Inflation

New York City, United States – For 14 years, BC Dodge built a career telling other people’s stories as a marketing and communications professional in the nonprofit sector in the Washington, DC area in the United States. But in late 2024, that stable career hit a speed bump.

He was laid off from his job amid a round of restructuring. The news landed without warning. One day he had a job, and the next he was sitting at home, staring at the numbers, trying to figure out how to keep paying the mortgage and putting food on the table.

He is married, and his partner is a teacher, but the math did not work. One salary might cover things for a little while, but not long enough to maintain long-term stability.

So he started applying for new work immediately. Over three months, he submitted 350 job applications. He got six interviews.

After months of searching, something moved.

He advanced in the hiring process for a Washington, DC–based nonprofit, making it far enough to sit across from senior leadership. It felt like he finally caught a break.

Then the ground shifted again. As Dodge was interviewing for a new job, Elon Musk, the world’s richest man, was advising the administration of US President Donald Trump on how to shrink the federal government, and that meant cutting funding to agencies that provide contracts and funds to swaths of nonprofit organisations around the country. The effects rippled outward, and Dodge was caught in the crosshairs.

Contracts were cancelled and funding streams dried up. Nonprofits that depend on government support had to pull back and scale down ambitions — those very same nonprofits from whom Dodge sought employment.

“I got a call from HR saying they weren’t going to hire for the position, and that all hiring was on hold. I couldn’t argue with them, because I’d been hearing the same thing from organisations I’d spoken to since I started applying. ‘We were relying on federal funds, and now they’re gone,’” Dodge said.

Then it was back to the drawing board. He began searching yet again, but this time with a cloud of uncertainty looming over the entire industry he works in. Dodge finally took what he could get — part-time work in his field. The pay was well below what he had been earning before, but he accepted it anyway. Some income, he reasoned, was better than none.

The result is underemployment. Underemployment can manifest in several ways, often when workers are seeking full-time work but can only find part-time positions, or when the jobs they work do not fully utilise their skills and training. It is generally associated with industries like restaurants or retail, but it also reaches into fields with fewer resources and shrinking opportunities, including the nonprofit sector, where jobs are increasingly precarious and full-time stability is harder to find because of the wave of government funding cuts in 2025.

The upshot is lower incomes for underemployed workers, sometimes below the cost of living or even pushing them into the ranks of the working poor.

Underemployment has been on the rise, according to the Economic Policy Institute, which has tracked the rate of underemployment since 1978. Today, 8 percent of the US population is underemployed, up 0.5 percent from 2024 and it is up 1.1 percent from 2023.

At the same time, many in the US are seeing their expenses increase.

The impact of tariffs has hit low-to-middle-income earners harder than others. Analysis from the Yale Budget Lab found that lower-income households are paying a higher percentage of their post-tax income on goods subject to tariffs as opposed to higher-income households, all while costs for necessities like healthcare are increasing.

Earlier this year, Congressional leaders failed to extend Affordable Care Act subsidies. Premiums increased by an average of 144 percent, according to analysis from the Kaiser Family Foundation.

“Some people have lost their jobs and found new ones that pay less, but others have kept their jobs, but their healthcare premiums have increased. Their electric bills have also gone up. Their salaries no longer cover basic living costs,” Jillian Hishaw, a personal bankruptcy lawyer in Charlotte, North Carolina, said.

She said that because of increased costs like these and a stalling job market, she is seeing an increase in inquiries about personal bankruptcy filings in efforts by potential clients not to lose their homes to foreclosure.

“In one day last week, 85 foreclosures were filed in Mecklenburg County [where Charlotte is located]. Foreclosures happen daily, but 85 in a single day is unusually high. Two years ago, the daily average was 10 to 20, but now filings are approaching triple digits each day,” Hishaw said.

Shrinking options

The surging economic pressures hit workers across various sectors, including financial and administrative services. An Ohio-based accountant who did not want his name to be published, has worked a patchwork of accounting and administrative jobs over the past few years. In March, he was laid off from a research organisation in central Ohio.

