US Treasury's Bessent says Federal Reserve needs to be examined as an institution
Bessent, speaking with CNBC, declined to comment on a report that he had advised President Donald Trump not to fire Fed chair Jerome Powell, saying it would be the president's decision.
But he said the institution should be reviewed, citing what he called the Fed's "fear-mongering over tariffs" and noting that there had been little, if any, inflationary effect thus far.
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New Statesman
5 minutes ago
- New Statesman
Trump's gangsterism towards the EU is working
Photo by Thierry Charlier/AFP In 2018, when Donald Trump threatened to impose tariffs on European cars, then-president of the European Commission, Jean-Claude Juncker, responded: 'We can also do stupid.' When Trump then imposed steel and aluminium tariffs, the EU responded by targeting Harley-Davidson motorbikes and bourbon. It wasn't long before the two economic blocs agreed to put further tariffs on hold. It was a different time. Juncker, of course, was cut from a different cloth from today's Commission president Ursula von der Leyen and many of the current European leaders. He had not danced the night away in Berlin in November 1989, as the Wall fell, and was not too inclined to believe in teenage ideas such as the end of history or America as a force for good in the world. He knew, as former French president François Mitterrand once put it, that between America and Europe there is a bloody economic war going on at all times, and there has been one for more than a century. But let us be fair to von der Leyen. There is another difference between today and 2018: the war in Ukraine. For all the pablum about how the war has awakened Europe from its geopolitical slumber, the truth is very different. The war has made Europe entirely dependent on the US — even as it continues to pay for most of the war expenses — because of the belief that without American weaponry Ukraine would sooner or later be defeated. It is a wonderful position for Donald Trump to be in. He can effectively threaten Ukraine with a tragic defeat and the EU with the consequences of such an outcome by simply allowing the withdrawal of all support for Kyiv to hover above the economic negotiations. 'What a nice country Ukraine is,' he says ominously to Europeans, 'it would be terrible if something happened to it.' There are no economic discussions taking place at the moment; rather, it's the logic of military force supplanting every economic discussion. The gangsterism has been effective. Terribly effective in fact as evidenced by the bizarre deal announced by von der Leyen over the weekend: for the privilege of paying tariffs of 15 per cent to export to the American market, the EU will reduce its own tariffs and prepare significant transfers of funds to the US energy and defense industries, themselves an informal part of the American state. I have to confess I have never seen a trade deal quite like this one where European concessions were seemingly exchanged for… more European concessions. It's a catastrophic outcome for a series of reasons. First, more than any other crisis in my lifetime, the deal undermines the very raison d'etre for the European Union. If the EU is after all too weak, too divided, too timid to defend European interests on the global stage, what exactly is it for? The individual states can surely be weak on their own. Second, while European leaders have often expressed their distaste for the kind of politics Donald Trump represents, they are also the best possible argument for Trump: after all, if he can extract significant tribute from wealthy European societies, in a way his predecessors could not, why should Americans vote for anyone else? And in fact, after the deal was announced, social media was flooded by Maga accounts celebrating a victory, even turning it into a battle of the sexes, with von der Leyen coming out defeated and humiliated. Good job, everyone in the Berlaymont, you made us proud. Subscribe to The New Statesman today from only £8.99 per month Subscribe Third, the deal is a disaster for the European economy. We saw the impact the day after the announcement: investment banks are revising their growth forecasts for Europe and the euro fell steeply against the dollar. This is particularly hard to take because it reverses very positive dynamics after Trump returned to the White House and global investors started to look at Europe as a more predictable place to park their money. Why should they do that now that exports to the US market may fall by about 30 per cent as a result of the tariffs and investment in European technology looks doomed with the necessary funds going to buy American weapons and natural gas instead of European weapons and wind turbines. Note how the deal determines that Europe continues to subsidise the military industrial complex in North Virginia instead of investing in its own military technology. Such investment would help Ukraine survive, but it would also reduce Europe's vulnerability and create a level playing field for transatlantic relations. That's the last thing Trump wants. This deal is disastrous on its own terms and doubly disastrous for creating the conditions for many similar deals in the future. The irony is that Europeans spend an enormous amount of time discussing among themselves why their economies are falling behind the boisterous US economy. One American company, Nvidia, may soon be worth more than the 50 largest European companies. What explains this? Might it be an excess of regulation, as Mario Draghi likes to say? A taste for la dolce vita? Too much wine? Too much espresso? Perhaps Europeans lack the entrepreneurial drive of Americans, the typical justification of every colonised mind and yet not uncommon in parts of Europe. What a mystery. Unless, of course, it has something to do with Europe's extreme vulnerability and America's willingness to use its unmatched military power to shape economic outcomes. Yes, it might be that. [Further reading: The plot against Zohran Mamdani] Related
Reuters
5 minutes ago
- Reuters
SNAPSHOT S&P 500, Nasdaq open at record highs with earnings, Fed meeting in focus
July 29 (Reuters) - The S&P 500 and Nasdaq opened at fresh record highs on Tuesday, as investors assessed a slew of earnings reports from major U.S. companies and looked ahead to the Federal Reserve's upcoming two-day policy meeting. The Dow Jones Industrial Average (.DJI), opens new tab down 3.8 points, or 0.01%, at the open to 44833.74. The S&P 500 (.SPX), opens new tab rose 15.8 points, or 0.25%, at the open to 6405.62, while the Nasdaq Composite (.IXIC), opens new tab rose 108.1 points, or 0.51%, to 21286.725 at the opening bell.
