Federal Reserve

WASHINGTON  — The Supreme Court on Monday gave President Trump new power to fire the heads of most independent agencies created by Congress — but not the Federal Reserve.

Chief Justice John G. Roberts Jr. announced two opinions, one of which bolstered the president’s power as the chief executive and a second which said this authority did not extend to the Federal Reserve board.

The first was a 6-3 decision that had the support of five conservatives, while the second had a 5-4 majority that included the three liberals.

Roberts, a former White House lawyer, has long been skeptical of independent agencies whose officials may wield regulatory power in conflict with the views of the president.

Since the 1880s, however, Congress has at times created independent agencies led by a bipartisan board of experts. In 1935, a unanimous Supreme Court had upheld these multi-member boards and commissions.

But Roberts and the court overturned that precedent and declared it conflicts with the executive power of the president.

“Our Constitution creates three branches, but only one President,” he wrote. “To discharg[e] the duties of his trust, the President must have the assistance of officers he can trust. … Subordinates who exercise the President’s power are subject to removal by him. Then, and only then, can they remain accountable to the President, and the President to the people.”

The decision upholds Trump’s firing of Rebecca Slaughter, one of two Democratic appointees on the five-member Federal Trade Commission.

The Supreme Court upheld President Trump’s firing of Rebecca Slaughter, a Democratic appointee to the Federal Trade Commission.

(Graeme Sloan / Bloomberg / Getty Images)

In dissent, Justice Sonia Sotomayor said that the ruling “distorts the structure of government to fit the majority’s theory of unitary, total executive control. The result is a President who emerges with far greater power than ever before. It is a power, however, that neither the People, nor Congress, nor the Constitution bestowed upon him.”

Under what has been dubbed the “unitary executive” theory, the court’s conservatives believe the president’s executive power in Article II of the Constitution overrides Congress’power in Article I to write the laws and structure the government.

The departments and agencies of the federal government exist only because Congress created them by law.

But in the second opinion, the court blocked Trump’s bid to fire Fed Governor Lisa Cook, an appointee of President Biden.

Roberts said the central bank dates back to the nation’s founding, and Congress created the Federal Reserve Board in line with “our Nation’s tradition of central banking protected from political interference.”

Trump tried to fire Lisa Cook in a social media post, he said.

But “the Federal Reserve’s Governors do not serve at the President’s pleasure — they instead serve staggered 14-year terms, and may be removed only ‘for cause’,” he wrote.

Justice Brett M. Kavanaugh cast a crucial vote to support the Fed’s independence. He said he joined the majority because it “confirms the longstanding historical practice and understanding that the Federal Reserve is an independent agency whose Governors enjoy for-cause removal protection consistent with Article II of the Constitution.”

The court did not finally decide on Cook’s case, except to say she deserved due process of law. She could not be fired without a hearing and evidence, the court said.

The setback for independent agencies came as no surprise, however.

Even prior to Trump’s election, Roberts has insisted agency officials must be accountable and under the control of the president.

Last year, the justices blocked lower court rulings that would have reinstated agency officials who were fired by Trump.

For most of American history, however, it had been understood that Congress had the power to structure the government and to create semi-independent agencies to carry out specific tasks like regulating railroad rates or the money supply.

These agencies and commissions were led by a bipartisan board of experts who were appointed with a fixed term. They could be fired only for cause, not because of a political disagreement with the president.

The Supreme Court upheld these multi-member commissions in 1935 on the grounds their work was more legislative and judicial than simply enforcing the law.

But the court’s current conservative majority has contended these commissions and boards wield executive authority and are therefore, subject to direct control by the president.

In creating such bodies, Congress often was responding to the problems of a new era.

The Interstate Commerce Commission was created in 1887 to regulate railroad rates. The FTC, the focus of the court case, was created in 1914 to investigate corporate monopolies.

The year before, the Federal Reserve Board was established to supervise banks, prevent panics and regulate the money supply.

During the Great Depression of the 1930s, Congress created the Securities and Exchange Commission to regulate the stock market and the National Labor Relations Board to resolve labor disputes.

Decades later, Congress focused on safety. The National Transportation Safety Board was created to investigate aviation accidents, and the Consumer Product Safety Commission investigates products that may pose a danger. The Nuclear Regulatory Commission protects the public from nuclear hazards.

Typically, Congress gave the appointees, a mix of Republicans and Democrats, a fixed term and said they could be removed only for “inefficiency, neglect of duty or malfeasance in office.”

Slaughter was first appointed by Trump to a Democratic seat and was reappointed by Biden in 2023 for a seven-year term.

June 29 (UPI) — The U.S. Supreme Court ruled Monday that Congress’ restriction of the president from firing independent agency employees without cause violates the separation of powers.

The court upheld President Donald Trump‘s firing of Rebecca Slaughter, a Democratic member of the Federal Trade Commission, overturning 90 years of precedence. The ruling came down along ideological lines with the conservative majority upholding Slaughter’s firing in a 6-3 decision.

Writing the majority opinion, Chief Justice Roberts said Congress’ “for cause” removal protections, meant to shield independent agencies from political influence, violate the separation of powers.

“What text, history, and structure settle, our precedent confirms — the president may remove his subordinates at will,” Roberts wrote.

Justice Sonia Sotomayor wrote in the minority opinion that the decision has given the president “far greater power than ever before.”

“It is a power, however, that neither the People, nor Congress, nor the Constitution bestowed upon him. In granting the President this unbridled authority, the Court upends its precedent, misconstrues our history, and sheds any pretense of judicial modesty. I respectfully dissent.”

The court’s decision upends the precedent set in 1935 in the case Humphrey’s Executor vs. United States. The high court in that case ordered that Congress could restrict the president from firing members of the FTC without cause.

