Trump is out to end the Fed’s autonomy. Here’s how he’s trying to get his way
When Donald Trump stepped up his campaign to influence the US Federal Reserve, he traveled less than a mile from the White House, to tour the central bank’s headquarters.But as the administration considers how to actually get what it wants, one of the US president’s acolytes looked about 500 miles south.A condominium above the Four Seasons hotel in Atlanta, Georgia, is at the heart of an extraordinary battle over the future of the Fed, and the independence of its power of the world’s largest economy.For a generation, presidents have respected the Fed’s autonomy.They might disagree with its decisions.
But they allowed it to make long-term calls in the best interest of the economy, even if they caused short-term political discomfort.Trump has ignored this precedent.Since returning to office in January, he has lambasted the Fed publicly and relentlessly – calling its chairperson, Jerome Powell, a “moron”, a “numbskull” and a “disaster” – and accused the central bank of damaging the US economy by failing to cut interest rates.As the Fed declined to lower rates at five consecutive meetings, Trump escalated his attacks, even suggesting (without evidence) that multi-billion dollar renovations of its Washington headquarters were tantamount to fraud.But policymakers held the line.
With most rate-setting officials wanting to wait and see the impact of Trump’s policies – from trade wars to deportations – on the economy, they sat on their hands.While the Fed might be on the cusp of resuming rate cuts, Powell has made clear rates are unlikely to fall as drastically as the president wants.So how does Trump actually get what he wants?Back to that condo in Atlanta.It was allegedly bought by Lisa Cook, a respected economist appointed by Joe Biden to serve on the Fed’s board of governors, in July 2021.Trump’s officials claim she took out a mortgage which listed the property as her primary residence – two weeks after taking out another mortgage, which listed a property in Ann Arbor, Michigan, as her principal residence.
The allegations – similar to those that the administration has leveled against other opponents – are unconfirmed.But that didn’t stop Trump from immediately demanding Cook’s resignation.When Cook refused to be “bullied”, he tried to fire her.Cook has insisted Trump has no authority to do so, and her attorney has pledged to sue the administration over its bid to remove her from her post.The Fed’s rate-setting Federal Open Market Committee (FOMC) is in Trump’s sights.
There are 12 seats around the table, filled by five representatives of local reserve banks and seven governors.Fed governors, once appointed, are hard to replace.A full term lasts 14 years, enabling them – in theory – to take a longer view on the economy than, say, presidential administrations working on four-year cycles.Cook’s term is not due to expire until 2038.It now appears likely that her future at the Fed will be settled in court.
But Trump’s bid to exert control over the central bank, and its rate-setting committee, does not end there,He has already nominated one ally to sit on the Fed’s board of governors, following the exit of Adriana Kugler, another Biden appointee, earlier this month,Two other governors have already publicly sided with the president on rate cuts, and reportedly made the administration’s shortlist of potential successors to Powell,Powell’s term as Fed chair is due to end in May,His term as a governor is not due to expire until January 2028, but departing chairs have typically left the board at the same time.
The Fed has so far defied Trump’s demands.But each departure enables him to build his influence over its policy committee – with view to obtaining an outright majority.Like the supreme court, these nominations have implications for years to come.The administration is arguing a mortgage on a condo in Atlanta should allow it handpick another official to join the Fed’s board.Who knows what the next purported reason will be, should it have another go.
Trump has made no secret of this plan.“We’ll have a majority very shortly,” he claimed to reporters at a cabinet meeting on Tuesday.“So that’ll be great.”Of course, receiving his backing today does not guarantee his support tomorrow.Eight years ago, when he tapped Powell to lead the Fed, the president delivered a strikingly different verdict to the ones he now routinely publishes on social media.
“He’s strong, he’s committed and he’s smart,” said Trump.
