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8h ago

Powell Signals Possible September Cut as Trump Pressure Tests Fed Independence

Global central bankers warn that weakening the Fed’s autonomy could unsettle markets worldwide.

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The exterior of the Federal Reserve building is seen in Washington, D.C., U.S., June 14, 2022. REUTERS/Sarah Silbiger/File Photo
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Overview

  • At Jackson Hole, Jerome Powell said the balance of risks has shifted, signaling that a rate cut could come as soon as the September meeting.
  • U.S. stocks rallied and Treasury yields fell after his remarks, with investors increasing bets on near‑term easing and the Dow reaching a new high.
  • President Trump intensified criticism of the central bank, threatened to fire Governor Lisa Cook, and shared a Truth Social graphic targeting Fed officials.
  • FHFA Director William Pulte’s mortgage‑fraud allegations against Cook are under Department of Justice review, while law permits removal of Fed governors only for cause.
  • Officials from Europe and elsewhere cautioned that political encroachment on the Fed could undermine central‑bank independence and destabilize financial markets.