“Although it is up to the Senate to decide whether to confirm those with whom the President would prefer to work with, neither Congress nor the courts may saddle him with those with whom he cannot work,” Roberts wrote. “Subordinates who exercise the President’s power are subject to removal by him. Then, and only then, can they remain accountable to the President, and the President to the people.”

While the high court allowed Trump to fire Slaughter, it rejected his bid to fire Fed Governor Lisa Cook from the Federal Reserve for the moment.

Trump attempted to pause a federal court ruling that prevented him from firing Cook last year. A lawsuit was filed challenging the attempt. In a 5-4 ruling Monday, the Supreme Court rejected the attempt by Trump.

Roberts penned the majority opinion in this case as well, joining the three liberal justices and conservative Justice Brett Kavanaugh.

“Not only the fact of independence but also the appearance of independence is key to the Federal Reserve’s design,” Roberts wrote.

Seoul stocks surged by more than 2 percent past another historic landmark, surpassing the 9,000-point level for the first time in history, as investors bet on chipmakers in the face of a hawkish stance by the Federal Reserve and Iran uncertainty.

The benchmark Korea Composite Stock Price Index (KOSPI) closed up 199.6 points, or 2.25 percent, to 9,063.84, after rising as high as 9,106.07.

The KOSPI continued its winning streak for the sixth consecutive session on the back of optimism over artificial intelligence (AI) and related sectors.

Trade volume was heavy at 505.9 million shares worth 49.9 trillion won (US$32.7 billion). Foreigners were net buyers, snatching up 1.3 trillion won, while retail and institutional investors net sold a combined 1.2 trillion won.

Losers outnumbered gainers 109 to 788.

The index bucked overnight losses on Wall Street caused by Fed policymakers’ remarks that a rate hike would be inevitable to tame inflation.

The continued rally was led by the country’s two major chipmakers, Samsung Electronics and SK hynix, said analyst Kim Seok-hwan from Mirae Asset Securities.

“Investors are anticipating that semiconductor companies could gain better bargaining power due to a sustained supply bottleneck,” the analyst said.

A risk appetite was also revived on anticipation the U.S.-Iran war is nearing its end. The United States has said Iran has agreed to reopen the Strait of Hormuz, a key oil shipping route, and revealed a signed memorandum of understanding on ending the war.

The rate freeze from the Fed, the fourth consecutive on-hold decision, appeared to have a limited impact on investor sentiment.

Market top cap Samsung Electronics rose 4.62 percent to 362,500 won, while its rival SK hynix jumped 6.51 percent to 2,685,000 won.

Non-semiconductor sectors lost ground.

Defense giant Hanwha Aerospace fell 2.86 percent to 1,189,000 won, ship builder HD Hyundai Heavy Industries retreated 3.25 percent to 684,000 won, and major financial firm KB Financial inched down 0.55 percent to 163,100 won.

The Korean won was quoted at 1,527.1 won against the U.S. dollar, down 13.7 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4 basis points to 3.75 percent, and the return on the benchmark five-year government bonds added 5.2 basis points to 3.949 percent.

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Published on
17/06/2026 – 12:55 GMT+2

The era of Chair Warsh begins in earnest this Wednesday, as US President Donald Trump’s pick to run the Fed presides over his debut rate decision and steps before the cameras for his first press conference in the role.

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Few economists anticipate dramatic action on day one, but the meeting carries unusual weight for what it might reveal about the months ahead.

Policymakers are expected to hold the benchmark rate steady at a target range of 3.50% to 3.75%, which would mark the fourth consecutive meeting without a move. The committee cut 25 basis points in December 2025.

The bigger question is the language, with officials potentially revising their post-meeting statement to drop any hint that the next step will be a reduction, signalling instead that rates may stay elevated for some time, or even rise should inflation prove sticky.

Warsh inherits a far less accommodating picture than the one he faced when he was widely seen as campaigning for the job last year.

At that time, he argued forcefully for lower rates, echoing US President Donald Trump’s demands, and pointed to AI as a force that could expand the economy’s productive capacity and tame prices over time.

Many economists doubted that thesis even then, noting that the surge of investment in semiconductors and computing equipment was adding to inflationary pressure rather than easing it.

A changed economic backdrop

Inflation has indeed accelerated since the outbreak of the Iran war in late February, climbing to a three-year high of 4.2%, driven largely by costlier petrol.

US President Donald Trump has announced a framework for a peace deal that could end the conflict, but it is unclear whether the truce will hold, and prices for fuel, groceries and airfares could take months to cool even if Middle Eastern oil flows freely again.

By the Fed’s preferred gauge, inflation has now run above its 2% target for more than five years. Hiring, meanwhile, has remained resilient.

May brought 172,000 new jobs, a third straight month of solid gains, removing much of the rationale for the two rate cuts the Fed had pencilled into its January projections.

Because the rate itself looks settled, attention turns to the Fed’s updated Summary of Economic Projections and its closely watched “dot plot”, the quarterly projection of future interest rates.

According to Bank of America economist Aditya Bhave, the new dot plot could show the Fed keeping rates on hold for the rest of 2026, with at least three of the committee’s 12 voting members potentially pencilling in rate hikes this year.

Communication is the other wildcard. Warsh has argued that the central bank should speak less often and keep a lower profile, on the view that publicly stated positions can trap policymakers into defending them well past their usefulness.

One option would be to thin out the calendar of press conferences, reverting to the every-other-meeting rhythm favoured by Ben Bernanke, who chaired the Fed from 2006 to 2014, when the format was introduced. Leaner guidance, however, risks unsettling markets long accustomed to clear direction.