After months of searching, he found new work, but not as an accountant, and the pay falls far short of covering his cost of living.

“I’m working as a sales coordinator, which I really don’t want to be doing, but it was the only thing I could land with how bad things are. It’s not enough to live on,” he said.

The labour market is under strain. Layoffs reached more than 1.1 million in 2025, according to Challenger, Gray & Christmas, while job creation failed to keep pace, with just 584,000 jobs added. As a result, more workers are settling for underpaid or part-time work that does not meet basic living expenses, including Dodge and the accountant.

Michele Evermore, senior fellow at the National Academy of Social Insurance, says that economic uncertainty driven by tariffs and developments in artificial intelligence has put businesses across a wide set of sectors essentially on pause — maintaining the status quo or scaling back.

“People who are already at the margins are getting kicked out entirely, and that’s placing pressure on everyone who is clinging to a job,” Evermore told Al Jazeera.

In January, one of the key measures of underemployment, the number of people who work part-time for economic reasons, such as an inability to find full-time work or had their hours reduced, hit 4.9 million. It was a 453,000 decline from the month before, but is up 410,000 from this time last year, according to the January jobs report released by the Bureau of Labor Statistics on Wednesday.

Long-term unemployment jumped 386,000 from this time a year ago to 1.8 million, although it remains unchanged compared with the previous month.

The nonprofit sector has been hit particularly hard in the last year, losing 28,729 jobs in 2025, up sharply from 5,640 losses the year before, according to Challenger, Gray & Christmas.

Like the Ohio accountant, Dodge has been searching for new opportunities since he lost his full-time role a year and a half ago. He has applied for 460 jobs and only landed a handful of interviews.

Working weekends, washing dishes

The market is only getting tighter. US employers cut more than 108,000 jobs in January, while employers only announced intentions to hire 5,300 new roles for the month, the lowest on record since Challenger, Gray & Christmas started tracking that in 2009.

“Employers aren’t wanting to make any big investments right now, including increasing salaries to their workforce,” Evermore, who served as a policy adviser in the US Labor Department during the administration of former US President Joe Biden, added.

In December, labour market turnover remained stagnant. Amid economic uncertainty and a slowdown in new job growth, many Americans are hanging on to the jobs they already have. Job openings fell to 6.5 million, down 386,000 from the previous month, according to the Bureau of Labor Statistics’ Job Openings and Labour Turnover Survey (JOLTS).

Hiring and separations, which include layoffs and firings, were unchanged. That followed November’s report, which similarly showed little movement in both new hiring and the number of workers leaving their jobs.

Combined, that means that for the underemployed, finding a new role, either part-time to augment their existing income, or to replace it altogether, is increasingly difficult for people like the accountant.

“I’m also working weekends at a friend’s cafe, washing dishes, and I’m still applying and interviewing for other opportunities. But it’s the same story, no offers. At the same time, I’m debating whether to switch professions or even go back to school, even though I already have a master’s degree,” he said.

That shared distress has also created an unlikely sense of camaraderie among those struggling to get by, even as the outlook remains bleak.

Dodge finds it in late-night scrolls through Reddit, watching strangers narrate versions of the same stalled search.

“I doomscroll a lot,” he said, “getting depressed about the state of politics and the global economy, and taking some solace in knowing I’m not the only one struggling to find viable employment after 12, 13, 14, even 15 months.”

For now, that recognition of others stuck in the same place, hitting the same walls, is enough to keep him moving forward, submitting applications and waiting for a response that might not even come.

The nonpartisan Congressional Budget Office’s 10-year outlook projects worsening long-term United States federal deficits and rising debt, driven largely by increased spending, notably on Social Security, Medicare, and debt service payments.

Compared with the CBO’s analysis this time last year, the fiscal outlook, which was released on Wednesday, has deteriorated modestly.

