June inflation heats up as power, food prices bite
Consumer price index (CPI) inflation came in at 3% for June – from 2.8% in May.
Inflation has been below 3% - the bottom level of the SA Reserve Bank's target band - from March to May.
But in June, food prices continued to heat up. Food and non-alcoholic beverages were 5.1% more expensive than a year ago. Beef was a big contributor, as foot-and-mouth disease fuelled price hikes. Meat prices rose by 2.2% in the single month from May to June - and were almost 7% higher than a year before.
But the biggest surge over the past year, of more than 13%, was in prices of fruit and vegetables. Hot beverages were also 10.1% more expensive than a year ago.
Household electricity and gas prices were 11% higher than a year before, reflecting the latest Eskom price hikes.
Housing and utilities saw a month-on-month increase of 0.5%, with rent increasing 1% month-on-month.
June's inflation was still tempered by lower diesel and fuel prices - but this was reversed in July with large hikes after Israeli and US attacks on Iran triggered an oil price spike.
While slightly higher than May, June's inflation number is in line with expectations and should bolster the case for the Reserve Bank's monetary policy committee to cut the repo rate by 25 basis points to 7% on Thursday next week.
A cut is also supported by South African inflation expectations, which in the second quarter reached an almost four-year low.
Unions, households and businesses are surveyed by the Bureau for Economic Research on their expectations for inflation over the next two years, which cooled to 4.5%.
Expectations about where inflation is heading play a key role in driving prices higher. When workers expect inflation to remain high, they demand higher salary increases, which in turn drive prices higher as companies must recoup these higher costs.
The SA Reserve Bank has been pushing hard to lower SA's inflation target to 3% (from a band of 3% to 6%).
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Yahoo
an hour ago
- Yahoo
This could be the most consequential week for the economy in years
The state of President Donald Trump's economy is about to come into full view. A slew of crucial economic data is set for release this week, including the jobs report, inflation, consumer confidence and corporate earnings. We'll get the first glimpse at America's second-quarter gross domestic product, the broadest measure of the economy. And, most crucially, the Federal Reserve will decide whether to cut rates or hold steady one more time. As if that weren't enough, Trump's trade polices also come due: Friday is the administration's self-imposed deadline for settling tariff rates for all 200+ US trading partners. Trump's top economic advisers will be negotiating a trade framework with China in Sweden. And an appeals court will hear arguments this week about whether the bulk of Trump's tariffs are even legal, to begin with. Altogether, the data could paint a picture of an economy that is resilient — but slowing under the weight of Trump's dizzying tariff changes, reductions in government workers and spending, and an aggressive deportation of foreign-born workers. Here's a look at what to expect this week and why the data matters: Corporate earnings Some of the biggest names in tech are set to release earnings this week, including Microsoft, Meta, Amazon and Apple. That will set the tone for market sentiment. Tech stocks have fueled record market growth in recent months as investors focus on gearing up for AI expansion. So far, around 80% of S&P 500 companies reporting earnings this season have beaten estimates, according to FactSet. Overall, stocks have marched higher into record territory recently, supported by cautious optimism in trade deals and better-than-expected economic data. That has emboldened Trump to push harder on his trade deals, telling NBC News earlier this month that markets hit new highs because 'tariffs have been very well received.' Why it matters: Strong earnings could continue to boost the stock market, which is starting to look a bit expensive for some investors. That could also convince Trump that the market — which turned on him in April — has acquiesced to his plan for higher tariffs. Consumer confidence and sentiment Two separate reads on the way Americans are feeling about the economy are set to be released this week. Consumer confidence, as measured by Conference Board, sank to the lowest level since the pandemic when Trump slapped massive tariffs on major trading partners. Shoppers expressed concern about the negative impact on the economy and prices. But consumers are generally more optimistic now that trade deals are beginning to emerge. The consumer sentiment survey from the University of Michigan continues to show that shoppers are wary of inflation levels rising again, after the economy batted down historic price increases following the pandemic. Although sentiment has rallied back from near-record lows earlier this year, it remains depressed because of Trump's trade