Adding intrigue, predecessor Jerome Powell remains on the board as a governor, a seat he can hold until January 2028, and is expected to vote on Wednesday’s decision, denying the Trump administration an additional vacancy to fill.

Additional sources • AP

South Korean stocks nosedived more than 8 percent Monday, extending their losing streak to a third consecutive session, as investors dumped market heavyweights on renewed woes over artificial intelligence (AI) profitability and concerns over a possible hawkish pivot of the U.S. Federal Reserve.

The local currency rose against the U.S. dollar after opening at a 17-year low, in the face of verbal intervention by financial authorities.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 676.18 points, or 8.29 percent, to close at 7,484.41, after falling as low as 7,442.73. The secondary KOSDAQ index sank more than 9 percent to end at 911.39.

The KOSPI’s trade volume was heavy at 448.3 million shares worth 47.8 trillion won (US$31.2 billion), with losers sharply outnumbering winners 873 to 42. Foreigners and institutions dumped local shares worth 355.5 billion won and 1.6 trillion won, respectively, while retail investors scooped up 1.76 trillion won.

The Monday crash was largely anticipated on sharp losses on Wall Street last week, fueled by semiconductor shares’ biggest daily percentage drop since March 2020 and fears over a possible rate hike by the Fed sparked by a hotter-than-expected U.S. jobs report for May.

The Dow Jones Industrial Average closed 1.35 percent lower Friday (local time), while the S&P 500 dipped 2.64 percent and the tech-heavy Nasdaq composite slid 4.18 percent.

Major U.S. chip shares sharply lost ground, with Nvidia slumping 6.2 percent, Broadcom contracting 7.92 percent and Micron shooting down 13.25 percent.

The Korea Exchange (KRX) had activated a circuit breaker for the KOSPI about three minutes after opening, halting trading for 20 minutes, and implemented a consecutive sell-side sidecar at around 9:34 a.m.

The KRX had also issued a sell-side sidecar for the secondary KOSDAQ market about six minutes after opening, suspending trading for five minutes, and activated a circuit breaker for the index later in the day after the KOSDAQ fell by more than 8 percent.

“Today’s pullback appears to be driven not by the weakening of market fundamentals, but by profit-taking sentiment among investors, mainly targeted at the semiconductor sector, as the market reacted more sensitively to negative developments after an extended rally of chip shares,” a report by Samsung Securities said.

The KOSPI has been one of the best performing stock indexes across the world in recent months, surging to near the unprecedented 9,000-point mark on Tuesday last week from the 5,000-point level earlier this year, mainly driven by major semiconductor shares, including Samsung Electronics and SK hynix.

“There is a lot at stake in this week’s financial market, with U.S. inflation data, treasury yields and the ongoing debate over the sustainability of AI-related investment all unfolding simultaneously,” said Seo Sang-young, an analyst at Mirae Asset Securities.

Han Ji-young, a researcher at Kiwoom Securities, also anticipated a “challenging” week for the KOSPI, noting that the release of the U.S. Consumer Price Index for May, the SpaceX listing and Oracle’s earnings results planned for this week may weigh on the market.

Market analysts also said news that Iran and Israel traded strikes dampened investors’ risk appetite, dimming hopes for peace in the Middle East.

Market top-cap Samsung Electronics slid 10.18 percent to 295,500 won, while its chipmaking rival SK hynix dipped 7.68 percent to 1.91 million won.

AI investment firm SK Square nosedived 11.13 percent to 1.12 million won.

Samsung Life Insurance lost 8.97 percent to 375,500 won, and Samsung C&T plunged 11.29 percent to 408,500 won.

Top automaker Hyundai Motor plummeted 8.71 percent to 639,000 won, and its auto parts making affiliate Hyundai Mobis shot down 12.2 percent to 612,000 won.

Leading battery maker LG Energy Solution pulled back 6.16 percent, and its smaller rival Samsung SDI sank 11.44 percent.

Home appliances maker LG Electronics slipped 11.55 percent to 268,000 won, while power plant manufacturer Doosan Enerbility shed 10.25 percent to 85,800 won.

Internet portal operator Naver was among the few winners, jumping 9.2 percent on news that the company is conducting a joint project with U.S. AI chip giant Nvidia to build a massive global AI factory and the nomination of Han Seong-sook, former chief executive officer (CEO) of Naver and incumbent minister of small and medium-sized enterprises (SMEs), as South Korea’s new prime minister.

SK Networks surged 30 percent to 14,170 won on SK Group and Nvidia’s announcement of a broader partnership for AI infrastructure.

The Korean won was quoted at 1,535.0 won against the U.S. dollar at 3:30 p.m., up 4.1 won from the previous session, after opening at 1,555.2 won, the lowest mark since March 6, 2009, when the global markets were in a financial crisis.

The local currency turned higher after financial authorities vowed stern action against excessive volatility and one-sided movements in the foreign exchange market.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 5.8 basis points to 3.940 percent, and the return on the benchmark five-year government bonds gained 7 basis points to 4.190 percent.

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June 4 (UPI) — Acting Director of National Intelligence Bill Pulte, whose new assignment has drawn bipartisan criticism, won’t be the “permanent” choice for the job, President Donald Trump said Thursday.

Trump, speaking to reporters Thursday the White House, said Pulte’s role as acting director of DNI to replace Tulsi Gabbard, which began Tuesday, would not be “permanent.”

Rather, the president said Pulte will be “very good” as he takes the job on for a “little while,” while also asserting he will be able to “figure it out quickly.”

Gabbard announced her resignation in May, saying she will step down June 30, and Trump’s pick of Pulte to replace her two days ago ignited a backlash among lawmakers of both parties.

