budget year.
While the Senate is expected to approve the measure, progress was slow in getting the bill to a final vote. Senators were expecting debate to go late into the night. The package advanced on a key test vote Friday afternoon to limit debate, but it remains to be seen if senators can avoid a short shutdown into the weekend as some lawmakers voice concerns about the amount of spending in the bill.
“I would urge my colleagues to stop playing with fire here,” said Sen. Susan Collins, the top-ranking Republican member of the Senate Appropriations Committee. “It would be irresponsible for us not to clear these bills and do the fundamental job that we have of funding government. What is more important?”
The measure, which contains six annual spending bills, has already passed the House and would go to President Joe Biden to be signed into law. Meanwhile, lawmakers are negotiating a second package of six bills, including defense, in an effort to have all federal agencies fully funded before a March 22 deadline.
In the end, total discretionary spending set by Congress is expected to come in at about $1.66 trillion for the full budget year ending Sept. 30.
The votes this week come more than five months into the current fiscal year after congressional leaders relied on a series of stopgap bills to keep federal agencies funded for a few more weeks or months at a time while they struggled to reach agreement on full-year spending.
Republicans were able to keep non-defense spending relatively flat compared to the previous year. Supporters say that’s progress in an era when annual federal deficits exceeding $1 trillion have become the norm. But many Republican lawmakers were seeking much steeper cuts and more policy victories.
The House Freedom Caucus, which contains dozens of the GOP’s most conservative members, urged Republicans to vote against the first spending package and the second one still being negotiated.
Democrats staved off most of the policy riders that Republicans sought to include in the package. For example, they beat back an effort to block new rules that expand access to the abortion pill mifepristone. They were also able to fully fund a nutrition program for low-income women, infants and children, providing about $7 billion for what is known as the WIC program. That’s a $1 billion increase from the previous year.
Republicans were able to achieve some policy wins, however. One provision, for example, will prevent the sale of oil in the Strategic Petroleum Reserve to China. Another policy mandate prohibits the Justice Department from investigating parents who exercise free speech at local school board meetings.
Another provision strengthens gun rights for certain veterans, though opponents of the move said it could make it easier for those with very serious mental health conditions like dementia to obtain a firearm.
”This isn’t the package I would have written on my own,” said Sen. Patty Murray, the Democratic chair of the Senate Appropriations Committee. “But I am proud that we have protected absolutely vital funding that the American people rely on in their daily lives.”
Sen. Rand Paul, R-Ky., said one problem he sees with the bill is that there was too much compromise, and that led to too much spending.
“A lot of people don’t understand this. They think there is no cooperation in Washington and the opposite is true. There is compromise every day on every spending bill,” Paul said.
“It’s compromise between big-government Democrats and big-government Republicans,” he added.
Still, with a divided Congress and a Democratic-led White House, any bill that doesn’t have buy-in from members of both political parties stands no chance of passage.
Even though lawmakers find themselves taking up spending bills five months into the fiscal year, Republicans are framing the process as improved nonetheless because they broke the cycle of passing all the spending bills in one massive package that lawmakers have little time to study before being asked to vote on it or risk a government shutdown. Still, others said that breaking up funding into two chunks of legislation war hardly a breakthrough.
The first package now making its way to Biden’s desk covers the departments of Justice, Veterans Affairs, Agriculture, Interior and Transportation, among others.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
While it’s common knowledge that citizens have very little influence on elected officials, The Onion asked U.S. politicians how their constituents feel about a ceasefire in Gaza, and this is what they said.
Sen. Elizabeth Warren (D-MA)
Sen. Elizabeth Warren (D-MA)
“A cease what? I’ve never heard that word in my life.”
Rep. Steve Scalise (R-LA)
Rep. Steve Scalise (R-LA)
“My constituents routinely vote in favor of having blood on our hands.”
Sen. Chuck Schumer (D-NY)
Sen. Chuck Schumer (D-NY)
“Does AIPAC count as a constituent?”
Vice President Kamala Harris
Vice President Kamala Harris
“Am I a politician? Gee, that’s flattering.”
Rep. Hakeem Jeffries (D-NY)
Rep. Hakeem Jeffries (D-NY)
“One more word about a ceasefire, and I’m ordering Israel to bomb south Brooklyn.”
Sen. Mitt Romney (R-UT)
“Oh, while I’m at work the nanny is the one who looks after the constituents.”
Sen. Bob Menendez (D-NJ)
“My constituents know I have been calling for a cease-ceasefire since day one.”
Sen. Susan Collins (R-ME)
Sen. Susan Collins (R-ME)
“Representatives are public servants. That means it’s my job to listen to what my constituents have to say, internalize it, and then do whatever I want.”