policy. Why it matters: Economists pay close attention to consumers' optimism, since their spending powers two-thirds of the economy — and when shoppers think prices are about to rise, they tend to pull back. The latest retail sales data shows that consumers are spending cautiously. Second-quarter GDP GDP is a key indicator of economic success and, arguably, a validation of Trump's policies. But this quarterly assessment has slumped in recent months, even shrinking in the first quarter of the year for the first time since 2022. Economists expect an improvement for the April-June quarter as imports rebalance after companies raced to front-load their purchases ahead of Trump's tariffs. They warn that, just as an inventory spike may have artificially hurt GDP in the first quarter, companies working through their warehoused goods in the second quarter may make the economy look better than it actually is. Why it matters: The US economy is large and resilient, and it has continued to support hundreds of thousands new jobs each month for years. But if Americans are getting cold feet, things could take a turn for the worse. Fed decision Trump has repeatedly — and publicly — berated Fed Chair Jerome Powell for not lowering the bank's interest rate (their recent détente notwithstanding), but the central bank is overwhelmingly expected to hold rates steady Wednesday at the conclusion of its two-day monetary policy meeting. In an unusual kink, two governors are expected to vote against the consensus of the board, which hasn't happened in three decades. With the job market still relatively strong, most Fed officials have said the economy can withstand higher rates for the time being. Meanwhile, they want to wait to see how Trump's policies of high tariffs and deportation of foreign workers impact inflation and the labor market. Why it matters: The bank is widely expected to start cutting its key overnight lending rate in September — a good sign for Americans hoping to borrow money, and especially for first-time homebuyers, who have been effectively locked out of the market with mortgage rates close to 7%. Inflation The Fed's favorite inflation gauge, the Personal Consumption Expenditures index, has been creeping higher — moving further away from its 2% goal in recent months. That's just one factor behind the central bank's position on rate cuts. Why it matters: Shoppers have been pulling forward purchases, including back-to-school items, to mitigate expected higher prices, but the July data will likely still bear the fingerprints of Trump's tumultuous trade policy: Items like furniture and toys are starting to reflect elevated costs as pre-tariff inventory is depleted. Trade deadline Trump's pause on the hefty and unpopular tariffs he rolled out in April expires on August 1. In the intervening period, the White House has scrambled to make deals with a slew of partners, announcing preliminary arrangements with the UK, China, Vietnam, Indonesia, the Philippines and Japan. As the final deadline approaches, Trump said Friday he would be sending out letters to roughly 200 countries this week unilaterally setting a range of tariff rates. 'It's basically going to say, you're going to pay 10%, you're going to pay 15%, you're going to pay maybe less, I don't know,' Trump told reporters before he left for a trip to Scotland. US markets are 'very, very fixated' on the levels that are set, and an effective tariff rate beyond 20% on major trading partners could trigger a downturn on Wall Street, one analyst told CNN. Why it matters: Trump's tariffs that are currently in effect have raised the effective US tariff rate — the average tax that US importers pay on foreign goods — from around 2% to 18%, the highest since 1934, economists at Yale's Budget Lab said in a recent report. That works out to $2,400 a year in added costs for the average American household. The US economy and markets have been able to withstand that so far. A considerably higher tariff rate could put that to the test. Trade negotiations Talks with China are ongoing, however. Treasury Secretary Scott Bessent is set to meet Monday and Tuesday with Chinese officials to iron out the details of the framework the two countries agreed upon at their London and Geneva meetings. Trump in April slapped a 145% tariff on imports from China, prompting Beijing to respond with a 125% tariff on imports from the United States. That effectively created a total embargo between the world's two largest economies before they agreed on a pause until August 12. Meanwhile, on Thursday, the US Court of Appeals will hear oral arguments about whether Trump can use his emergency powers to levy tariffs after a lower court ruled he had exceeded his authority in doing so. Why it matters: One of the Trump administration's goals is to shift China towards a more consumer-driven domestic economy, thereby reducing global oversupply of its manufactured goods. While it's unlikely that the United States will dramatically reshape Chinese President Xi Jinping's economic policy, small