A former housing developer and currently director of the Federal Housing Finance Agency, Pulte — a staunch Trump loyalist — has no experience in foreign intelligence work, a fact that has sparked criticism from both sides of the political aisle.

Sen. Thom Tillis., R-N.C., on Wednesday blasted Pulte as an “incendiary attack dog” for Trump who likely wouldn’t pass Senate muster for confirmation.

“I don’t think he has a prayer” of becoming the permanent DNI, Tillis told CNBC, adding that Pulte’s presence could hurt the GOP congressional majority’s efforts to reauthorize the part of the Foreign Intelligence Surveillance Act governing warrantless surveillance.

Similarly, Sen. Ron Wyden, D-Ore., a long-serving member of the Senate Intelligence Committee, decried the choice of Pulte for DNI director, saying Trump is “appointing his top political henchman to one of the most important positions for protecting the safety of Americans and preventing terrorist attacks like September 11th.”

Pulte, he said, “appears to be unscathed by intelligence or any semblance of ethics,” noting he has already used his post at a housing agency “to persecute Trump’s political opponents, including Senator Adam Schiff, New York Attorney General Leticia James and Federal Reserve Board member Lisa Cook.”

Pulte has alleged fraud against several of Trump’s foes in their mortgage applications, including Cook for claiming two different homes as her primary residence. She has appealed her firing by Trump to the U.S. Supreme Court.

June 1 (UPI) — Research shows that a rise in remote work since the COVID-19 pandemic is connected to a rise in unemployment among younger employees, the Federal Reserve Bank of New York reported Monday.

In a blog post, the research authors said they estimate about 64% of the rise in unemployment among recent college graduates has to do with the connection to remote work, which “makes it more difficult for manager sto train and mentor new employees,” they wrote.

“Accordingly, companies may be reluctant to hire less-experienced workers in distributed work arrangements,” the post continued.

The authors said that unemployment among those younger than 29 was an average of 3.1% in 2017-19, compared to an average of 3.7% in 2022-25. Conversely, they wrote, the unemployment rate for more experienced college graduates fell from 1.9% in 2017-19 to 1.8% in 2022-25.

The researchers said they used data on both “remotable” and “non-remotable” jobs, comparing how easily common tasks for a given job can be done remotely. They also used proprietary data from an unnamed Fortune 500 company.

“We show that when people work next to their colleagues, they receive more feedback on their output and more mentorship,” the authors wrote. “When they are separated by even a short distance, that feedback tapers off dramatically. The loss in feedback is more pronounced for younger workers, who miss out on constructive comments that spur their development.”

However, Nicholas Bloom, an economics professor at Stanford University who studies remote work, said that even companies that have remote work often have opportunities for time on site, CNBC reported.

“I don’t think there is any evidence this is slowing employment,” Bloom said. “Indeed, quite the reverse, as it’s easier for people to work and so labor supply looks to be rising.”

Published on
14/05/2026 – 14:35 GMT+2

Long-term US borrowing costs climbed to levels not seen since before the global financial crisis after the Treasury auctioned $25bn (€21.3bn) in 30-year bonds at a high yield of 5.058% on Wednesday, according to the department’s own data.

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The sale came only hours after the US Senate voted to confirm former Federal Reserve governor Kevin Warsh as the next chairman, succeeding Jerome Powell.

The auction result immediately complicated the backdrop for Warsh’s arrival at the central bank, underlining the pressure facing policymakers as inflation is rising.

At the time of writing on Thursday, US 30-year bonds are trading at 5.02% while 10-year notes are selling with a yield of 4.44%.

US inflation figures released earlier this week showed consumer prices rose 3.8% from April 2025 as the 10-week Iran war pushed energy costs higher and distanced inflation from the Federal Reserve’s 2% target.

Producer price data also pointed to persistent underlying cost pressures across the economy, reinforcing expectations that the central bank may struggle to ease monetary policy quickly.

Rising Treasury yields have broad implications for the economy because they influence borrowing costs on mortgages, corporate debt and other forms of credit.

Higher long-term yields can also increase financing costs for the US government at a time when public debt is nearing $40 trillion (€34.1tn).

Investors are increasingly concerned that a combination of resilient economic growth, elevated energy prices and sustained government borrowing could keep inflationary pressures alive despite two years of restrictive monetary policy.

The yield on the benchmark 30-year Treasury bond being auctioned above 5% is a symbolic threshold last reached in 2007 before the onset of the global financial crisis.

While market conditions today differ substantially from that period, the move nonetheless underscores the sharp repricing that has taken place in global bond markets over the past two years.

Kevin Warsh inherits a difficult policy environment

Kevin Warsh takes over the Federal Reserve at a delicate moment for the US economy.

The former Morgan Stanley banker and Fed governor has previously argued in favour of maintaining the central bank’s credibility on inflation, while also signalling support for reforms to the institution’s communication strategy and balance sheet policies.

Warsh’s confirmation comes as financial markets remain divided over how aggressively the Federal Reserve should respond to persistent inflation pressures.

Some investors believe rates may need to stay higher for an extended period, while others warn that maintaining tight monetary conditions for too long could weigh heavily on economic growth and employment.

The main driver of the rise in inflation is the current disruption to global energy markets caused by the Iran war which also leaves the central bank at the mercy of geopolitics and not able to effectively control the situation.

Analysts stated that Wednesday’s Treasury auction illustrated the immediate challenge confronting the incoming Fed chair.

Elevated bond yields can help tighten financial conditions without additional rate increases from the central bank, but they can also amplify risks for heavily indebted households, businesses and the federal government itself.

For Warsh, the market reaction served as an early reminder that restoring confidence on inflation may prove more complicated than simply holding interest rates at restrictive levels.

