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Yahoo
23 minutes ago
- Yahoo
Dissenting Fed officials tie votes to labor market concerns
By Michael S. Derby (Reuters) -The two Federal Reserve governors who favored an interest rate cut at the U.S. central bank's policy meeting this week said on Friday they did so largely due to rising concerns about the job market, amid expectations that any price increases related to trade tariffs will not lead to lasting price pressures. "With economic growth slowing this year and signs of a less dynamic labor market, I saw it as appropriate to begin gradually moving our moderately restrictive policy stance toward a neutral setting," Vice Chair for Supervision Michelle Bowman said in a statement. "In my view, this action would have proactively hedged against a further weakening in the economy and the risk of damage to the labor market," she said. Governor Christopher Waller said in a separate statement that "with underlying inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate." Waller said the job market is nearing stall speed and the Fed's rate target should be closer to its neutral level. Waller said of the Fed's broader approach to monetary policy right now that "I believe that the wait and see approach is overly cautious, and, in my opinion, does not properly balance the risks to the outlook and could lead to policy falling behind the curve." The policymakers weighed in after casting dissenting votes against the Federal Open Market Committee's decision on Wednesday to hold its benchmark interest rate in the 4.25%-4.50% range. The dissents marked the first time that many governors had opposed the Fed's consensus view since late 1993. Comments made by Waller and Bowman going into the meeting had led many observers to expect their dissents. Waller has been most explicit in arguing for lower rates, saying the risks are rising for the job market while tariff-related inflation increases are likely to be a one-time shift the Fed could ignore. Bowman also expressed skepticism that tariffs would cause sustained inflation problems. The dissents also garnered interest because of the broader political currents buffeting the Fed. President Donald Trump has been pushing aggressively for rate cuts, excoriating Fed Chair Jerome Powell for failing to heed the White House's demands. Waller, who noted last month that his view was not "political" is widely considered to be in the running to succeed Powell when his term expires next May. Bowman, who was recently elevated to the Fed's bank overseer role by Trump, had previously been on the more hawkish end of the monetary policy spectrum, having dissented last fall in favor of a smaller rate cut than what the Fed delivered. Nodding toward the potential ambitions of the dissenters, Michael Feroli, chief U.S. economist at JP Morgan, described their votes on Wednesday as "two job applications attached" to the FOMC statement, even as he noted, "we don't read too much into these dissents for the future direction of policy." 'GOOD MEETING' As for the rest of the Fed's policymakers, they voted in favor of holding rates steady because even as some risks to the outlook are emerging, they are still wary of what Trump's tariffs will do to price pressures. "The economy is in a solid position" and "for the time being, we're well positioned to learn more about the likely course of the economy and the evolving balance of risks before adjusting our policy stance," Powell said at a press conference on Wednesday after the end of the Fed's two-day policy meeting. Powell appeared to see no downsides to the dissents. He described the FOMC gathering as a "good meeting" and added, "what you want from everybody, and also from a dissenter, is a clear explanation of what your thinking is and what are the arguments you're making ... We had that today." Powell did not indicate whether the dissenters had moved the consensus. "We haven't made any decisions about September. We'll be monitoring all the incoming data and asking ourselves whether the federal funds rate is in the right place." The Fed's next policy meeting is scheduled for September 16-17.