changes could open some of China's market to US manufacturers, while helping to increase American factory jobs. Jobs report Trump has promised a 'Made in America' revival, but the July jobs report is expected to show that average monthly employment gains have dropped to a level not seen since 2010 (excluding the pandemic-era losses). The labor force has shrunk in recent months, a potential indication of how anti-immigrant rhetoric and mass deportations are weighing on employment. In addition, the most recent report showed that the manufacturing sector lost jobs for the second-straight month — a murky development for one of Trump's benchmark economic priorities. Why it matters: America's labor market has been its strong suit for years, routinely defying expectations since the pandemic. But it's showing cracks. Americans who lose their job are now staying unemployed for longer as businesses stall on making decisions, including hiring, as the trade war continues to raise costs. 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CNBC
an hour ago
- CNBC
Here are the 4 big things we're watching in a busy week ahead for the stock market
Buckle up. It's a jam-packed week ahead, with a host of influential companies set to report alongside a Federal Reserve meeting — and, if that wasn't enough, there's fresh inflation and jobs data, too. On top of all that, we'll keep a close eye on any trade deal headlines ahead of the Aug. 1 deadline set by the Trump administration. In particular, we'll be watching for any agreement with the European Union. U.S. and Chinese officials are also set to meet in Sweden for another round of trade talks. Last week, the U.S. trade deal with Japan helped push the S & P 500 to record highs. Now, here's a closer look at what to expect in the week ahead from the Fed, the week's economic data releases and Club earnings. 1. Fed: Despite President Donald Trump 's pressure campaign, the central bank on Wednesday afternoon is widely expected to keep its benchmark overnight lending rate steady in the range of 4.25% to 4.5%, according to the CME Group's FedWatch tool . Instead, the question on investors' minds is whether a cut at the Fed's September meeting is on the table, so they'll be listening for whether Chairman Jerome Powell lays the groundwork for that during his typical post-meeting press conference. We don't expect Powell to change his tune about the Fed's data-dependency in making policy decisions, even in the face of Trump's criticism. On that note, we want to hear how Powell characterizes the resiliency seen in the labor market — initial jobless claims have dropped for six straight weeks, for example — and the inflation trends. While Trump's tariffs haven't yet led to a dramatic upturn in inflation, recent reports are showing a slight uptick , and there's a belief that U.S. companies absorbing the tariffs can only do so for so long before needing to raise prices. As of Saturday, the market put 62% odds on a quarter-point cut in September. Before the Fed's decision Wednesday, we'll get the first reading of second-quarter gross domestic product, which could be discussed during Powell's press conference. 2. Inflation: After the Fed's meeting concludes, tariff effects will stay in the spotlight thanks to the release of the June personal consumption expenditures price (PCE) index on Thursday morning. This is the Fed's preferred measure of inflation, despite the consumer price index (CPI) garnering more attention. There are some differences in the way the two gauges are calculated — particularly on housing and health-care inputs — but what stays the same is that investors are looking for tariff-related signs of inflation. For example, in the June CPI report tariff-sensitive categories like furniture and apparel showed outsized increases. For the PCE, economists polled by Dow Jones expect a 0.3% month-over-month increase and an annual rate of 2.5%. On a core basis, which excludes volatile food and energy prices, the Dow Jones consensus is for a 0.3% monthly gain and 2.7% annual increase. 3. Jobs, jobs, jobs: The big labor market event of the week is Friday's nonfarm payrolls report for the month of July, offering Wall Street a look at the pace of hiring in the face of trade policy uncertainty. As mentioned earlier, the U.S. labor market has continued to defy expectations for a material slowdown. For July, the consensus is that the U.S. economy added 102,000 jobs and the unemployment rate edged up to 4.2% from 4.1% in June, according to Dow Jones. Revisions to the prior months reports are something to watch. Ahead of Friday's release, we'll get the Job Openings and Labor Turnover Survey on Tuesday. The so-called JOLTS measures the amount of slack in the labor market, carrying implications for wage inflation. On Wednesday, payroll processing firm ADP releases its monthly look at private hiring — but, as we once again saw with the June data, it's not predictive of what the official government report will say. Thursday morning will bring the latest batch of first-time filings for unemployment insurance, known as initial jobless claims. Will it be seven weeks in a row of declines? One area of weakness in recent jobs data has been continuing claims, which suggests that while layoffs are going in the right direction, it's taking people time to get rehired. 