WASHINGTON — The Senate confirmed President Trump’s nominee to lead the Federal Reserve, Kevin Warsh, bringing new leadership to the world’s most powerful central bank at a fraught moment for the global economy.

Warsh was confirmed Wednesday in a largely party-line vote. His nomination had been thrown into doubt in recent months after Republican Sen. Thom Tillis of North Carolina said he would block the nomination while the Justice Department investigated Fed Chair Jerome H. Powell. The Powell inquiry was dropped in April, clearing the way for the Senate to confirm Warsh.

Senate Majority Leader John Thune (R-S.D.) urged colleagues to support Warsh during a floor speech Wednesday morning, saying it’s crucial that a Fed chair “understand not only the macro” but also “appreciate the microeconomy: and that’s the hardworking Americans, their jobs and their livelihoods.”

“Kevin Warsh is just such a person,” Thune said.

Warsh, 56, a former top Fed official, will become chair at an unusually difficult time for the independent agency.

Inflation has topped the Fed’s 2% target for five years and is now rising faster because of surging gas prices. The Fed’s interest rate-setting committee is divided and saw the most dissenting votes in more than three decades last month. And Powell, after years of personal attacks from the Republican president and an unprecedented legal investigation by the Justice Department, plans to stay on the Fed’s board even after his term as chair ends, potentially creating a competing power center.

Trump has demanded change at the Federal Reserve

The Fed has faced numerous threats to its independence from Trump, who has repeatedly attacked Powell for not cutting interest rates. Trump also sought to fire Fed Gov. Lisa Cook and launched an investigation into brief Senate testimony by Powell on a building renovation.

Kevin Hassett, director of the White House’s National Economic Council, said in a Fox News interview on Sunday that he believes the markets are relieved that Warsh “is going to help lower interest rates over time.”

“Obviously, data driven,” said Hassett. “I’m not putting any pressure on Kevin Warsh.”

In December, Trump said on his social media platform that he wanted a Fed chair who would cut interest rates when the stock market rose — the opposite of what traditional economics would prescribe — and added, “Anyone that disagrees with me will never be the Fed chairman!”

Trump’s comments have fueled concerns over whether Warsh will set rates based on economic conditions or seek to cut rates to appease Trump, even if doing so could worsen inflation. At Warsh’s confirmation hearing last month, Sen. Elizabeth Warren, a Democrat from Massachusetts, derided him as a “sock puppet” for Trump. Warsh declined to say that Democrat Joe Biden had won the 2020 election against Trump, who has falsely claimed that voter fraud cost him reelection.

Still, Warsh denied at the hearing that Trump had pressured him to reduce the Fed’s key rate.

“The president never once asked me to commit to any particular interest rate decision, period,” Warsh said then. “Nor would I ever agree to do so if he had. … I will be an independent actor if confirmed as chair of the Federal Reserve.”

A critic of the Fed’s leadership in the past

Warsh has been highly critical of the Fed’s recent track record, particularly the inflation spike in 2021-22, the worst in four decades, and has called for “regime change.” Yet he has provided only broad outlines of what that change would involve.

He has called for limiting the Fed’s communications, which would be a sharp shift after decades of increasing transparency. He has argued that some of its communications tools, such as quarterly forecasts of where its key rate may head, have made it harder for officials to switch gears.

Senate Democrats also have condemned Warsh for not fully divulging the details of his extensive wealth, which disclosures show amounts to at least $100 million. His investments include stakes in Polymarket and SpaceX, but he hasn’t revealed how large those holdings are. He promised to sell all such assets within 90 days of being sworn in.

“He will be the wealthiest Fed chair in history, but he refuses to provide transparency to the American people about who he is entangled with,” Warren said.

Warsh faces difficult economic conditions

The Fed is still grappling with how to respond to the 50% jump in gas prices from the Iran war. The increase has boosted inflation, which reached 3.8% in April.

The Fed is tasked by Congress with keeping prices stable, which it seeks to do by raising its short-term rate to make borrowing and spending more expensive, cooling growth and inflation.

The Fed typically looks past temporary price increases that stem from supply disruptions, such as the war’s cutoff of oil through the Strait of Hormuz, because those prices typically level off — or even fall back down — once the supply is restored.

But the Fed also followed that approach after the COVID-19 pandemic snarled global supply chains for goods, lifting prices for things such as cars, furniture and electronics. Inflation turned out to last longer than expected, and Powell and other Fed officials have acknowledged they waited too long to raise rates. Inflation surged to 9.1% by June 2022.

The Fed’s rate-setting committee has kept rates unchanged for three straight meetings as it evaluates the effect of the gas price spike. At its most recent meeting last month, three members of the committee objected to language that suggested its next move would be a rate cut. They preferred more neutral language that would allow for a hike. Many Fed watchers saw those dissents as a warning shot to Warsh that he won’t be able to easily engineer rate reductions.

A fourth member of the 12-member committee, Stephen Miran, dissented in favor of a rate cut, as he has at every meeting since Trump appointed him to the Fed’s board last September. Miran is serving until a replacement is named, and Warsh will take his spot.

Powell, meanwhile, said at a news conference April 29 that he would remain as a Fed governor until the Justice Department closes its investigation into the Fed’s building project, the first time a chair may stay on the board for an extended period since 1948. His term as a governor lasts until January 2028.

U.S. Atty. Jeanine Pirro has dropped the government’s investigation, but she has said it could be reopened if the Fed’s inspector general office, which has looked into the renovation project since last July, finds evidence of criminal activity.

Rugaber and Cappelletti write for the Associated Press.

