Trump's feud with central bank continues over interest rates
Mr Trump has repeatedly called on the Fed to reduce rates immediately, claiming its chairman Jerome Powell is bad for the economy.
Republicans are now questioning Mr Powell's handling of the renovation of Fed buildings, which have gone over budget by millions of dollars.
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The Guardian
10 minutes ago
- The Guardian
US judge blocks Trump officials from diverting disaster prevention grants
A federal judge blocked the Trump administration on Tuesday from diverting funds from a multibillion-dollar grant program designed to protect communities against natural disasters. US district judge Richard Stearns in Boston issued a preliminary injunction preventing the government from spending money allocated to the Building Resilient Infrastructure and Communities (Bric) program for other purposes. Twenty mostly Democratic-led states sued the administration last month, saying the Federal Emergency Management Agency (Fema) lacked power to cancel the Bric program without congressional approval. Fema is part of the Department of Homeland Security (DHS). Neither agency immediately responded to requests for comment. Created in 2018 during Donald Trump's first term, the Bric program helps state and local governments protect major infrastructure such as roads and bridges before the occurrence of floods, hurricanes and other disasters. According to the lawsuit, Fema approved about $4.5bn in grants for nearly 2,000 projects, primarily in coastal states, over the last four years. But the agency announced in April it would end the program, calling it wasteful, ineffective and politicized. Stearns said that while Fema does not appear to have since canceled grants, states should not have to wait to sue until after they lose funding, while the cancellation of new grants suggested Fema considered an eventual shutdown a fait accompli. He also said the states have shown a realistic chance of irreparable harm if the Bric program ended. 'There is an inherent public interest in ensuring that the government follows the law, and the potential hardship accruing to the states from the funds being repurposed is great,' the judge wrote. 'The Bric program is designed to protect against natural disasters and save lives,' Stearns added. 'The potential hardship to the government, in contrast, is minimal.' Led by Massachusetts and Washington, the 20 states that sued also include Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont and Wisconsin. The offices of Massachusetts' and Washington's attorneys general had no immediate comment.
Daily Mail
12 minutes ago
- Daily Mail
Trump threatened with THIRD impeachment by widely mocked liberal as his colleagues roll their eyes
Texas Democrat Rep. Al Green has, once again, promised to impeach President Donald Trump, likely making him the most-impeach happy U.S. lawmaker to ever live. The 77-year-old Green has formally tried to impeach Trump at least five times from 2017 until now, and he said he's planning on doing it again, vowing a sixth attempt on Monday. There are no comparisons in modern U.S. history, as no lawmaker has filed so many impeachment articles against any individual president. Trump has been twice impeached by the U.S. House but was acquitted by the U.S. Senate in both instances. 'There are no circumstances that will prevent me from continuing to challenge the bigotry emanating from the presidency,' Green said at an event in Illinois. 'I will not stop. And I promise you, this President, he's going to be brought down.' 'He has to be brought down,' the veteran lawmaker continued. 'I'm talking about politically, we will bring him down. He will be impeached again.' The Democrat's announcement indicates that once Congress returns from the August recess that he may introduce a formal resolution to impeach Trump. But without control of the lower chamber, the Democrat's impeachment pursuit won't have legs. If Green makes good on his pledge, it would be the third time he's moved to impeach Trump this year. These are in addition to his three previously failed attempts to impeach the Republican during his first term in 2017, 2018 and 2019. Green filed articles in May citing Trump as a threat to democracy, and in June, he filed articles against the president for bombing nuclear sites in Iran. Few of his colleagues joined his bandwagon to nowhere. The effort over Iran outraged many Democrats, with one privately venting to Axios that the effort was 'a completely unserious and selfish move.' Even veteran party bosses like Minority Leader Hakeem Jeffries and former Speaker Nancy Pelosi voted against the Iran impeachment. Every impeachment effort that Green has put forward to remove Trump has been voted down by Democrats. A spokesperson for House Democratic Leader Hakeem Jeffries did not immediately respond to the Daily Mail's questions about