4. Earnings: There are seven Club names reporting in the week ahead. All revenue and sales estimates provided below are courtesy of LSEG. Starbucks kicks off the action Tuesday night, and investors will be searching for additional signs of progress in CEO Brian Niccol's revitalization efforts. In its mostly disappointing April earnings report, Niccol had good things to say about the roughly 700 stores where it was piloting staffing and deployment changes. We hope that continued, with the benefits spreading to more cafes across the country. The FactSet consensus is for Starbucks to report its sixth straight quarter of same-store sales declines, at minus 1.3%. While necessary to turn the business around, Niccol's investments aren't cheap, so we don't expect strong profitability metrics this quarter, either. We do, however, hope that management is mindful that telling investors that earnings per share isn't a great metric to judge the turnaround may not go over well. Analysts expect total revenue of $9.31 billion and earnings per share of 65 cents. Meta Platforms reports after the close Wednesday. An expensive question on investors' minds: How much has Meta's spending spree on artificial intelligence talent cost so far? In April, the Instagram parent lowered its total expense guidance to $113 billion to $118 billion, down $1 billion on both ends of the range. Will that need to be revised higher? Similarly, will Meta's capital expenditures guidance of $64 billion to $72 billion be adjusted to account for higher spending on AI chips and data centers? The continued strength of Meta's social media ad business — and how that's driven earnings-per-share growth — has quelled concerns about aggressive AI spending. This time around, the market is looking for Family of Apps revenue to increase 14.8% on annual basis, according to FactSet. Total revenues are expected to be $43.84 alongside EPS of $5.91. Joining Meta on Wednesday night is fellow tech giant Microsoft , which is reporting its fiscal 2025 fourth-quarter results. The most important line item is the growth of the cloud-computing business Azure, and the AI services contributions to that expansion. Last quarter, Azure grew a better-than-expected 35% on a constant-currency basis, with AI being responsible for 16 points of growth. For the June period, the FactSet consensus for Azure is growth of 34.9% (there's no estimate for AI, specifically). Overall, analysts expect Microsoft to report earnings per share of $3.37 on revenue of $73.81 billion. Microsoft's capex commentary for its fiscal 2026 will also be note of note, carrying implications for leading AI chipmaker Nvidia and the likes of industrials such as Eaton, which supplies electrical equipment for data centers. The current consensus is for capex of $73.9 billion in fiscal 2026, according to FactSet. We'll also listen for any updates on the contract renegotiations with frenemy OpenAI, which is seeking greater independence from its early benefactor. Bristol Myers Squibb will report results on Thursday before the open. Sales of Cobenfy, the company's new schizophrenia treatment, will be a key watch item for investors. We're also interested to hear about other potential indications for Cobenfy, such as its use in the treatment of Alzheimer's psychosis, with late-stage trial data expected later this year. The initial response that Bristol Myers is seeing to its recently announced plan to sell blood-thinning medication Eliquis directly to patients through its Eliquis 360 support program will also be something to watch out for during the conference call. Analysts may also ask about Cristian Massacesi joining as its new chief medical officer. The Street is looking for earnings of $1.07 per share on revenue of $11.38 billion. Apple joins the parade of tech earnings after the bell Thursday. After the March quarter saw a "pull-forward" in iPhone sales as consumers rushed to beat fears of tariff-driven price hikes, there's a belief that the final two quarters of Apple's September-ended fiscal year will be softer than before. For the three months ended in June, the FactSet consensus is for iPhone sales of $40 billion. A few more questions: Will Apple's high-margin Services business get back on track after a light miss in the March quarter? Did the estimated $900 million tariff impact for the June quarter materialize, and can management shed any more light on its supply chain and artificial intelligence strategies going forward? There's no question Apple has been a frustrating stock this year, but as long as the iPhone remains the best consumer hardware device on the market, there's time to turn it around. Analysts expect total revenue of $89.33 billion and earnings per share of $1.43. Amazon will also report after