May 13 (UPI) — The U.S. Senate voted to confirm Kevin Warsh on Wednesday as the new chairman of the Federal Reserve. Warsh, who was nominated by President Donald Trump, succeeds Jerome Powell, who has been frequently criticized by the president for not lowering interest rates in accordance with Trump’s demands.

The Senate voted 54-45 to confirm Warsh in the most partisan vote for a chair nominee in history, CNN reported. Sen. John Fetterman, D-Pa., was the only Democrat to vote in favor of the confirmation.

Warsh will be the 17th chair of the central bank, which is traditionally politically independent. However, Trump has aimed a great deal of criticism at the Fed and its governors over that independence, insulting Powell harshly at times and threatening to fire him.

The president also supported a Justice Department investigation into Powell, allegedly over costs for the central bank headquarters renovation. Powell has said that Trump targeted him because of the Fed would not follow his orders on interest rates. The Justice Department dropped the investigation in late April.

Democrats have expressed concerns about Warsh’s independence from Trump if confirmed. The new Fed chair has said he will be “an independent actor” but also promised a “regime change” at the central bank, The New York Times reported.

Warsh is the wealthiest Fed chair nominee in recent history, with a net worth over $100 million. He is married to Jane Lauder, who is an heir to the Estee Lauder fortune, and also has about $192 million in assets in combination with her.

Warsh said that he would divest a large amount of his assets and resign from several positions if confirmed. He also served as a governor at the Federal Reserve from 2006 to 2011.

Powell’s term as chair ends Friday, but he has said he’ll stay as a fed governor for his remaining two years.

May 12 (UPI) — Prices for consumer goods rose faster than expected in April, with food and energy prices driving the spike, the Bureau of Labor Statistics said Tuesday.

The Consumer Price Index for All Urban Consumers increased 0.6% on a seasonally adjusted basis in April, after rising 0.9% in March, the BLS said. Over the past 12 months, the all-items index increased 3.8% before seasonal adjustment.

The energy index rose 3.8% in April, which was more than 40% of the increase. That put the 12-month rise at 17.9%. The gasoline index rose 28.4% annually.

Airline fares rose 2.8%, making the 12-month rise at 20.7%, CNBC reported.

Food prices rose 0.5% for the month. The price of food at home rose 0.7%, which is the biggest monthly rise since August 2022, CNBC reported. The price for food away from home increased 0.2%, the BLS said.

When excluding energy and food, prices rose 0.4% in April. Those prices are calculated from household furnishings and operations, airline fares, personal care, apparel and education. That number puts inflation higher than the 2% goal set by the Federal Reserve, with the monthly rate at its highest since January 2025.

But the index for new vehicles, communication and medical care decreased in April. New vehicles and communication declined 0.2%, while medical care declined 0.1%. Used vehicle prices stayed flat.

Workers are feeling the pinch, too, as real average hourly wages dropped 0.5% for the month and 0.3% annually.

“Inflation is the key drag on the U.S. economy now,” said Heather Long, chief economist at Navy Federal Credit Union, CNBC reported. “This is hurting Americans. There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households and they know it.”

Whether the Fed will lower interest rates in the wake of rising inflation is a concern for economists.

“Given that inflation is heading in the wrong direction and the labor market is holding up, it’s very unlikely that the Fed will be able to lower interest rates any time soon, and it’s possible that we may start pricing in rate hikes for next year,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, CNBC reported.

April 26 (UPI) — U.S. Sen. Thom Tillis, R-N.C., said on Sunday that he will end his blockade of Kevin Warsh’s confirmation as Federal Reserve chair after the Department of Justice ended its investigation into current chair Jerome Powell.

U.S. Attorney Jeanine Pirro on Friday said the Justice Department was ending its investigation into Powell over the Fed’s budget for renovations to its headquarters and has threatened him with criminal charges over testimony he gave about the costs.

Tillis made the announcement during an interview on NBC News’ “Meet The Press,” because the department assured him that it has “completely and fully ended” the investigation.

He had previously said he would block all Trump nominees until the probe was dropped.

“We worked a lot over the weekend to make sure that we were very clear that we have assurances from the Department of Justice that I needed to feel like they were not using the department as a weapon to threaten the independence of the Fed,” Tillis told NBC News.

The Justice Department launched a criminal investigation into Powell in January after President Donald Trump questioned the Fed being over budget on renovations to its headquarters in Washington, D.C.

The investigation was condemned by several members of Congress as improper, including Tillis, because it was seen as politically motivated punishment from Trump for not setting interest rates at levels he preferred.

Pirro said Friday that she has asked the Federal Reserve’s inspector general to investigate the renovation costs, which she said is “billions of dollars” over budget, and that she expects a “comprehensive report” on the matter.

She noted, however, that she “will not hesitate to restart a criminal investigation should the facts warrant doing so.”

April 22 (UPI) — Federal Reserve Chairman Jerome Powell‘s term is nearing its end and President Donald Trump is pushing for his replacement but an investigation into Powell may hold up the appointment of a new chair.

The Justice Department opened an investigation into Powell over the renovation of the Marriner S. Eccles Federal Reserve Board Building in Washington, D.C., which Trump claims has exceeded $3 billion. The renovation was not the beginning of Trump’s feud with Powell but it has added to his effort to oust the chairman before the end of his term.

Powell’s term as chairman of the Federal Reserve will end in May but he will remain on the Board of Governors until January 2028.

Typically when a Fed chair’s term ends, they resign. However, Powell said he plans to stay put until a replacement is appointed.

At least one lawmaker, Sen. Thom Tillis, R-N.C., said he would not vote on a new chairman until the investigation into Powell is over.

The Justice Department alleges that Powell made false or misleading statements to Congress about the cost of the renovation project at the Federal Reserve headquarters during his testimony to the House Committee on Financial Services in June.

