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Trump Goes To War With The Fed

Published

5 months ago

April 18, 2025

Editor

Donald Trump’s simmering discontent with the US Federal Reserve boiled over this week, with the president threatening to take the unprecedented step of ousting the head of the fiercely independent central bank.

Trump has repeatedly said he wants rate cuts now to help stimulate economic growth as he rolls out his tariff plans, and has threatened to fire Fed Chair Jerome Powell if he does not comply, putting the bank and the White House on a collision course that analysts warn could destabilise US financial markets.

“If I want him out, he’ll be out of there real fast, believe me,” Trump said Thursday, referring to Powell, whose second four-year stint as Fed chair ends in May 2026.

Powell has said he has no plans to step down early, adding this week that he considers the bank’s independence over monetary policy to be a “matter of law.”

“Clearly, the fact that the Fed chairman feels that he has to address it means that they are serious,” KPMG chief economist Diane Swonk told AFP, referring to the White House.

Stephanie Roth, chief economist at Wolfe Research, said she thinks “they will come into conflict,” but does not think “that the Fed is going to succumb to the political pressure.”

Most economists agree that the administration’s tariff plans will put upward pressure on prices and cool economic growth — at least in the short term.

That would keep inflation well away from the Fed’s long-term target of two per cent, and likely prevent policymakers from cutting rates in the next few months.

“They’re not going to react because Trump posted that they should be cutting,” Roth said in an interview, adding that doing so would be “a recipe for a disaster” for the US economy.

– Fed independence ‘absolutely critical’ –

Many legal scholars say the US president does not have the power to fire the Fed chair or any of his colleagues on the bank’s 19-person rate-setting committee for any reason but cause.

The Fed system, created more than a century ago, is also designed to insulate the US central bank from political interference.

“Independence is absolutely critical for the Fed,” said Roth. “Countries that do not have independent central banks have currencies that are notably weaker and interest rates that are notably higher.”

Moody’s Analytics chief economist Mark Zandi told AFP that “we’ve had strong evidence that impairing central bank independence is a really bad idea.”

– ‘Can’t control the bond market’ –

One serious threat to the Fed’s independence comes from a case brought by the Trump administration that seeks to challenge a 1935 Supreme Court decision denying the US president the right to fire the heads of independent government agencies.

The Humphreys Executor case could have serious ramifications for the Fed, given its status as an independent agency whose leadership believes they cannot currently be fired by the president for any reason but cause.

Even if the Trump administration succeeds in its case, it may soon run into the ultimate guardrail of Fed independence: The bond markets.

During the recent market turbulence unleashed by Trump’s tariff plans, US government bond yields surged and the dollar fell, signalling that investors may not see the United States as the safe haven investment it once was.

Faced with the sharp rise in US Treasury yields, the Trump administration paused its plans for higher tariffs against dozens of countries, a move that helped calm the financial markets.

If investors believed the Fed’s independence to tackle inflation was compromised, that would likely push up the yields on long-dated government bonds on the assumption that inflation would be higher, and put pressure on the administration.

“You can’t control the bond market. And that’s the moral of the story,” said Swonk.

“And that’s why you want an independent Fed.”

AFP

Headline

UK Nursery Worker Jailed For Abusing 21 Babies

Published

16 hours ago

September 26, 2025

Editor

A judge on Friday jailed a nursery worker for eight years for a string of “gratuitous” and “sadistic” attacks on babies.

In one incident, Londoner Roksana Lecka, 22, kicked a little boy in the face several times.

Lecka, who blamed cannabis for her crimes, admitted seven counts of cruelty to a person under the age of 16 and was convicted after a trial of another 14 counts.

Sentencing her for attacks on 21 babies, Judge Sarah Plaschkes said she had committed “multiple acts of gratuitous violence” at two London nurseries where she worked.

“You pinched, slapped, punched, smacked and kicked them. You pulled their ears, hair and their toes. You toppled children headfirst into cots,” she said.