Rep. Nancy Pelosi (D-CA)
“I have genuinely not thought about another human being since 1998.”
Sen. Thom Tillis (R-NC)
“When I got elected in 2014, my campaign pitch was ‘You wanna see a dead body?’”
Gov. Gavin Newsom Of California
Gov. Gavin Newsom Of California
“Constituents…constituents… Oh, you mean the blurred shapes I sometimes see before meetups with donors?”
Sen. Tom Cotton (R-AR)
“Hmm… What is this ‘feel’?”
Sen. Tammy Duckworth (D-IL)
Sen. Tammy Duckworth (D-IL)
“My Illinois colleague Dick Durbin, who called for a ceasefire, obviously has different constituents than I do.”
Sen. Mitch McConnell (R-KY)
Sen. Mitch McConnell (R-KY)
“I don’t know. I can’t hear frequencies coming out of the mouths of people who make below $400k.”
Sen. John Cornyn (R-TX)
“They elected me to kill people, so that’s what I’m gonna do.”
Rep. Ken Calvert (R-CA)
“I have but one constituent, and their name is Lockheed Martin.”
Gov. Kathy Hochul Of New York
Gov. Kathy Hochul Of New York
“I know what they want. I just think they are stupid and don’t respect them. Make sense?”
Sen. Tommy Tuberville (R-AL)
Sen. Tommy Tuberville (R-AL)
“A ceasefire is a sacred bond between one man and one woman. Anything else is a sin.”
Former President Barack Obama
Former President Barack Obama
“No constituents anymore, motherfuckers! You people can’t goddamn touch me! I can say whatever the hell I want. Fuck all of you!”
Sen. Chuck Grassley (R-IA)
Sen. Chuck Grassley (R-IA)
“My term doesn’t expire until 2068.”
Sen. John Hickenlooper (D-CO)
Sen. John Hickenlooper (D-CO)
“Constituents? Oh, do you mean money? The money says to burn it to the ground.”
Sen. J.D. Vance (R-OH)
“I assume all my constituents were also given a full ride by the Federalist Society.”
Sen. Kyrsten Sinema (I-AZ)
Sen. Kyrsten Sinema (I-AZ)
“We often think about others so much that we forget to think about our own feelings. The question is, do I want a ceasefire?”
Gov. Greg Abbott Of Texas
Gov. Greg Abbott Of Texas
“Most of my constituents are guns, and they love firing. It’s the equivalent of orgasm to them.”
With the Palestinian death toll rapidly rising and conditions in Gaza deteriorating into a humanitarian crisis amid the Israeli invasion, The Onion asked politicians why they will not endorse a ceasefire, and this is what they said.
Sen. Chuck Grassley (R-IA)
Sen. Chuck Grassley (R-IA)
“I haven’t gotten to experience a world war since my boyhood.”
Speaker Mike Johnson (R-LA)
Speaker Mike Johnson (R-LA)
“I lament even those momentary pauses in violence when IDF soldiers have to stop shooting to reload.”
Rep. Hakeem Jeffries (D-NY)
Rep. Hakeem Jeffries (D-NY)
“A ceasefire would send the message to Palestinians that we give a shit whether they live or die.”
Sen. Tom Cotton (R-AR)
“I have a perfect record when it comes to ethnic cleansing, and I’m not about to tarnish that now.”
Vice President Kamala Harris
Vice President Kamala Harris
“Well-behaved missiles seldom make history.”
Sen. Marsha Blackburn (R-TN)
Sen. Marsha Blackburn (R-TN)
“Last I checked, there were still some Palestinian civilians left.”
Sen. Susan Collins (R-ME)
Sen. Susan Collins (R-ME)
“An open-air prison actually sounds nice. What do I look like, some kind of abolitionist?”
Sen. Tammy Baldwin (D-WI)
Sen. Tammy Baldwin (D-WI)
“That would stop the genocidal momentum the IDF has built.”
Rep. Mike Rogers (R-AL)
“Because I’m making money off this. What don’t you understand?”
Sen. Ted Cruz (R-TX)
“Shhh, keep your voice down. Saying that word in Texas is illegal.”
Sen. Amy Klobuchar (D-MN)
Sen. Amy Klobuchar (D-MN)
“The people of Gaza are free to start making campaign donations whenever they please.”
Rep. Steve Scalise (R-LA)
Rep. Steve Scalise (R-LA)
“Poked myself in the eye with a kebab skewer. Now all must pay.”
Rep. Dean Phillips (D-MN)
Rep. Dean Phillips (D-MN)
“Based on the last election, I figure my presidential campaign can only be helped by the absence of a strong stance on anything.”