Powell’s testimony was part of his semiannual report to Congress on monetary policy.

Following the hearing, Rep. Anna Paulina Luna, R-Fla., submitted a request to then-Attorney General Pam Bondi for Powell to be investigated for perjury and making false statements. Luna said that Powell denied there would be “luxury features” included in the renovations, including a “VIP dining room, premium marble, water features and a roof terrace garden.”

Luna added that Powell “falsely claimed that the Eccles building ‘never had’ a serious renovation.” She notes that the building underwent renovations in 1999 and 2003.

“These are not minor misstatements,” Luna said. “Chairman Powell knowingly misled both Congress and executive branch officials about the true nature of a taxpayer-funded project. Lying under oath is a serious offense — especially from someone tasked with overseeing our monetary system and public trust.”

No charges have been formally filed against Powell. The challenge the Justice Department faces in convicting Powell of perjury or false statements is in proving that he willfully, knowingly made statements he knew to be false at the time.

Powell, who was Trump’s nominee for chairman in 2017, has said that the investigation into him and the Federal Reserve renovation is “pretext” to punish him for not following Trump’s direction to lower interest rates.

“No one, certainly not the chair of the Federal Reserve, is above the law, but this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure,” Powell said in a video message in January. “This is about whether the Feed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation.”

Last month, federal prosecutor George A. Massucco-LaTaif told Chief U.S. District Judge James E. Boasberg that the Justice Department does not know of any evidence that a crime has been committed in the Federal Reserve renovation project.

“We do not know at this time,” Massucco-LaTaif said. “However, there are 1.2 billion reasons for us to look into it.”

The fissure between Powell and Trump began and has continued over the Federal Reserve’s decision to maintain elevated interest rates in response to inflation. Trump has repeatedly called on the Federal Reserve to lower interest rates, saying the United States should “have the lowest interest rate in the world.”

All along the Federal Reserve continues to hold an elevated interest rate, currently between 3.5% and 3.75%, in an effort to tame inflation. Its target rate of inflation is 2% on an annual basis.

Economic markers from the U.S. Bureau of Labor statistics show the rate of inflation remains at about 3%.

Trump has nominated Kevin Warsh to succeed Powell. Warsh served on the Fed’s board for five years after being appointed by President George W. Bush in 2006.

“I have known Kevin for a long period of time, and have no doubt that he will go down as one of the great Fed chairmen, maybe the best,” Trump posted on social media in January. “On top of everything else, he is ‘central casting,’ and he will never let you down.”

Warsh faced his first hearing on the path toward confirmation on Tuesday when he testified before the Senate Banking Committee. Questions by senators centered on the Federal Reserve’s independence, something Trump’s influence has called into question.

If appointed, Warsh would be the wealthiest person to lead the Federal Reserve.

Presidents have butted heads with the Federal Reserve throughout its history, as monetary policy can reflect on how the U.S. population views the president’s performance. A president has never tried to fire the chairman of the Federal Reserve.

The Federal Reserve is a non-partisan, independent agency made up of a board of governors posted in Washington, D.C., and 12 regional banks located across the United States.

Independence is key to the Federal Reserve’s function, keeping it from choosing policy based on the political goals of those occupying the White House and other branches of government.

Trump has not attempted to fire Powell yet but he did attempt to fire Fed board Gov. Lisa Cook. The attempt was unsuccessful as the U.S. Supreme Court intervened in October and ruled that she can remain at her post on an interim basis, at least for 2026.

The president does have some authority over choosing or designating a new Federal Reserve chair, Peter Shane, a constitutional law scholar in residence at NYU Law School, told UPI. However, a president must demonstrate a good reason for doing so.

There are two mechanisms in place that are meant to protect the independence of the Federal Reserve and its chair from political influence.

First, there is Supreme Court precedent. In 1935, the high court made a ruling in the landmark case Humphrey’s Executor vs. the United States. In this case, the court ruled that President Franklin D. Roosevelt could not fire the commissioner of the Federal Trade Commission, another independent agency, without cause.

The ruling affirmed that the authority to remove the head of any independent agency falls to Congress.

Second, there is the Federal Reserve Act. President Woodrow Wilson signed the Federal Reserve Act of 1913 to decentralize the control over monetary policy in the United States. This established the Federal Reserve and set its independence as a foundational feature of its existence.

The Federal Reserve Act makes the Federal Reserve independent in setting monetary policy without the influence of the president or Congress.

Congress has the ability to change the Federal Reserve Act. It did so in 1977 with the Federal Reserve Reform Act.

This amendment, signed into law by President Jimmy Carter, codified the objectives of the agency and established a requirement for the board of governors to report to Congress in hearings twice a year. It also added the requirement of Senate confirmation hearings for the chairman and vice chairman of the board of governors.

Last year, Rep. Thomas Massie, R-Ky., introduced the Federal Reserve Board Abolition Act, calling for the board of governors of the Federal Reserve and all Federal Reserve banks to be abolished.

“Americans have suffered under crippling inflation and the Federal Reserve is to blame,” Massie said in a statement.

Since being introduced in March 2025 the bill has not progressed beyond being referred to the House Committee on Financial Services.

Kevin Warsh, the man nominated to lead the Federal Reserve, the world’s most important financial institution, told the US Senate Banking Committee on Tuesday that he had made no secret agreements with the White House over interest rate policy, defending his professional integrity.

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He said he would act independently if confirmed to succeed Jerome Powell, despite continued public pressure from US President Donald Trump for lower borrowing costs.

The question of that independence was put sharply to him during the hearing, when Republican Senator John Kennedy asked whether he would be Trump’s “human sock puppet”. Warsh replied: “Absolutely not.”

