Financial Repression Won't Make Interest Rates Lower
The federal government, financial markets and most Americans are all in a state of denial about interest rates. Whenever someone goes on business TV, gets a mortgage or makes a long-term debt projection, I usually hear some variation of the phrase, 'when rates go back down.'
I am sorry to be the bearer of bad tidings, but rates are not going back down, especially to the levels of the 2010s. And almost any attempt to try to force them down — what we economists call financial repression — will only bring pain.
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San Francisco Chronicle
39 minutes ago
- San Francisco Chronicle
Supreme Court allows DOGE team to access Social Security systems with data on millions of Americans
WASHINGTON (AP) — The Supreme Court handed the Trump administration two victories Friday in cases involving the Department of Government Efficiency, including giving it access to Social Security systems containing personal data on millions of Americans. The justices also separately reined in orders seeking transparency at DOGE, the team once led by billionaire Elon Musk. The court's conservative majority sided with the Trump administration in the first Supreme Court appeals involving DOGE. The three liberal justices dissented in both cases. The DOGE victories come amid a messy breakup between the president and the world's richest man that started shortly after Musk's departure from the White House and has included threats to cut government contracts and a call for the president to be impeached. The future of DOGE's work isn't clear without Musk at the helm, but both men have previously said that it will continue its efforts. In one case, the high court halted an order from a judge in Maryland that has restricted the team's access to the Social Security Administration under federal privacy laws. 'We conclude that, under the present circumstances, SSA may proceed to afford members of the SSA DOGE Team access to the agency records in question in order for those members to do their work,' the court said in an unsigned order. Conservative lower-court judges have said there's no evidence at this point of DOGE mishandling personal information. The agency holds sensitive data on nearly everyone in the country, including school records, salary details and medical information. Justice Ketanji Brown Jackson said the court's action creates 'grave privacy risks' for millions of Americans by giving 'unfettered data access to DOGE regardless — despite its failure to show any need or any interest in complying with existing privacy safeguards, and all before we know for sure whether federal law countenances such access.' Justice Sonia Sotomayor joined Jackson's opinion and Justice Elena Kagan said she also would have ruled against the administration. The Trump administration says DOGE needs the access to carry out its mission of targeting waste in the federal government. Musk had been focused on Social Security as an alleged hotbed of fraud. The entrepreneur has described it as a ' Ponzi scheme ' and insisted that reducing waste in the program is an important way to cut government spending. But U.S. District Judge Ellen Hollander in Maryland found that DOGE's efforts at Social Security amounted to a 'fishing expedition' based on 'little more than suspicion' of fraud, and allowing unfettered access puts Americans' private information at risk. Her ruling did allow access to anonymous data for staffers who have undergone training and background checks, or wider access for those who have detailed a specific need. The Trump administration has said DOGE can't work effectively with those restrictions. Solicitor General D. John Sauer also argued that the ruling is an example of federal judges overstepping their authority and trying to micromanage executive branch agencies. The plaintiffs say it's a narrow order that's urgently needed to protect personal information. An appeals court previously refused to immediately to lift the block on DOGE access, though it split along ideological lines. Conservative judges in the minority said there's no evidence that the team has done any 'targeted snooping' or exposed personal information. The lawsuit was originally filed by a group of labor unions and retirees represented by the group Democracy Forward. It's one of more than two dozen lawsuits filed over DOGE's work, which has included deep cuts at federal agencies and large-scale layoffs. The nation's court system has been ground zero for pushback to President Donald Trump's sweeping conservative agenda, with about 200 lawsuits filed challenging policies on everything from immigration to education to mass layoffs of federal workers. In the other DOGE order handed down Friday, the justices extended a pause on orders that would require the team to publicly disclose information about its operations, as part of a lawsuit filed by a government watchdog group. Citizens for Responsibility and Ethics in Washington argues that DOGE, which has been central to Trump's push to remake the government, is a federal agency and must be subject to the Freedom of Information Act. But the Trump administration says DOGE is just a presidential advisory body aimed at government cost-cutting, which would make it exempt from requests for documents under FOIA. The justices did not decide that issue Friday, but the conservative majority held that U.S. District Judge Christopher Cooper ruled too broadly in ordering documents be turned over to CREW.