Rep. Jim Jordan (R-OH)
“Ugh, just come back to bed. Can’t we go one night without getting into a screaming match?”
Sen. John Fetterman (D-PA)
Sen. John Fetterman (D-PA)
“When you become a U.S. senator, they tell you that you’ll be legally castrated if you ever try to stop any wars.”
Sen. Tommy Tuberville (R-AL)
Sen. Tommy Tuberville (R-AL)
“I mean, if it were up to me, they’d be air-striking the shit out of the continental U.S. as well.”
Sen. Lindsey Graham (R-SC)
Sen. Lindsey Graham (R-SC)
“That’s actually a good idea. If we can trick the Palestinians into thinking we’re not going to fire anymore, they’ll be easier to shoot!”
Sen. Elizabeth Warren (D-MA)
Sen. Elizabeth Warren (D-MA)
“The Consumer Financial Protection Bureau would never allow the U.S. to finance the Israeli military if it wasn’t perfectly safe.”
Sen. Bernie Sanders (I-VT)
Sen. Bernie Sanders (I-VT)
“I don’t want to lose my widespread appeal among moderates.”
Sen. Cory Booker (D-NJ)
“I support firing both missiles and a message of love at Palestine.”
WASHINGTON ― Donald Trump’s sweeping plans to remake the presidency ― and give himself more power than ever if he is elected to the White House again ― have met with a chilly reception from members of his own party in Congress.
The former president and his allies are vowing to bring independent federal agencies like the Federal Trade Commission and the Federal Communications Commission under direct presidential control, revive the practice of “impounding” funds appropriated by Congress, and strip employment protections for thousands of civil servants in the executive branch, ostensibly to replace them with Trump’s own chosen political appointees.
The proposals, outlined in a New York Times story earlier this week, stem from years of Trump’s grievances about the so-called “deep state,” the media, and Congress itself standing in the way of his autocratic tendencies. They hinge on a thesis, long popular on the right, called “unitary executive theory,” a model where the president has sole power over the entire executive branch of government, including independent agencies and even federal prosecutors ― like, say, the ones investigating the president himself.
Sen. J.D. Vance (R-Ohio), who has already endorsed Trump’s bid for a second term, said Trump’s power grab would be necessary to rein in the power of bureaucrats and agency officials. He called Trump’s plan to give the presidency even more power “necessary to have a constitutional republic.”
“To have true separation of powers, the president has to have the prerogative over the administration of laws,” Vance told HuffPost. “If you have all these alphabet soup agencies where the bureaucrats can’t be fired and aren’t under control of the president, you’ve effectively created a fourth branch of government totally unaccountable to the people. That’s a real problem.”
“What we’re trying to do is identify the pockets of independence and seize them,” Russ Vought, Trump’s former director of the Office of Management and Budget and a leading proponent of the power grab, told the Times.
There is some debate on the left about how seriously to treat the scheme, and whether it’s just campaign fodder that likely wouldn’t become law. For now, it is clear Democrats in Congress would unanimously oppose the plans, with at least some Senate Republicans prepared to join them. An expansion of presidential power would ultimately come at a steep cost to members of Congress, who prize their ability to oversee industries and appropriate funds.
Top Republican appropriators also voiced their opposition to the idea of reviving the president’s impoundment authority. Congress in 1974 passed a law banning the tactic after a fight with President Richard Nixon, who withheld $40 billion in funding that Congress had passed during in his first term in office. Reviving the practice would require another act of Congress.
“The Constitution is very clear about the role of Congress and the power of the purse, so I would not do so,” Sen. Susan Collins (R-Maine), the top Republican on the Senate appropriations committee, told HuffPost.
“I don’t think I agree” with the plans of the Trump team, Sen. Shelley Moore Capito (R-W.Va.), who also serves on the committee, said. “I want to have the independence of an appropriator.”
Republicans who serve on the Senate commerce committee were similarly wary of ways Trump could infringe on their power.
“I think those are independent agencies designed to be that way for obvious reasons, so I’m not sure what that accomplishes,” Sen. John Thune (R-S.D.), the No. 2 Senate Republican, told HuffPost, when asked if he would support bringing the FTC and FCC under presidential control.
Sen. Ted Cruz (R-Texas) ― chair of the commerce committee, which oversees the two agencies ― didn’t endorse the plan, either. He instead shifted to bashing FTC Chair Lina Khan, a top target of Republicans due to her aggressive strategy in taking on big tech companies.
“I will say Lina Khan’s abuse of power of the FTC is going to add considerable momentum to congressional efforts to rein in out-of-control, supposedly independent agencies,” Cruz said.