His comments came amid broader concerns on Capitol Hill about the future direction of the central bank, with lawmakers divided over his past record and approach to monetary policy.

Warsh insisted that the President had never asked him to commit to any specific interest rate path and said he would not have agreed to such a request.

The hearing highlighted the significant pressure facing the Federal Reserve as it maintains its independence while addressing inflation, which remains at 3.3%.

Just hours before the session began, US President Donald Trump stated in a CNBC interview that he would be disappointed if Warsh did not immediately implement rate cuts.

This current friction suggests that the White House may struggle to secure the necessary votes to confirm Warsh before Powell’s term as Fed Chair expires on 15 May.

Democratic opposition and Republican dissent

Democratic senators were particularly vocal in their scepticism, accusing Warsh of shifting his economic stance to suit the political climate.

US Senator Elizabeth Warren labelled the nominee a “sock puppet”, suggesting his installation would facilitate an “illegal takeover” of the institution.

Critics also pointed to his historical record, alleging that he favoured higher rates during Democratic administrations but has become more dovish under Republican leadership.

US Senator Ruben Gallego cited reporting from the Wall Street Journal (WSJ), which claimed the President had previously urged Warsh to reduce borrowing costs. Warsh responded by stating that such reports were based on inaccurate sources and reiterated that the independence of the Fed is “essential” for economic stability.

Despite Trump’s backing, the nomination also faces a critical roadblock within the Republican Party.

US Senator Thom Tillis, a Republican from North Carolina, reiterated his refusal to support Warsh as long as a Department of Justice investigation into Jerome Powell continues.

The probe, led by Assistant US Attorney Jeannine Pirro, is examining whether Powell committed perjury during testimony last year regarding the budget of a Federal Reserve building renovation project.

Tillis and other Republican colleagues have expressed their support for Powell, arguing that the investigation is meritless. According to Tillis, he will not vote for a successor until the “investigation is dropped,” a stance that effectively freezes the nomination in a closely divided committee.

Federal prosecutors have reportedly continued their efforts to access Fed records as recently as last week, even after a judge previously found no evidence to support the charges.

Legal and ethical hurdles

The proceedings also delved into Warsh’s personal financial interests and the logistical challenges of a potential leadership transition.

US Senator Elizabeth Warren raised questions about the nominee’s investments in private entities, including SpaceX and Polymarket, noting that the specific size of these holdings had not been fully disclosed to the public.

Warsh defended his position by stating that the Office of Government Ethics has already approved his plan to divest all assets within 90 days of his confirmation.

Compounding the uncertainty is the unique situation involving Jerome Powell.

Unlike most departing Chairs, Powell has indicated he intends to remain on the Federal Reserve’s governing board until his separate term ends in 2028, or until the perjury investigation is concluded.

This could create an awkward power dynamic where the former Chair sits alongside his successor, a scenario not seen in Washington since the late 1940s.

While US President Donald Trump has threatened to remove Powell from the board entirely, legal experts suggest such a move would be difficult, particularly given recent US Supreme Court precedents relating to the protection of Fed governors from political dismissal.

April 15 (UPI) — President Donald Trump again threatened to fire Federal Reserve Chair Jerome Powell if he doesn’t step down from his position in May.

“Then I’ll have to fire him,” the president said on Fox Business. “If he’s not leaving on time — I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial. I want to be uncontroversial.”

Powell’s term as chair ends on May 15 and Trump does not have the authority to fire him without cause. But his nominated replacement, Kevin Warsh, hasn’t been confirmed by the Senate. If he doesn’t get confirmed, Powell could stay on as chair pro tempore.

“That’s what the law calls for. That’s what we’ve done on several occasions,” Powell said.

He said he plans to stay on the board.

“I have no intention of leaving the board until the investigation is well and truly over with transparency and finality,” Powell said.

The Senate Banking Committee is scheduled to have hearings on Warsh’s nomination on April 21.

Powell’s term as a Fed governor goes until 2028, but he said he hasn’t decided if he’ll serve out that term.

Complicating matters, the Trump administration has been trying to prosecute Powell for his role in the $2.5 billion renovation of the Fed headquarters. The building went far over budget, and Trump has implied that something illegal is happening.

U.S. attorney for the District of Columbia Jeanine Pirro tried to subpoena Powell over the renovation, but a judge denied it. Pirro admitted she had no evidence.

Sen. Thom Tillis, R-S.C., who is on the Senate Banking Committee, said he will continue to block Warsh’s confirmation until the investigation into Powell ends.

But Trump said he isn’t worried about Tillis.

Tillis “is an American; he knows what to do,” he said.

Trump said the investigation must happen.

“What they’ve done to that, so it is probably corrupt, but what it really is is incompetent, and we have to show the incompetence of that,” he said.

Trump has wanted Powell out of the Fed since he was elected to office for the second term. He has said he wants interest rates dropped, but Powell has taken a more conservative approach. Powell has lowered the rates, but not fast enough for the president.

“Does that mean we stop a probe of a building that I would have done for $25 million that’s going to cost maybe $4 billion? Don’t you think we have to find out what happened there?” Trump said in the interview at the White House. “I have to find out.”

He called Powell “a disaster.”

“Here’s a man who took this little, tiny building and a couple of other little, tiny complex, and he’s spending more than $3 billion. I want to know who the contractor is, because that contractor is making billions of dollars, perhaps.”

The Fed said the building’s cost overruns are due to “unforeseen conditions” requiring more spending, including “more asbestos than anticipated, toxic contamination in soil, and a higher-than-expected water table.”

Trump has also tried to oust Fed governor Lisa Cook on the allegation that she committed mortgage fraud.