Green's latest bid to remove Trump. Green has served a deep blue portion of Houston for 20 years, but that district is threatened now that Republican legislators in Texas are remaking the congressional boundaries in the state ahead of schedule. To stop the Texas legislator from redistricting, Democrats in the statehouse fled to liberal strongholds across the country, primarily to Illinois, where a defiant Green gave a speech Monday promising to try and oust Trump again. There have been certain lawmakers who have featured prominently as antagonists to presidents, like how Nancy Pelosi and Sen. Adam Schiff had big roles during more serious movement to remove Trump during his first term. But Green stands alone in the number of formal attempts he has put forward to impeach Trump. In fact, Green's fourth formally introduced article of impeachment hasn't even been taken up. Green earned additional notoriety earlier this year when he heckled and interrupted the president during his address to Congress. During Trump's early March speech, Green stood up and yelled at the president while waving his cane in the air. The elderly lawmaker told the president he had no 'mandate' and was quickly booed by Republicans before House Speaker Mike Johnson instructed the Sergeant-at-Arms to remove the unruly Democrat. The president has taken notice of his Democratic detractor. 'Nobody takes him seriously,' Trump said of Green to Fox News Digital shortly after the interrupted speech. 'He is an embarrassment to Congress but a much bigger embarrassment to the Democrats.' The president said Green 'should be forced to pass an IQ test because he is a low IQ individual, and we don't need low IQ individuals in Congress.' In the interview, Trump called on Green to be censured, and he ultimately was, with some Democrats siding with Republicans to shame the viciously anti-Trump lawmaker. The rare and distinctly lamentable honor seemingly has not thrown Green off the scent for Trump's removal, however.
Reuters
12 minutes ago
- Reuters
Trading Day: Stagflation-ISM
ORLANDO, Florida, Aug 5 (Reuters) - Wall Street bucked the positive global equity trend and closed mostly lower on Tuesday, as U.S. service sector data rekindled stagflation fears and shined a light on the difficult position the Federal Reserve may find itself in next month. More on that below. In my column today I look at the tumult of the last few days that has seen the worlds of U.S. politics, policy, and company earnings collide, exposing the big divergences that run through the country's equity and bond markets. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Stagflation-ISM The stagflation red flags raised by U.S. service sector activity figures on Tuesday are a reminder that the world's largest economy and most important central bank face significant challenges in the months ahead. Investors took their cue more from the bubbling price pressures in the ISM services report than the signs of softening activity. Treasury yields crept up and rate cut expectations were trimmed as a result. Still, it's a curious one. Wall Street's slump on Friday went hand in glove with plunging yields and a dramatic surge in rate cut bets. Today, a hawkish tilt in the bond and rates futures markets was accompanied by a broad-based equity selloff. There are other factors at play, not least the barrage of Q2 earnings, tariff headlines, and a renewed spike in policy uncertainty. But these moves are a reminder that there can be good and bad reasons driving yields up or down, and that the correlation with stocks can flip from one day to the next. The ISM report showed service sector activity in June flatlined while the prices paid index rose to its highest in nearly three years. Tariffs, inflation pressures, growth fears are all in the mix. Contrast this with China's services activity data released on Tuesday, which showed the fastest pace of expansion in July in 14 months. U.S. corporate earnings have generally been strong. Of the 330 companies in the S&P 500 that had reported through last Friday, 80.6% reported consensus-beating profits, compared with the long-term average of 67.1%, according to LSEG data. But Caterpillar warned on Tuesday that tariffs pose significant challenges and could cost the firm up to $1.5 billion this year. Meanwhile, U.S. President Donald Trump told CNBC on Tuesday that he will not nominate Treasury Secretary Scott Bessent for a position on the Fed's Board of Governors, thus ruling him out as a candidate for Fed chair. Trump said he will announce Governor Adriana Kugler's replacement "very shortly." Trump also said the U.S. is "very close" to a trade deal with China and that he would meet his Chinese counterpart Xi Jinping before the end of the year if an agreement is struck. Looking ahead to Wednesday, there are two highlights in the Asian calendar for investors to home in on - the latest Chinese trade figures, and