Sen. Roger Wicker (R-Miss.), who also serves on the commerce committee, said he “would have to look very, very carefully” at any proposal to bring the agencies under executive control. He expressed his desire to see the FTC and FCC act in a nonpartisan manner.
According to the Times, Trump’s allies are drafting an executive order that would require independent agencies to submit actions to the White House for review. The move, if enacted under a second Trump presidency, would likely face a legal challenge.
“I think it’s very important for us to remember that he can’t just wave a wand and invalidate the statutory structure for these expert agencies,” Sen. Brian Schatz (D-Hawaii) said of the twice-impeached former president. “It doesn’t matter what he thinks. The law is the law. If he wants to change the structure of the agency, then he’s going to have to ask someone to introduce a bill.”
Schatz said that if Trump wants to change the structure of federal agencies, he should do so by appointing commissioners who agree with him.
“It’s exciting to think of the new ways that Mr. Trump would do damage, and it’s always worth worrying about, but the truth is there are statutes in place and he’s going to have to abide by them,” Schatz said.
WASHINGTON (AP) — The Federal Reserve will have to keep boosting its benchmark interest rate to a point that raises unemployment and gets inflation down from unusually high levels, two officials said in separate remarks Monday.
Susan Collins, the new president of the Federal Reserve Bank of Boston, endorsed Fed projections released last week that signaled its benchmark interest rate would rise to 4.6% by next year, up sharply from about 3.1% now.
Getting inflation down will “require slower employment growth and a somewhat higher unemployment rate,” Collins said in a speech to the Greater Boston Chamber of Commerce.
Later Monday, Cleveland Fed President Loretta Mester said the Fed’s short-term rate would have to stay higher for longer than previously expected, regardless of the uncertainties surrounding the economy, such as Russia’s invasion of Ukraine and ongoing supply chain difficulties.
“When there’s a lot of uncertainty, it can be better for policymakers to actually act more aggressively, because aggressive action and pre-emptive action can prevent the worst-case outcomes from happening,” she said.
Mester also said she expects higher interest rates will raise unemployment, but disagreed with a forecast by Bank of America that the unemployment rate would rise to 5.5%.
“I do expect the unemployment rate to rise, but not to that extent,” she said.
The comments from both officials added to an ongoing debate about how badly the Federal Reserve’s rate hikes — the fastest in more than 40 years — will hurt the economy. By lifting its benchmark rate, the Fed is pushing up the cost of a wide range of consumer and business loans, including for mortgages, auto loans, and credit cards.
Collins said that, while worries are rising about a recession, “the goal of a more modest slowdown, while challenging, is achievable.”
Also Monday, stocks fell for the fifth straight day and longer-term interest rates rose amid growing fears of a global recession. The yield on the 10-year Treasury, which influences mortgage rates, jumped to 3.89% from 3.69%.
Fed officials hope their rate hikes will achieve a “soft landing” by slowing consumer and business spending enough to bring down inflation but not so much as to cause a recession.
Yet many economists are increasingly skeptical that such an outcome is likely. The Fed has lifted its key rate to a range of 3% to 3.25%, the highest in 14 years, even as the U.S. economy has already slowed. That could cause a recession in the U.S. next year, economists fear.
In a question-and-answer session after her speech, Collins also said that inflation, which reached 9.1% in June from a year earlier and has since fallen to 8.3%, “perhaps may have peaked.”
But Mester said she did not see any such signs.
“Before I conclude that inflation has even peaked, I am going to have to see several months of declines in the readings,” she said.
At a policy meeting last week, the Fed lifted its short-term rate by three-quarters of a point for the third straight time. Hikes typically are a more modest quarter-point. Fed Chair Jerome Powell, at a news conference after the meeting, said that “the chances of a soft landing are likely to diminish” as the Fed steadily raises borrowing costs.
“No one knows whether this process will lead to a recession or, if so, how significant that recession would be,” Powell said.
One challenge for the Fed is that last week it also released its quarterly economic and interest rate projections. They showed that Fed policymakers expect unemployment to reach 4.4% by the end of next year, up from 3.7% currently.
According to a rule of thumb discovered by the economist Claudia Sahm, every time since World War II that unemployment has risen by a half-percentage point over several months, a recession has followed.
Collins is one of 12 voting members of the Fed’s policymaking committee and is the first Black woman to serve as president of a regional Fed bank. She was sworn in July 1. Collins previously served as a provost and executive vice president at the University of Michigan and served on the board of directors for the Chicago Fed.
Atlanta Fed President Bostic, in an interview Sunday on CBS News’ “Face the Nation,” also said “we need to have a slow down” to get inflation under control.
“But I do think that we’re going to do all that we can at the Federal Reserve to avoid deep, deep pain,” he added.
