Economic Glance
The Supreme Court said President Donald Trump must allow Lisa Cook to remain on the Federal Reserve for now, rejecting his bid to immediately fire her from the central bank, which has broad influence over the economy through its interest rate decisions.
Rather than grant Trump’s emergency request for her to be fired, the high court said it would hear oral arguments on the issue in January.
The justices are already set to consider a similar case on the Federal Trade Commission, which raises the issue of whether Congress or the courts can protect leaders of independent agencies from removal by the president.
Supreme Court says Trump cannot, for now, remove Lisa Cook from Fed; will take up matter in January
The Federal Reserve’s independence is about to be tested like never before
The time has come to ban the “revolving door” between the White House and the Federal Reserve, two academics argued last year. Doing so would be “critical to reducing the incentives for officials to act in the short-term political interests of the president”, they wrote.
Eight months ago, the two writers – Dan Katz and Stephen Miran – joined the Trump administration in senior roles. On Tuesday, Miran, the chair of the US council of economic advisers, walked into the Fed as a governor.
Strolling through the revolving door himself, Miran pledged during his confirmation hearing to preserve the Fed’s independence, but made clear he would not resign from the White House, just take unpaid leave.
Having expressed concern last year about the Fed’s vulnerability to the short-term political interests of the president, Miran was rushed into his new seat on the central bank’s board of governors hours before its latest meeting – as Donald Trump continued to push to have another voting member removed.
US inflation rises in August as firms pass Trump tariffs cost on to consumers
Inflation rose slightly in August as companies continued to push the cost of tariffs on to consumers.
The newest update to the consumer price index (CPI), which measures a basket of goods and services, showed that prices increased 2.9% over the last year – the highest since January. Core CPI, which excludes energy and food costs, stayed stable at 3.1% after going up in July.
Despite this slight uptick in inflation, Wall Street remains optimistic that the Federal Reserve will cut interest rates at the central bank’s board meeting next week. The Fed is under intense pressure from Donald Trump to cut rates, but the decision looks likely to be led by fears that the US jobs market is weakening.
Investors are anticipating a quarter-point rate cut. Rates currently stand at a range of 4.25% to 5.5%.
US stocks shot up on Wednesday after the producer price index, which tracks wholesale prices, showed a slight dip in August after a steep rise in July, making investors hopeful that inflation – while still rising – is going up at a slow pace.
Cracks in the U.S. economy: Job growth slows 75% from a year ago
The U.S. jobs engine is sputtering and looks to be in danger of stalling out.
U.S. employers added just 22,000 jobs in August, according to a report Friday from the Labor Department. The unemployment rate inched up 4.3%. Revised figures also show there was also a net loss of jobs in June for the first time since 2020, in the midst of the pandemic.
The U.S. has now had four months in a row of pretty anemic job growth. Average job growth between May and August was down 75% from the same period a year ago.
The weakness was visible all across the economy.
"There are not a lot of silver linings in the report," said economist Julia Coronado of Macropolicy Perspectives. "We are losing engines of job growth."
There was a net loss of jobs last month in manufacturing, construction, and oil drilling — all industries that the Trump administration is trying to promote.
Federal appeals court rejects Trump’s emergency tariffs
A federal appeals court on Friday rejected President Trump’s assertion that emergency powers justify his worldwide tariffs, a blow to his efforts to refashion global trade.
In a 7-4 decision, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s ruling that the tariffs were not authorized by the statute Trump cited to justify them.
The International Emergency Economic Powers Act (IEEPA) authorizes the president to issue certain economic sanctions to counter an “unusual and extraordinary threat” in an emergency, but it does not permit the president’s sweeping moves, the court ruled.
“Because we agree that IEEPA’s grant of presidential authority to ‘regulate’ imports does not authorize the tariffs imposed by the Executive Orders, we affirm,” the court wrote.
The ruling does not take effect immediately, as the court withheld the mandate for its decision until Oct. 14, so the administration can appeal to the Supreme Court.
Trump Has Resorted To Making Numbers Up — And Experts Say It Should Worry All Of Us
Donald Trump has a simple solution when numbers are telling him something he does not want to hear: Make up new numbers.
The president’s strategy, if you want to call it one, was on vivid display this week on three fronts: His decision to appoint a conservative crony to an essential federal agency charged with compiling the monthly unemployment numbers, his decision to declare an emergency in Washington, D.C., while dismissing data showing crime in the city is in decline and at decades-long lows, and his demand for a new and likely unconstitutional census which would exclude undocumented immigrants.
In general, when Trump is in power, he likes to paint a rosy picture of an America where everything is going as right as it can be. When he’s out of office, Trump makes wildly false claims about the national unemployment rate and the crime rate to attack Democrats. During his 2016 presidential campaign, for example, Trump claimed the unemployment rate was as high as 42%, even though it was about 5% at the time.
But after a government report suggested the labor market is cooling off in his second term, Trump appears to be gearing up to muzzle or manipulate the Bureau of Labor Statistics, firing its respected leader and announcing plans to replace her with a partisan nominee who suggested getting rid of monthly jobs reports entirely. And that’s after the unemployment rate had only gone up a tenth of a percentage point.
Amazon Web Services gives the Trump admin $1 billion coupon
Amazon Web Services is giving the Trump administration a $1 billion coupon to use their services for the federal government’s digital transformation and artificial intelligence capacity. On Thursday, the General Services Administration announced a sweeping “OneGov” agreement with Amazon Web Services that would yield up to $1 billion in cost savings for federal agencies shifting to cloud services.
The deal, set to run through 2028, is being framed by administration officials as a cornerstone of both the administration’s AI strategy and its broader effort to modernize government IT systems.
The agreement is expected to accelerate cloud adoption across dozens of civilian agencies, support workforce training in AI tools, and establish the technical infrastructure needed to power large language models and machine learning applications. It’s the second major OneGov cloud services deal since President Donald Trump’s executive order on procurement consolidation earlier this year.
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