The CBO said that the deficit for fiscal 2026 – President Donald Trump’s first full fiscal year in office – will be about 5.8 percent of GDP, about where it was in fiscal 2025, when the deficit was $1.775 trillion.

But the US deficit-to-GDP ratio will average 6.1 percent over the next decade, reaching 6.7 percent in fiscal 2036 – far above US Treasury Secretary Scott Bessent’s goal to shrink it to about 3 percent of economic output.

Major developments over the last year are factored into the latest report, including Republicans’ tax and spending measure known as the “One Big Beautiful Bill Act,” higher tariffs, and the Trump administration’s crackdown on immigration, which includes deporting millions of immigrants from the US mainland.

As a result of these changes, the projected 2026 deficit is about $100bn higher, and total deficits from 2026 to 2035 are $1.4 trillion larger, while debt held by the public is projected to rise from 101 percent of GDP to 120 percent — exceeding historical highs.

Notably, the CBO says higher tariffs partially offset some of those increases by raising federal revenue by $3 trillion, but that also comes with higher inflation from 2026 to 2029.

Rising debt and debt service are important because repaying investors for borrowed money crowds out government spending on basic needs such as roads, infrastructure and education, which enable investments in future economic growth.

CBO projections also indicate that inflation does not hit the Federal Reserve’s 2 percent target rate until 2030.

A major difference is that the CBO forecasts rely on significantly lower economic growth projections than the Trump administration, pegging 2026 real GDP growth at 2.2 percent on a fourth-quarter comparison basis, fading to an average of about 1.8 percent for the rest of the decade.

Trump administration officials in recent weeks have projected robust growth in the 3-4 percent range for 2026, with recent predictions that first-quarter growth could top 6 percent amid rising investments in factories and artificial intelligence data centres.

CBO’s forecasts assume that tax and spending laws and tariff policies in early December remain in place for a decade. The government’s fiscal year starts on October 1.

While revived investment tax incentives and bigger individual tax refunds provide a boost in 2026, the CBO said that this is attenuated by the drag from larger fiscal deficits and reduced immigration that slows the growth of the labour force.

Jonathan Burks, executive vice president of economic and health policy at the Bipartisan Policy Center said “large deficits are unprecedented for a growing, peacetime economy”, though “the good news is there is still time for policymakers to correct course.”

‘Urgent warning’

Lawmakers have recently addressed rising federal debt and deficits primarily through targeted spending caps and debt limit suspensions, as well as deploying “extraordinary measures” when the US is close to hitting its statutory spending limit, though these measures have often been accompanied by new, large-scale spending or tax policies that maintain high deficit levels.

And Trump, at the start of his second term, deployed a new “Department of Government Efficiency”, which set a goal to balance the budget by cutting $2 trillion in waste, fraud and abuse; however, budget analysts estimate that DOGE cut anywhere between $1.4bn to $7bn, largely through workforce firings.

Michael Peterson, CEO of the Peterson Foundation, said the CBO’s latest budget projection “is an urgent warning to our leaders about America’s costly fiscal path.”

“This election year, voters understand the connection between rising debt and their personal economic condition. And the financial markets are watching. Stabilising our debt is an essential part of improving affordability, and must be a core component of the 2026 campaign conversation.”

WALKING back from her daily shop Beth Maitland, 32, isn’t worried about traffic jams, beeping horns or the cost-of-living crisis.

She’s more concerned about a local elephant trying to steal her bag of fruit.

It’s Beth’s ‘new normal’ since fleeing Britain over twelve months ago to begin her new life in Thailand, where rent is a fifth of the price, a dinner out costs just two quid, her front garden is a beach and her backyard rice paddies overlooked by a mountain range.

Thailand is routinely voted one of the top twelve destinations for Brit tourists where the pound goes a long way.

It’s estimated 55,000 Brits, from backpackers to retirees, have chosen to bail out of Britain, trading cold, gloomy weather for the tropical paradise and beaches known as the Land of Smiles.