Yahoo
23 minutes ago
- Yahoo
Trump calls on Federal Reserve board to wrest full control of central bank from Fed Chair Powell
WASHINGTON (AP) — President Donald Trump on Friday called for the Federal Reserve's board of governors to usurp the power of Fed Chair Jerome Powell, criticizing the head of the U.S. central bank for not cutting short-term interest rates. Posting on his Truth Social platform, Trump called Powell 'stubborn." The Fed chair has been subjected to vicious verbal attacks by the Republican president over several months. The Fed has the responsibility of stabilizing prices and maximizing employment. Powell has held its benchmark rate for overnight loans constant this year, saying that Fed officials needed to see what impact Trump's massive tariffs had on inflation. If Powell doesn't 'substantially' lower rates, Trump said, 'THE BOARD SHOULD ASSUME CONTROL, AND DO WHAT EVERYONE KNOWS HAS TO BE DONE!' Trump sees the rate cuts as leading to stronger growth and lower debt servicing costs for the federal government and homebuyers. The president argues there is virtually no inflation, even though the Fed's preferred measure is running at an annual rate of 2.6%, slightly higher than the Fed's 2% target. Trump has called for slashing the Fed's benchmark rate by 3 percentage points, bringing it down dramatically from its current average of 4.33%. The risk is that a rate cut that large could cause more money to come into the economy than can be absorbed, possibly causing inflation to accelerate. The Supreme Court suggested in a May ruling that Trump could not remove Powell for policy disagreements. This led the White House to investigate whether the Fed chair could be fired for cause because of the cost overruns in its $2.5 billion renovation projects. Powell's term as chair ends in May 2026, at which point Trump can put his Senate-confirmed pick in the seat. ___ Follow the AP's coverage of the Federal Reserve System at Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Newsweek
25 minutes ago
- Newsweek
Donald Trump's Disapproval Rating Jumps: Honeymoon 'Has Gone'
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. President Donald Trump's second term "honeymoon" is over, a YouGov analyst has said in the wake of the latest polling, which revealed his disapproval rating has increased. According to the YouGov polling forBritish paper The Times, the proportion of people who disapprove of Trump's job performance has increased from 52 percent in April to 57 percent in July. Reacting to this polling, analyst for YouGov Mark Blumenthal said: "The honeymoon at the beginning has gone." Why It Matters In the first six months of his presidency, Trump's popularity as fluctuated. Voters have in particular raised concerns about the administration's handling of the late sex offender Jeffrey Epstein's case, as well as Trump's tariffs policies and his impact on the economy more broadly. President Donald Trump listens during an event to sign an executive order restarting the Presidential Fitness Test in public schools, Thursday, July 31, 2025, in the Roosevelt Room of the White House in Washington. President Donald Trump listens during an event to sign an executive order restarting the Presidential Fitness Test in public schools, Thursday, July 31, 2025, in the Roosevelt Room of the White House in Washington. AP Photo/Jacquelyn Martin Maintaining broad support will be of key importance when voters head to the midterm elections in November 2026. What To Know The YouGov survey of 1,470 adults was conducted between July 18 and July 21. The margin of error was not provided. While 57 percent disapproved of Trump's performance, 39 percent approved. In April, the proportion of people who approved was 42 percent. It also found that 37 percent graded Trump's second term as excellent or good while 59 percent said it had been fair or poor so far. In addition, 63 percent of Americans said the U.S. was "out of control" and 24 percent disagreed with that premise. And 36 percent said Trump hasn't achieved anything this term, while 13 percent listed "arresting and deporting illegal immigrants" as his best achievement so far and 11 percent said it was "reducing border crossings." Polling by Civiqs released this week showed Trump's approval rating was negative in 13 of the 31 states he won in the November 2024 presidential election, Another survey conducted by Quantus Insights from July 21 to July 23 among 1,123 registered voters showed his approval rating stood at 47 percent, while 50 percent disapproved. However, other polls are more positive. One poll showed Trump gaining more traction with Hispanic voters, a key demographic that traditionally supports Democratic candidates. Another in July had the proportion of college-educated voters who approve of the president's job performance increase from June. What People Are Saying Speaking to Newsweek, Mark Shanahan who teaches American politics at the University of Surrey in the U.K, said: "Trump's second term has been less of a honeymoon, but more of a divorce from half the country: one where he's got to keep the house, the kids and just about all of the assets. From day one of his rule by Executive Order he has never sought to bring the USA together and, indeed, has exploited differences to highlight how he's delivering on his campaign commitments, not least through DOGE [Department of Government Efficiency], through his clampdown on immigration and through his America First foreign policy." "Public services are already beginning to creak thanks to the actions of Musk and his cohort, and tariffs are driving up prices at home, while the economic benefits of the One Big Beautiful act have yet to be felt. And around all this, the whiff of Epstein is tainting the president's achievements." Blumenthal said: "The honeymoon at the beginning has gone: inflation and jobs are still the leading issues and there is not a perception of anything improving. The survey suggests that Trump's two flagship economic initiatives—his tariffs and the One Big Beautiful Bill — are not perceived as helping the economy." What Happens Next Trump's approval rating will continue to fluctuate throughout his term in office as he implements his policy agenda. Whether it falls enough to impact the Republican Party in the November 2026 midterms remains to be seen.
