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Welcome to logoff: President Donald Trump’s Fed maneuver has officially failed.
what happened? On Wednesday, the Fed voted to raise interest rates by a quarter of a percentage point, citing continued inflation. The rate hike was widely expected and would not normally have merited much attention (at least in this newsletter, which generally does not cover monetary policy).
But in this case, it’s also a direct rebuke to President Trump, who has spent the past year and a half pushing for lower interest rates and plotting a takeover of the Federal Reserve to achieve them.
Neither was successful, but Trump likely believed his goal was achievable at the time of the Senate’s deliberations. Confirmed Kevin Warsh was named Fed Chairman in May. But on Wednesday, several months into his four-year term as Fed chairman, Mr. Warsh bucked President Trump’s persistent demands by voting in favor of raising interest rates.
Why is this important? If Mr. Trump succeeds in gaining political control over the Fed, it will be very bad news for almost everyone. Lowering interest rates is a great way to stimulate the economy in the short term, and may be exactly what he wants as the party faces the possibility of medium-term annihilation. But it could also seriously damage the long-term health of the economy, which is why the Fed was designed to be insulated from partisan politics, and it turned out to be successful.
What else should I know? Until now, Mr. Trump response His interest in hiking was modest, at least by his standards.
But he has threatened to take more drastic action: earlier this month he said he would suspend trade relations If the Fed forces a rate hike, “along with countries running deficits.”
It remains to be seen whether he will make good on his threat, but in any case, it is likely that we have yet to hear Trump’s final retaliation against the Fed.
And then it was time to log off…
A little good news from New York. announcement The city is moving ahead with the rollout by Mayor Zoran Mamdani earlier this year. New and free public toilets This week is part of a pilot program to address long-standing complaints by New Yorkers.
Have a great night! See you here tomorrow!