Relocations have soared by a staggering 255 per cent since 2018, driven by Thailand’s Long-Term Residence or LTR visa which offers 10-year residency with tax exemption.

Beth, a former NHS maternity support staffer moved from Plymouth, Devon to the island oasis of Koh Samui in southern Thailand in March last year.

Talking exclusively to The Sun, Beth revealed: “I rent a two-bedroom cottage in the jungle, there are rice fields on one side, jungle on the other and it’s 15 minutes to the beach. From the roof I can check out the surf or plan a mountain hike in the other direction.

“If I paid the price I was paying in the UK, which was £700 for a studio flat in Plymouth, I could get a four-bedroom house with five bathrooms, a pool and a garden on the island’s outskirts with elephants as neighbours.

“The first month converting pounds to Thai currency – the Baht – was a nightmare and so was finding the perfect place to live. 

“Now it’s like I have lived here all my life. I am always shocked at how cheap food, accommodation and transport is compared to Britain. 

“The cost of living is so cheap I eat out for lunch and dinner every day. I haven’t had a ready meal since I moved here.

“Everything except British food is cheaper. For the first time in a decade, I feel I have a positive future, can buy a home, and achieve my career goals.”

Millennial Beth grew up in Plymouth and loved surfing in the summer months when the weather was good enough. 

She spent the next seven years working twelve-hour shifts as a nursing home assistant in Exeter before spending six months backpacking in Australia and Asia.

“I felt inspired by the Asian culture but thought I’d never be able to work or move there.

“I came back home in December 2019 to miserable winter weather and started work as an NHS maternity support staffer.”

Brighter future

When Covid hit, Beth says she found herself re-examining her life.

“Working during lockdown for the NHS was a privilege but it took its toll. I lost friends and patients.”

When the cost-of-living crisis hit Beth felt overwhelmed by work and a feeling her future wouldn’t be the one she wanted if she stayed in Britain.

“After rent and bills were paid, I was saving no money at all. When I hit 30, I knew if I didn’t act, I’d been in the same place with no savings when I hit 40. I couldn’t let history repeat.

“The government wasn’t offering young people like me hope. My friends could only buy a house if their parents helped.

“Other friends were marrying and having children admitting that they felt the goals they wanted for their twenties were no longer possible.”

It was when two of her close friends left to become digital nomads in Thailand and Bali in January 2024 Beth was inspired to act, realising she had a choice – commit to miserable weather, rising prices and a job in the NHS which wasn’t offering career development, or take a gamble, pursue a new career and move to Asia herself.

“Many of my work colleagues were shocked,” she says. “They couldn’t comprehend moving overseas, let alone to Thailand.

“It was terrifying and exciting for me but having friends living and working there already kept me going.” 

Beth isn’t the only millennial making the life-changing decision to flee to a new country instead of settling down and concentrating on their career here.

I sometimes think I have a career and life whiplash at the speed and dramatic change which occurred

Beth

The Currencies Direct’s British Expat Report 2024 revealed nearly 40 per cent of Brits are considering moving overseas due to the cost of living while a fifth, like Beth, feel a fresh start in another culture would be beneficial for their wellbeing and mental health.

And it’s the young who are leading the great British brain drain, and more than a third of people under 24 are planning to leave Britain in the next five years. 

Dramatic change

After a tip from a friend based in Thailand, Beth applied online as a full-time travel manager running group tours.

Just two Zoom interviews later and she was offered the job and within two months was living and working in Thailand.

Beth says even she was shocked by how quickly her life changed.

“I sometimes think I have a career and life whiplash at the speed and dramatic change which occurred.”

She explains: “I used to work part-time at holiday camps during my teenage years. As a maternity support worker, I was good at helping people before, during and after labour with all ranges of problems. 

Now two weeks of every month Beth travels with 30 holiday makers, overseeing their organised tour of Thailand’s islands and regional areas.