Reuters
5 minutes ago
- Reuters
World Court climate opinion turns up the legal heat on governments
THE HAGUE, July 29 (Reuters) - A landmark opinion delivered by the United Nations' highest court last week that governments must protect the climate is already being cited in courtrooms, as lawyers say it strengthens the legal arguments in suits against countries and companies. The International Court of Justice, also known as the World Court, last Wednesday laid out the duty of states to limit harm from greenhouse gases and to regulate private industry. It said failure to reduce emissions could be an internationally wrongful act and, found that treaties such as the 2015 Paris Agreement on climate change should be considered legally binding. While not specifically naming the United States, the court said countries that were not part of the United Nations climate treaty must still protect the climate as a matter of human rights law and customary international law. Only a day after the World Court opinion, lawyers for a windfarm distributed copies of it to the seven judges of the Irish Supreme Court on the final day of hearings on a case about whether planning permits for turbines should prioritise climate concerns over rural vistas. It is not clear when the Irish court will deliver its ruling. Lawyer Alan Roberts, for Coolglass Wind Farm, said the opinion would boost his client's argument that Ireland's climate obligations must be taken into account when considering domestic law. Although also not legally binding, the ICJ's opinion has legal weight, provided that national courts accept as a legal benchmark for their deliberations, which U.N. states typically do. The United States, where nearly two-thirds of all climate litigation cases are ongoing, is increasingly likely to be an exception as it has always been ambivalent about the significance of ICJ opinions for domestic courts. Compounding that, under U.S. President Donald Trump, the country has been tearing up all climate regulations. Not all U.S. states are sceptical about climate change, however, and lawyers said they still expected the opinion to be cited in U.S. cases. In Europe, where lawyers say the ICJ opinion is likely to have its greatest impact on upcoming climate cases, recent instances of governments respecting the court's rulings include Britain's decision late last year to reopen negotiations to return the Chagos Islands, opens new tab in the Indian Ocean to Mauritius. That followed a 2019 ICJ opinion that London should cede control. Turning to environmental cases, in a Dutch civil case due to be heard in October - Bonaire versus The Netherlands - Greenpeace Netherlands and eight people from the Dutch territory of Bonaire, a low-lying island in the Caribbean, will argue that the Netherlands' climate plan is insufficient to protect the island against rising sea levels. The World Court said countries' national climate plans must be "stringent" and aligned to the Paris Agreement aim to limit warming to 1.5 Celsius (2.7 Fahrenheit) above the pre-industrial average. The court also said countries must take responsibility for a country's fair share of historical emissions. In hearings last December at the ICJ that led to last week's opinion, many wealthy countries, including Norway, Saudi Arabia, and The United States argued national climate plans were non-binding. "The court has said (...) that's not correct," said Lucy Maxwell, co-director of the Climate Litigation Network. In the Bonaire case, the Dutch government is arguing that having a climate plan is sufficient. The plaintiffs argue it would not meet the 1.5C threshold and the Netherlands must do its fair share to keep global warming below that, Louise Fournier, legal counsel for Greenpeace International, said. "This is definitely going to help there," Fournier said of the ICJ opinion in the Bonaire case. The ICJ opinion said climate change was an "urgent and existential threat," citing decades of peer-reviewed research, even as scepticism has mounted in some quarters, led by the United States. A document seen by Reuters shows the U.S. Environmental Protection Agency may question the research behind mainstream climate science and is poised to revoke its scientific determination that greenhouse gas emissions endanger public health. Jonathan Martel of the U.S. law firm Arnold and Porter represents industry clients on environmental issues. He raised the prospect of possible legal challenges to the EPA's regulatory changes given that an international court has treated the science of climate change as unequivocal and settled. "This might create a further obstacle for those who would advocate against regulatory action based on scientific uncertainty regarding the existence of climate change caused by anthropogenic emissions of greenhouse gases," he said. The U.S. EPA changes would affect the agency's regulations on tailpipe emissions from vehicles that run on fossil fuel. Legal teams are reviewing the impact of the ruling on litigation against the companies that produce fossil fuel, as well as on the governments that regulate them. The World Court said that states could be held liable for the activities of private actors under their control, specifically mentioning the licensing and subsidising of fossil fuel production. Notre Affaire à Tous, a French NGO whose case against TotalEnergies is due to be heard in January 2026, expected the advisory opinion to strengthen its arguments. "This opinion will strongly reinforce our case because it mentions (...) that providing new licences to new oil and gas projects may be a constitutional and international wrongful act," said Paul Mougeolle, senior counsel for Notre Affaire à Tous. TotalEnergies did not respond to a request for comment.