the bell on Thursday. Revenue growth and profitability at cloud unit Amazon Web Services remains the key metric for investors to watch. On the retail side, we're also interested in more details on how Amazon is leveraging AI and automation in its warehouses and throughout its massive logistics network. Though the four-day Prime Day event won't be reflected in the reported numbers — given it was in July (third quarter) — we're still interested to hear management's commentary on the event, as it will no doubt play into the guidance the team provides. The combination of Prime Day and the back-to-school season stands to support both consumer demand and ad revenue growth in the third quarter. Analysts expect total revenue of $162.06 billion and earnings per share of $1.32. Linde will be out with results on Friday, before the opening bell. We're simply looking for more of the consistency we've come to know and love from Linde. However, outside of the numbers, it will be interesting to see what management has to say about the various industries the company serves. A commentary on how tariffs are affecting demand from customers will also help better inform our view on various sectors of the economy. Also of interest will be management's view on the recently announced long-term agreements to supply the U.S. space industry. As for earnings, last time around, management baked in the assumption of economic deterioration and recessionary conditions. Given the resiliency we've seen since then and the increased clarity as it relates to tariffs, we'll look for the team to revise their outlook for the remained of the year. Analysts are looking for earnings of $4.03 on revenue of $8.35 billion. Week ahead Monday, July 28 Before the bell earnings: New Gold (NGD), Enterprise Products Partners (EPD), Alerus Financial Corporation (ALRS), Bank of Hawaii (BOH), Alliance Resource Partners (ARLP) After the bell: Celestica (CLS), Rambus (RMBS), Tilray (TLRY), WM (WM), Cadence Design Systems (CDNS), Crane (CR), Whirlpool (WHR), Amkor Technology (AMKR), Brixmor Property Group (BRX), Enterprise Financial Services (EFSC), Universal Health Services (UHS), Brown & Brown (BRO), Veralto (VLTO) Tuesday, July 29 FHFA Home Price Index at 9 a.m. ET Job Openings and Labor Turnover Survey at 10 a.m. ET Before the bell: UnitedHealth (UNH), SoFi (SOFI), PayPal (PYPL), Boeing (BA), United Parcel Service (UPS), Spotify (SPOT), Merck (MRK), Nucor (NUE), AstraZeneca (AZN), JetBlue Airways (JBLU), Procter & Gamble (PG), Carrier Global (CARR), American Tower (AMT), Norfolk Southern (NSC), Polaris (PII), Royal Caribbean Cruises (RCL), Stellantis (STLA) After the bell: Starbucks Corp. (SBUX), Visa (V), Marathon Digital (MARA), Booking (BKNG), Cheesecake Factory (CAKE), Seagate (STX), Teradyne (TER), Penumbra (PEN), PPG Industries (PPG), Republic Services (RSG), Avis Budget (CAR), Caesars Entertainment (CZR) Wednesday, July 30 ADP Employment Survey at 8:15 a.m. ET First look at Q2 U.S. GDP at 8:30 a.m. ET Federal Reserve interest rate decision at 2 p.m. ET Fed Chair Jerome Powell's press conference at 2:30 p.m. ET Before the bell: Altria (MO), Vertiv (VRT), Virtu Financial (VIRT), Kraft Heinz (KHC), Teva Pharmaceutical Industries (TEVA), Generac (GNRC), Etsy (ETSY), GE HealthCare (GEHC), Hershey Company (HSY), Humana (HUM), Harley-Davidson (HOG), VF Corp. (VFC), Vita Coco Company (COCO), GlaxoSmithKline (GSK) After the bell: Meta Platforms. (META), Microsoft (MSFT), Robinhood Markets (HOOD), Applied Digital (APLD), Carvana (CVNA), Lam Research (LRCX), Qualcomm (QCOM), Ford Motor (F), Arm Holdings (ARM), Albemarle (ALB), MGM Resorts International (MGM), Agnico-Eagle Mines (AEM), Sprouts Farmers Market (SFM), Allstate (ALL), Brookfield (BN), Western Digital (WDC), eBay (EBAY) Thursday, July 31 Personal Consumption Expenditures Price Index at 8:30 a.m. ET Initial jobless claims at 8:30 a.m. ET Before the bell: CVS Health (CVS), Roblox (RBLX), Cameco (CCJ), Carpenter Technology (CRS), Norwegian Cruise Line (NCLH), AbbVie (ABBV), Bristol Myers Squibb (BMY) , Howmet Aerospace (HWM), Baxter International (BAX), Builders FirstSource (BLDR), Cigna (CI), Canada Goose (GOOS), Mastercard (MA), PG & E (PCG), Shake Shack (SHAK), SiriusXM (SIRI), Southern Company (SO) After the bell: Apple (AAPL), Amazon (AMZN), MicroStrategy (MSTR), Reddit (RDDT), Coinbase Global (COIN), Riot Platforms (RIOT), Enovix Corporation (ENVX), Roku (ROKU), Bloom Energy (BE), Cloudflare (NET), Cable ONE (CABO), Innodata (INOD), MasTec (MTZ), AXT (AXTI), Beazer Homes USA (BZH), Eldorado Gold (EGO), Edison International (EIX) Friday, August 1 Trump's "reciprocal" tariffs deadline Nonfarm payrolls report at 8:30 a.m. ET Before the bell: Linde (LIN), Exxon Mobil (XOM), Chevron (CVX), Regeneron Pharmaceuticals (REGN), Colgate-Palmolive (CL), CNH Global (CNH), Dominion Energy (D), AES (AES), Cboe Global Markets (CBOE), Fulgent Genetics (FLGT), Fluor (FLR), LyondellBasell Industries (LYB), Ocugen (OCGN), T. Rowe Price (TROW), Ameren (AEE), Ares Management (ARES), Avantor (AVTR) (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Yahoo