“Imagine running a creche on wheels for people of all ages and from all different countries on their first overseas holiday. I love it,” she says. 

“There is never a dull moment. People want to know if we are there yet, where the meet up point is, what the Wi-Fi code is, if they need sunblock, can they borrow a charger and when we are stopping for food. Or the loo.

“I must be a mother, nurse and organiser. I tell people making kittens and squirrels walk in a straight line is often easier.”

Beth then gets two weeks off and either spends time at her rented cottage or using it as a base to travel to other Asian countries.

She pays £150 a month rent for the two-bedroom countryside cottage which includes her water, electricity and air conditioning, as well as use of communal pool and gym.

“There are ten cottages and it’s full of long-term Brits based here. My phone bill is £20 a month and I share it with a friend.”

Beth says she now rarely cooks because the price of food at local restaurants and roadside food carts is so cheap.

My diet has improved dramatically. I haven’t had a microwave meal since I moved here. It’s fresh fruit and vegetables every day

Beth

“I have fruit or cereal for breakfast. I eat lunch and dinner out. It costs £2 for lunch or £3 for dinner. I usually grab stir fry, curry, Thai soup or rice dishes as well as a dessert, usually a sorbet, fruit platter or ice-cream.

“My diet has improved dramatically. I haven’t had a microwave meal since I moved here. It’s fresh fruit and vegetables every day.”

Cheap living

Grocery shopping isn’t the weekly trek to the supermarket like it is in Britain.

“I go to the local markets and buy bags of fruit and fresh meat if I plan to cook, which isn’t often.

“A pint of milk costs the equivalent of 56p, a large loaf of white bread is around 90p, a dozen eggs are 90p, a half a kilo of red meat is £7, chicken is just £1.85 a kilo. Cheese is the most expensive item costing £7 to £8 for half a kilo.”

Beth admits she does miss her British staples and those that are available come at a price.

“HP sauce costs £6 a bottle, Heinz Baked Beans are an eye watering £4.50 while a Lindt chocolate bar sets you back a fiver,” she says.

“I usually grab bread, milk, some cheese and a huge bag of vegetables and fruit for a fiver. Fortunately, good quality tea bags only cost £1 for a box here.”

Beth says wine is expensive costing £12 to £15 a bottle but local beers cost £1-£1.20 for a half litre bottle and cocktails are between £2 and £3.50, depending on the spirits you choose.

“If you go to a five-star hotel you will pay more. 

“Gym membership is £22 a month and a trip to a foreign cinema is £5.60 if you are missing home.

“I had to hunt down a good cafe for a cappuccino and it costs £1.70 for a catch up with my mates. I was paying £5.60 for a posh coffee at Starbucks in the UK, I can’t believe it.”

Beth says she doesn’t need a car and uses the local car or bike service called ‘Grab’, which is similar to Uber, to book travel online.

“A bike, which means I am a pillion passenger, is 50p and a taxi is around 78p a mile.

The standard of health care is better than Britain

Beth

“When I first moved here, I refused to use the motorbike ‘cab’ – now it’s second nature.

“If you do own or rent a car it costs 96p a litre to fill up the tank. A new Toyota Corolla sedan costs on average £19k new.”

Beth says if you have children private preschool starts at £275 a month per child and the private international primary school begins at £4,500 a year.

“I was stunned by the brilliant quality of healthcare available here in Thailand. When there was no delay to see a dentist or doctor I was gobsmacked. 

“The standard of health care is better than Britain.” 

Beth recently paid £50 to see a dental hygienist and £150 for a tooth extraction and filling. Back home I’d either be forced to wait one or two years to get an NHS dentist or pay more than £500 plus for the dental work.

Dinner splurges

According to financial website livingcost.org, Britain is ranked as the 11th most expensive country in the world while Thailand is the 114th most expensive.