an interest rate decision from the Reserve Bank of India. The RBI is expected to keep its benchmark repo rate on hold at 5.50%. But in light of the steep tariffs recently imposed on Indian exports by the U.S., traders are putting a near one-in-six chance of a rate cut. Likely RBI intervention on Tuesday kept the rupee from hitting new lows through 88.00 per dollar. China's trade figures, meanwhile, will be closely watched after official U.S. data on Tuesday showed America's trade deficit with its Asian rival shrank in June to its lowest in more than 21 years. In light of the contrasting PMI figures on Tuesday, this will be worth keeping an eye on. Navigating US markets' split personalities During an extraordinary few days when the worlds of U.S. politics, policy, economics and company earnings collided, the divergences that run through the country's equity and bond markets have come into sharp relief. For the bond market, the split separates short-dated Treasuries that price off the Fed's policy rate and longer maturities that are more sensitive to U.S. debt and deficit concerns. For the benchmark S&P 500, that line is between the 'Magnificent Seven', along with a few other tech and artificial intelligence-focused megacaps, and everyone else. These types of divides have always existed to some extent, but they have become more apparent this year given the historic concentration on Wall Street and rapid deterioration in the U.S. fiscal outlook. The dramatic moves in U.S. assets over the last few days serve as a microcosm of these deeper divergences. The split in the bond market burst open on Friday. Triggered by surprisingly weak jobs figures and Trump's shock decision to fire a senior official in the agency responsible for collecting the data, the two-year Treasury yield plunged 25 basis points and the 2s/30s yield curve steepened by 20 basis points. These were the biggest moves in one year and two and a half years, respectively. The slump in yields, especially at the short end of the curve, indicates that investors' supposed concerns about fiscal indiscipline quickly evaporate as soon as growth-sapping cracks in the labor market appear. So much for the bond vigilantes. Tellingly, there was no pullback on Monday. Indeed, Treasury prices climbed even higher, pushing the two-year yield as low as 3.66%, its nadir since May. Long-dated yields have declined too, but not as aggressively, resulting in Friday's dramatic steepening of the 2s/30s curve to levels that, with the exception of April's brief tariff tantrum, haven't been seen for more than three years. Investors may wince at the size of the federal debt and the Treasury's funding needs but still want to load up on two-year bonds when they think rate cuts are coming. This parallel thinking isn't new, but the stark difference in the narratives driving the front and back ends of the curve is notable. The U.S. equity market concentration story is familiar to everyone by now, but the last few days underscore how jaw-dropping - and seemingly entrenched - it is. Blockbuster earnings reports from 'Mag 7' constituents Meta (META.O), opens new tab, Microsoft (MSFT.O), opens new tab and Apple (AAPL.O), opens new tab juiced another wave of outperformance in Big Tech stocks, reviving debate about concentration risk, bubbles and the long-term benefits of AI. By some measures, a few Big Tech firms now account for as much as 40% of the total U.S. stock market cap. Tech is more expensive relative to the broader S&P 500 index than ever, even compared to the dotcom bubble, according to Bank of America. Wall Street's average valuations and earnings growth are therefore increasingly being driven by Big Tech. Strip out the top 10 firms, and the rump S&P 490 has barely registered any earnings growth in the last three years, according to SocGen's Andrew Lapthorne. Again, there are multiple narratives at work here. It may be true that overseas investors want to reduce their U.S. equity exposure, but don't want to miss out on the Big Tech boom. So even if foreign investors start shedding some U.S. assets – and that's debatable – they aren't apt to be jettisoning the likes of Nvidia (NVDA.O), opens new tab and Microsoft. This is a delicate juncture for investors. Wall Street is at record highs, but concentration risk has also rarely been higher. The outlook for long-dated bonds is worrying given current fiscal and inflation dynamics, yet the short end looks much more attractive, though even that is complicated by the economic and unique political pressures bearing down on the Fed. The divergences in U.S. markets may narrow, gradually or suddenly, or they may continue unabated for some time. Without a crystal ball, it's tough to know exactly what the catalyst for mean reversion would be. One thing is likely guaranteed though: in this environment, it will pay to be nimble. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