“Often the child would be quietly and happily minding its own business before you deliberately inflicted pain… Your criminal conduct can properly be characterised as sadistic,” she added.

Lecka’s cruelty was revealed in June 2024 after she was seen pinching a number of children.
Police were called in and found multiple incidents recorded on the nursery CCTV.

Victim impact statements submitted to London’s Kingston Crown Court from parents of Lecka’s victims told how they were left heartbroken and guilt-stricken by the attacks.

“These children were so innocent and vulnerable,” one mother told the court.

“They couldn’t speak, they couldn’t defend themselves and they couldn’t tell us as parents that something had happened to them,” she added.

“They were totally helpless and Roksana preyed upon them.”

The hearing was told that she had apologised to the parents in a letter to the court in which she said cannabis had turned her into a different person.

She had been addicted to the drug around the time of the offences, but had not told the nursery.
She was found not guilty of three further counts of child cruelty.

Headline

Italy Fines Six Oil Firms $1bn Fine For Restricting Competition

Published

19 hours ago

September 26, 2025

Editor

Italy’s antitrust regulator said Friday it has slapped Italian energy giant Eni and five other companies with fines totalling more than 936 million euros ($1.1 billion) for “restricting competition” in the sale of fuel.

The authority said in a statement that Eni, Esso, Ip, Q8, Saras and Tamoil “coordinated to set the value of the bio component factored into fuel prices”, which tripled between 2019 and 2023.

A probe following a whistleblower’s complaint revealed that “the companies implemented parallel price increases — largely coinciding — which were driven by direct or indirect information exchanges among them”, the authority said.

“The cartel began on 1 January 2020 and continued until 30 June 2023,” it added.

AFP

Headline

Trump Signs Order For TikTok’s Sale, Valued At $14bn

Published

21 hours ago

September 26, 2025

Editor

United States President Donald Trump on Thursday signed an executive order declaring that his plan is to sell TikTok’s US operations to American and global investors.

As reported by Reuters on Friday, the order requires companies bidding for TikTok to meet the national-security requirements of the 2024 law that otherwise would ban the app unless its Chinese owners divest.

Speaking to reporters at an Oval Office briefing on Thursday, Vice President James Vance said the newly created US entity would be “valued around $14 billion.

“We actually think this is a good deal for investors, but they will make a determination about what they want to invest and what they think is the proper value,” he said.

The White House on Thursday pushed back the law’s enforcement date to January 20 to allow time for the transaction, investor commitments, and negotiations with Chinese authorities.

The publication of the executive order shows Trump is making progress on the sale of TikTok’s US assets.

However, details remain to be worked out, including how the U.S. company would handle TikTok’s most valuable asset: its recommendation algorithm.

“There was some resistance on the Chinese side, but the fundamental thing that we wanted to accomplish is that we wanted to keep TikTok operating, but we also wanted to make sure that we protected Americans’ data privacy as required by law,” Vance said.

According to Reuters, Trump’s order says the algorithm will be retrained and monitored by the U.S. company’s security partners, and operation of the algorithm will be under the control of the new joint venture.

Trump said Chinese President Xi Jinping had indicated approval of the plans. “I spoke with President Xi,” Trump said. “We had a good talk, I told him what we were doing, and he said go ahead with it.”

Chinese embassy in Washington did not immediately respond to a Reuters request for comment. TikTok did not immediately comment on Trump’s action.

Trump has credited TikTok, which has 170 million U.S. users, with helping him win reelection last year. Trump has 15 million followers on his personal TikTok account. The White House also launched an official TikTok account last month.

“This is going to be American-operated all the way,” Trump said.

He said that Michael Dell, the founder, chairman and CEO of Dell Technologies; Rupert Murdoch, the chairman emeritus of Fox News owner Fox Corp, and newspaper publisher News Corp, and “probably four or five absolutely world-class investors” would be part of the deal.