an hour ago
- Yahoo
Transcript: Russell Vought on "Face the Nation with Margaret Brennan," July 27, 2025
The following is the transcript of an interview with Russell Vought, director of the White House Office of Management and Budget, that aired on "Face the Nation with Margaret Brennan" on July 27, 2025. MARGARET BRENNAN: We begin today with the director of the White House Office of Management and Budget, Russell Vought, welcome to 'Face The Nation.' DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET RUSSELL VOUGHT: Thanks for having me. MARGARET BRENNAN: There's so much to get to with you. Let's start on what's going on with the Federal Reserve. If you take the president at his word, he does not intend to fire the Federal Reserve Chair, Jerome Powell- though he's still criticizing him. What is the President seeking in a successor when his term ends in May 2026? VOUGHT: Well, I think he's looking for a chairman that's not continually too late to the developments in the economic marketplace. And I think what we've seen with Chairman Powell, he was very late in the Biden administration to raise rates, to articulate the concern with regard to the Biden administration's spending. We all knew on the outside- even Larry Summers knew that we were going to have an issue with regard to inflation. And we saw, you know, recent, historical inflationary levels that we hadn't seen before. And now he is too late to lower inflation rates and so that is the kind of thing that we want to see in the next chairman of the Federal Reserve. And one of the reasons why is-- MARGARET BRENNAN: --More of a focus on inflation? VOUGHT: --want an ability to recognize the developments in the economic marketplace. In this case, we want to be able to see lower rates and to have an ability to get the economy going. And one of the things we saw with Powell is that one of the reasons he was so late was because he didn't understand that inflation is largely a monetary phenomenon. He kept saying that inflation was transitory. He didn't tackle the problem, and now he's, again, too late, and you marry that with fiscal mismanagement at the Fed. It's a huge problem that we're trying to raise the country's awareness level with. MARGARET BRENNAN: But as you know, the Fed is structured in a way where he doesn't have unilateral control. There's a governing board. Others weigh in. You did work on Project 2025, and we went back and looked at what they said in there about the Fed. As people may know, that's a Heritage Foundation product that got a lot of scrutiny during the campaign. the chapter on the Fed called for Congress to overhaul the Fed's focus and powers. Is that what you're looking to do in 2026? VOUGHT: I don't even know what that chapter says. All I know, in terms of the President, the President has run on an agenda. He's been very clear about that. All that we're doing is- in this administration is running on- is implementing his agenda. MARGARET BRENNAN: You don't want to overhaul the Fed? VOUGHT: We want an economic system that works for the American people, that includes the Fed. And the President has been very clear that all he's asking from the Fed is lower interest rates, because he thinks it's important. When you look at across the across the globe, and you have countries lowering rates, and yet we don't see that in this country, given all of the positive economic indicators that we're seeing. And then we have fiscal mismanagement at the Fed with regard to this building renovation that I'm sure you will ask me about. Those are the kinds of things that we want to see from the Fed. This is not part of an existential issue with regard to the Federal Reserve. MARGARET BRENNAN: Well, the Fed is indicating that they are trending towards a rate cut, though probably not as soon as this week. We mentioned those renovations at the top of the program, but I do want to ask about spending, or lack thereof, that the Trump administration is trying to direct. The White House said they will actually release the remaining $5 billion in education, funds that had been withheld from public schools until recently. There were 10 Republican senators very worried about this, and came out and said, your claim that the money goes to radical left wing programs was wrong. What changed your mind? What made you release this money? VOUGHT: Well, we had been going through a programmatic review with these funds. These are programs that, as an administration, we don't support. We've called for the elimination of them in the President's budget for precisely the reasons of which they flow to often left wing organizations. Thankfully, the President came into office, put an executive order that said it can't- these funds can't go to these types of initiatives. I'll just give you one example, English language acquisition was flowing to the New York school public education system to go into illegal immigration advocacy organizations. Preschool development grants doesn't actually go to