New Straits Times
44 minutes ago
- New Straits Times
US Supreme Court allows DOGE broad access to Social Security data
WASHINGTON: The US Supreme Court on Friday permitted the Department of Government Efficiency, a key player in President Donald Trump's drive to slash the federal workforce, broad access to personal information on millions of Americans in Social Security Administration data systems while a legal challenge plays out. At the request of the Justice Department, the justices put on hold Maryland-based US District Judge Ellen Hollander's order that had largely blocked DOGE's access to "personally identifiable information" in data such as medical and financial records while litigation proceeds in a lower court. Hollander found that allowing DOGE unfettered access likely would violate a federal privacy law. The court's brief, unsigned order did not provide a rationale for siding with DOGE. The court has a 6-3 conservative majority. Its three liberal justices dissented from the order. Liberal Justice Ketanji Brown Jackson, in a dissent that was joined by fellow liberal Justice Sonia Sotomayor, criticised the court's majority for granting DOGE "unfettered data access" despite the administration's "failure to show any need or any interest in complying with existing privacy safeguards." In a separate order on Friday, the Supreme Court extended its block on judicial orders requiring DOGE to turn over records to a government watchdog group that sought details on the entity established by Trump and Musk. DOGE swept through federal agencies as part of the Republican president's effort, spearheaded by billionaire Elon Musk, to eliminate federal jobs, downsize and reshape the US government and root out what they see as wasteful spending. Musk formally ended his government work on May 30. Two labour unions and an advocacy group sued to stop DOGE from accessing sensitive data at the Social Security Administration, or SSA, including Social Security numbers, bank account data, tax information, earnings history and immigration records. The agency is a major provider of government benefits, sending cheques each month to more than 70 million recipients including retirees and disabled Americans. Democracy Forward, a liberal legal group that represented the plaintiffs, said Friday's order would put millions of Americans' data at risk. "Elon Musk may have left Washington, D.C., but his impact continues to harm millions of people," the group said in a statement. "We will continue to use every legal tool at our disposal to keep unelected bureaucrats from misusing the public's most sensitive data as this case moves forward." In their lawsuit, the plaintiffs argued that the Social Security Administration had been "ransacked" and that DOGE members had been installed without proper vetting or training and demanded access to some of the agency's most sensitive data systems. Hollander in an April 17 ruling found that DOGE had failed to explain why its stated mission required "unprecedented, unfettered access to virtually SSA's entire data systems." "For some 90 years, SSA has been guided by the foundational principle of an expectation of privacy with respect to its records," Hollander wrote. "This case exposes a wide fissure in the foundation." Hollander issued a preliminary injunction that prohibited DOGE staffers and anyone working with them from accessing data containing personal information, with only narrow exceptions. The judge's ruling did allow DOGE affiliates to access data that had been stripped of private information as long as those seeking access had gone through the proper training and passed background checks. Hollander also ordered DOGE affiliates to "disgorge and delete" any personal information already in their possession. The Richmond, Virginia-based 4th US Circuit Court of Appeals in a 9-6 vote declined on April 30 to pause Hollander's block on DOGE's unlimited access to Social Security Administration records. Justice Department lawyers in their Supreme Court filing characterised Hollander's order as judicial overreach. "The district court is forcing the executive branch to stop employees charged with modernising government information systems from accessing the data in those systems because, in the court's judgment, those employees do not 'need' such access," they wrote. The six dissenting judges wrote that the case should have been treated the same as one in which a 4th Circuit panel ruled 2-1 to allow DOGE to access data at the US Treasury and Education Departments and the Office of Personnel Management. In a concurring opinion, seven judges who ruled against DOGE wrote that the case involving Social Security data was "substantially stronger" with "vastly greater stakes," citing "detailed and profoundly sensitive Social Security records," such as family court and school records of children, mental health treatment records and credit card information.
Miami Herald
an hour ago
- Miami Herald
Jobs report shifts Fed interest rate forecasts
Will they or won't they? With the relatively bland U.S. labor numbers for May bumping against randy trade deals and thirsty tariff tiffs, there's leverage for Federal Reserve Board Chair Jerome Powell to re-examine the expected three 25-basis point rate cuts later this year. The Department of Labor reported June 6 that hiring remained stable in May with employers adding 139,000 jobs, gains that were slightly higher than expected but down from April. The unemployment rate stayed the same at 4.2%, as expected by most economists. Leisure and hospitality plus healthcare sectors reported the highest numbers of jobs with the DOGE-ed federal workforce among the lowest. But the manufacturing and retail sectors also shed jobs, which coupled with the federal losses, display an irrefutable shock from the Trump administration's trade wars churning the global economy. Bloomberg/Getty Images President Trump, just days before the jobs report, blasted the central bank chairman as "unbelievable" and a "disaster" on Truth Social for Powell's delay in lowering interest rates, a move Trump maintains is choking economic growth. Trump's latest angry tirade against Powell was sparked after the payroll firm ADP reported private-sector firms added just 37,000 jobs in May, the lowest total in more than two years. An irked Trump demanded 'Too Late' "Powell must now LOWER THE RATE." Related: Bank of America predicts major housing market changes are coming soon Minutes from a meeting of the Federal Reserve Bank leaders, which was held in early May and released on May 29 show the central bank voted to undertake open market operations "as necessary" to maintain the federal funds rate in a target range of 4.2% to 4.50%. In a related action, the Board of Governors of the Federal Reserve System voted unanimously in early May to approve the establishment of the primary credit rate at the existing level of 4.5 percent – which means interest rates for lenders, consumers and the rest of Americans won't be budging in the near term. This added fuel to Trump's increasing vitriolic displays against Powell (a mere harbinger of what the president started throwing down against former First Buddy and Tesla (TSLA) CEO Elon Musk on June 5.) Market participants remain downbeat about interest rate cut chances despite President Trump's demands. The CME's highly-watched FedWatch tool showed a decline in odds of an interest rate cut this summer. Related: Fannie Mae predicts major mortgage rate changes are coming soon The chances the Fed Funds Rate will be in a 4% to 4.25% range in July fell to 16.5% on Friday, June 6, from 30.4% on Thursday, June 5. The odds were nearly 57% one month ago. The Street's Chris Versace reports the market will need to reconsider the three 25-basis point rate cuts it expects per the CME Fed Watch Tool. "With Atlanta Fed President Raphael Bostic signaling ahead of this data that he sees room for just one rate cut, the growing likelihood is more Fed heads will fall into that camp based on the aggregate data published this week." Verace says. " We also have to wonder if Bostic's comment helps lay the groundwork for the Fed's upcoming set of economic projections that it will publish alongside its next policy decision on June 18.'' Thus, the odds of the Fed indicating just one rate cut in the second half of 2025 will increase if next week's May CPI and PPI data support the "May inflation data we've seen thus far and there is no meaningful progress on trade deals,'' Verace says. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