Thames Water agrees payment plan for £123m sewage and dividend fines
Thames Water has agreed a payment plan with the industry regulator for fines it owes worth £123m, as it races to secure funding to avoid temporary nationalisation.The utility company, which serves 16 million customers across London and the south-east, is trying to pull together a deal to avoid collapse.The debt-laden utility company was hit with a record £104m fine by Ofwat in May over environmental breaches involving sewage spills, after failing to operate and manage its treatment works and wastewater networks effectively.At the same time, a further £18.2m fine was levied on Thames for breaking dividend rules, the first penalty of its kind in the water industry
Scottish government trial of four-day week improves productivity and staff wellbeing
Increased productivity and improved staff wellbeing were among the results of a year-long trial of the four-day week by the Scottish government.Two public bodies, South of Scotland Enterprise (SOSE) and Accountant in Bankruptcy (AiB), took part in the pilot, which was launched by Holyrood in early 2024.The two organisations, which had 259 employees in total throughout the trial, implemented a 32-hour working week for a year without any loss in pay or benefits for staff, while committing to maintaining standards of service.AiB and SOSE staggered the non-working day among staff to allow the bodies to function as normal, while part-time staff were offered proportional reductions in their working time.Staff at the two organisations reported less work-related stress and greater satisfaction with their jobs and work-life balance
Teen killed himself after ‘months of encouragement from ChatGPT’, lawsuit claims
The makers of ChatGPT are changing the way it responds to users who show mental and emotional distress after legal action from the family of 16-year-old Adam Raine, who killed himself after months of conversations with the chatbot.Open AI admitted its systems could “fall short” and said it would install “stronger guardrails around sensitive content and risky behaviors” for users under 18.The $500bn (£372bn) San Francisco AI company said it would also introduce parental controls to allow parents “options to gain more insight into, and shape, how their teens use ChatGPT”, but has yet to provide details about how these would work.Adam, from California, killed himself in April after what his family’s lawyer called “months of encouragement from ChatGPT”. The teenager’s family is suing Open AI and its chief executive and co-founder, Sam Altman, alleging that the version of ChatGPT at that time, known as 4o, was “rushed to market … despite clear safety issues”
US parents and teachers: share your experiences of AI in schools
Students in grades K-12 have been invited by Melania Trump to take part in a nationwide contest designed to encourage the use of artificial intelligence (AI) tools to help solve community issues. The first lady wants students to “unleash their imagination and showcase the spirit of American innovation” by participating in the government-sponsored contest.We want to hear from parents and teachers on their experiences of AI in schools. How do you feel about it being used in education? Do you support it or are you against it?You can tell us what you think of the use of AI in schools by filling in the form below.Please include as much detail as possible
US Open tennis 2025: Raducanu, Djokovic and Pegula in action on day four – live
So farm Svajda is doing nicely, 2-2 against Djokovic, and with Raducanu blazing a return past Tjen for 4-0, I’m going to pay that match more attention – though first i’m checking the draw, so well is she playing. And next up, it’s Rybakina or Valentova – tasty.Navarro did indeed take the first set off McNally 6-2; Azarenka has broken Pavlyuchenkova back for 3-3; Etcheverry took the first set against Lehecka 6-3 but trails by a break at 1-0 in the second; and Nakashima is trying to serve out the first set at 5-4 against Kym.I’ve never seen Svajda play before, so I’m interested to see what be brings. To get to this stage he won four quallies then his first-round match, which tells us he’s in form
Ryder Cup: USA captain Keegan Bradley does not pick himself to play at Bethpage
Keegan Bradley has opted against becoming the first Ryder Cup playing captain since 1963. The United States captain named his eagerly awaited six wildcard picks on Wednesday, taking the difficult decision not to try to combine roles in New York next month.Bradley is ranked 11 in the world but opted for others. Justin Thomas, Collin Morikawa, Ben Griffin, Cameron Young, Patrick Cantlay and Sam Burns received the captain’s call. Bradley reflected on “the most incredible year of my life” as he announced his decisions during a media conference in Texas
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Five current and ex-Microsoft workers arrested at sit-in over Israeli military ties
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Hundred to drop draft in favour of IPL-style auction as new owners’ influence grows