preschoolers. It goes to the curriculum for putting CRT into the school system for people as young- children as young as four years old. MARGARET BRENNAN: Well, these senators said it goes to adult learners working to gain employment skills and after school programs. VOUGHT: And what we-- MARGARET BRENNAN: So you deemed it is necessary? VOUGHT: We believe that it's important to get the money out right now, but we have taken an extended time frame to be able to make sure it doesn't go to the types of things that we saw under the Biden administration. MARGARET BRENNAN: Because, you know, Senator Lindsey Graham told the Washington Post, the administration is looking at considering clawbacks from the Department of Education. This, you know, rescissions process. Is that the plan? Are you seeking to claw back education funds in a rescissions package? And if so, when are you sending that up? VOUGHT: We may be, we're always looking at potential rescission options. This is an- this is a set of funding that we wanted to make sure it got out. We did our programmatic review. We wanted to make sure it got out before the school year, even though it's multi-year funding. This is not funding that would expire at the end of this year. We are looking to do rescissions package. We're always gauging the extent to which the Congress is willing to participate in that process, and we're- be looking at a lot of different options along those lines, but certainly have nothing to announce here today. But we're thrilled that we had the first rescissions package in decades, and we've got the process moving again. MARGARET BRENNAN: So no rescissions package before September? VOUGHT: Not here to say that. We're looking at all of our options, we will look at it and assess where the Hill is, what are the particular funding opportunities that we have, but nothing that we're going to announce today, MARGARET BRENNAN: Because some of the funds that do expire in September have also been held up on the health front. Senator Katie Britt of Alabama, 13 other Republicans, came out with a letter saying that you've been slow in releasing funds for the National Institute of Health for research into cardiovascular disease, cancer. Are those funds going to be released? VOUGHT: Again, we're going through the same process with the NIH that we did with the education. I mean-- MARGARET BRENNAN: But there's a time cost here. VOUGHT: --$2 million for injecting dogs with cocaine that the NIH spent money on, $75,000 for Harvard to study blowing lizards off of trees with leaf blowers. That's the kind of waste that we've seen at the NIH. And that's not even getting to the extent to which the NIH was weaponized against the American people over the last several years, with regard to funding gain of function research that caused the pandemic. We have a- we have an agency that needs dramatic overhaul. Thankfully, we have a great new head of it, but we're going to have to go line by line to make sure the NIH is funded properly. MARGARET BRENNAN: Are you going to release the cancer funding research? And the cardiovascular disease research funding? VOUGHT: We're going to continue- we're going to continue to go to the same process that we have gone through with regard to the Department of Education, that every one of these agencies-- MARGARET BRENNAN: Before September, that money will be released? VOUGHT: --and we will release that funding when we are done with that review. MARGARET BRENNAN: Because, as you know, there's concern that you're withholding the money, hoping it just won't be spent. I mean, if you look at the White House budget, it does call for a 26% cut to HHS, $18 billion cut to NIH. Is this just a backdoor way to make those cuts happen? VOUGHT: Well, I don't want to speak to any specific program with regard to what we might do with regard to rescissions throughout the end of this fiscal year, but we certainly recognize that we have the ability and the executive tools to fund less than what Congress appropriated, and to use the tools that the Impoundment Control Act, a bill we're not- a law that we're not entirely thrilled with, gives us to- to send up rescissions towards the end of the fiscal year. MARGARET BRENNAN: So just for our viewers, the Impoundment Control Act is the legal mechanism for the President to use to delay or avoid spending funds appropriated by Congress. You seem to want to have an argument, or Democrats think you want to have an argument, over the power of the purse and who holds it. Do you want that to go to the Supreme Court? VOUGHT: Well, look, for 200 years, presidents have the ability to spend less than the congressional appropriations. No one would ever dispute, and our founders didn't dispute that Congress has the ability to set the appropriation ceiling. But 200 years of presidents, up until the 1970s had the ability to spend less, if they could find efficiencies, or if they could find waste that an agency was doing. MARGARET BRENNAN: -- That sounds like a yes?-- VOUGHT:-- We lost that ability in the 1970s. The president ran on restoring that funding authority to the presidency, and it's vital. If you look at when we started to lose control fiscally, it was right around the time of the 1970s. MARGARET BRENNAN: Well, many senators, Republican senators, are very uncomfortable with the tactics that you are using. Senator Murkowski, Senator Collins, that chair of the appropriations committee that is really running this- this funding process. And Senator Collins said you're pushing the limits of what the executive can do without the consent of the- of the legislative branch. You need to work with her to get your budget through. And in fact, you need to also be able to get Democrats on board to get to that 60-vote threshold to pass any kind of government funding to avoid a government shutdown at the end of September. VOUGHT: I have a great relationship with Senator Collins. I appreciate the work she does. She is the chairman of the Appropriations Committee, so obviously we're going to have differences of opinion as to the extent to which these tools should be used. I mean, she had concerns with the rescissions package. The rescissions package was a vote that Congress had to make these cuts permanent-- MARGARET BRENNAN: -- Under- on a party line vote, she says, you want to go do these clawbacks. You do it through regular order, and you can put- you can put rescissions into an appropriations bill-- VOUGHT: --But that was in fact, under regular order. That's the challenge, is the appropriators want to use all the rescissions, they want to put them in their bills, and then they want to spend higher on other programs. We act- we're $37 trillion in debt, Margaret. We actually need to reduce the deficit and have a dollar of cut go to $1 a deficit reduction. That's not what the appropriators want, and it's not news that the Trump administration is going to bring a paradigm shift to this town in terms of the business of spending. MARGARET BRENNAN: You would acknowledge that you just added to the debt and to the deficit with this-- VOUGHT: -- No, I would not acknowledge that. We reduced-- MARGARET BRENNAN: -- The spending and tax bill that just passed? VOUGHT: Correct. MARGARET BRENNAN: Where you lifted the debt ceiling. VOUGHT: The debt ceiling is an extension of the cap on what's needed to pay your previous bills. In terms of the bill itself, it is $400 billion in deficit reduction, $1.5 trillion in mandatory savings reforms, the biggest we've seen in history. MARGARET BRENNAN: Well, I want to make sure I get to the rest of this before I let you go here, because we're running out of time. You said, a few weeks ago, that the appropriations process needs to be less bipartisan. You only have 53 Republicans. You do need Democrats to get on board, here. Is saying something like that intended to undermine negotiations? Do you actually want a government shutdown? VOUGHT: No, of course not. We want to extend the funding at the end of this fiscal year. We understand, from a math perspective, we're going to need Democrats to do that-- MARGARET BRENNAN: Well, what does less bipartisan mean? VOUGHT: Well, Margaret, the whole week, the Democrats were making the argument that if you pass the rescission bill, that you were undermining the bipartisan appropriations process. So, if Brian Schatz and every other appropriator is making that argument for a week-- MARGARET BRENNAN: --The chair of the Senate Appropriations Committee is who said that-- VOUGHT: --you have to be able to respond and say, if you're going to call a rescissions package that you told us during the month of January and February that we should use to do less spending, if you're going to say that is undermining the bipartisan appropriations process, then maybe we should have a conversation about that. That is all it was meant to convey. MARGARET BRENNAN: But, the alternative to this process is another continuing resolution, these stop-gap measures. Are you open to that, because that would lock in Biden-era funding? What is your alternative here? If you want a less bipartisan process, how do you solve for this? Because it sounds like you're laying the predicate for a shutdown. VOUGHT: We are not laying the predicate for a shutdown. We are laying the predicate for the fact that the only thing that has worked in this town- the bipartisan appropriations process is broken. It leads to omnibus bills. We want to prevent an omnibus bill, and all options are on the table to be able to do that. MARGARET BRENNAN: All options are on the table? VOUGHT: We need an appropriations process that functions. We're going to go through the process. We're going to work with them, and we're going to do everything we possibly can to use that process to have cheaper results for the American taxpayer. MARGARET BRENNAN: I'm told we're out of time. Russell Vought, thank you for your time today. While many believe 10,000 steps a day is optimal, new study suggests different DOJ's closed-door meetings with Ghislaine Maxwell fuels pardon speculation It Could Have Been Me: Donna Ongsiako