Beth told us: “The cost of living is a lot cheaper – from shopping, to petrol, accommodation to food.

“If my friends and I went out for a splurge dinner, that costs us around a tenner for food and drinks all night plus the cab home.”

Beth usually buys her clothes at the local market but if she wants a retail hit H&M have stores in Thailand.

“If it gets hot, I peel off a layer. It can get cold during the equivalent of the winter months, and I pop on a sweater.

“It’s the wet season that causes problems but you learn to keep umbrellas handy.”

According to Beth, Thailand is now extra popular on the backpacking must-visit list with marijuana being legalised.

I feel calmer, more centred, and less stressed living here than I did in Britain

Beth

“Holiday makers are often shocked that pot cafes exist and pot is legally sold here,” she said.

Many of my thirty-something friends are moving here because Thailand is well known for its amazing spiritual and mental health clinics and holidays.

“It’s a very spiritual country. For people in their thirties moving here often means setting up wellbeing businesses or mediation and other fitness styled retreats.

“I feel calmer, more centred, and less stressed living here than I did in Britain,” she said.

“Everyone is meditating or trying a new yoga or healthy living trend.

“It’s a way many Brits not only embrace a new way of living, but a new career counselling or operating healing centres others move here to set up online businesses.”

Beth loves her new career path and says she is saving to buy a property on Koh Samui. 

“You can spend £70k for a basic three-bedroom apartment with four bathrooms, a communal pool and a countryside view. 

“When you consider that wouldn’t get me a static caravan in Britain it’s a brilliant option.”

Beth admits she misses her family and friends.

“I was homesick for the first six weeks. I try to come back to Britain once or twice a year.

“Once you make a few friends, join the various social media groups for expats and get yourself into a routine it becomes a new normal.

“I have hope again. I thought I would never feel this way. It turns out sun, surf and wrangling tourists is the perfect tonic.”

WASHINGTON — President Donald Trump said Friday that he will nominate former Federal Reserve official Kevin Warsh to be the next chair of the Fed, a pick likely to result in sharp changes to the powerful agency that could bring it closer to the White House and reduce its longtime independence from day-to-day politics.

Warsh would replace current chair Jerome Powell when his term expires in May. Trump chose Powell to lead the Fed in 2017 but this year has relentlessly assailed him for not cutting interest rates quickly enough.

“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 his Truth Social site. “On top of everything else, he is ‘central casting,’ and he will never let you down.”

The appointment, which requires Senate confirmation, amounts to a return trip for Warsh, 55, who was a member of the Fed’s board from 2006 to 2011. He was the youngest governor in history when he was appointed at age 35. He is currently a fellow at the right-leaning Hoover Institution and a lecturer at the Stanford Graduate School of Business.

In some ways, Warsh is an unlikely choice for the Republican president because he has long been a hawk in Fed parlance, or someone who typically supports higher interest rates to control inflation. Trump has said the Fed’s key rate should be as low as 1%, far below its current level of about 3.6%, a stance few economists endorse.

During his time as governor, Warsh objected to some of the low-interest rate policies that the Fed pursued during and after the 2008-09 Great Recession. He also often expressed concern at that time that inflation would soon accelerate, even though it remained at rock-bottom levels for many years after that recession ended.

But more recently, however, in speeches and opinion columns, Warsh has said he supports lower rates.

Controlling the Fed

Warsh’s appointment would be a major step toward Trump asserting more control over the Fed, one of the few remaining independent federal agencies. While all presidents influence Fed policy through appointments, Trump’s rhetorical attacks on the central bank have raised concerns about its status as an independent institution.

The announcement comes after an extended and unusually public search that underscored the importance of the decision to Trump and the potential impact it could have on the economy. The chair of the Federal Reserve is one of the most powerful economic officials in the world, tasked with combating inflation in the United States while also supporting maximum employment. The Fed is also the nation’s top banking regulator.

The Fed’s rate decisions, over time, influence borrowing costs throughout the economy, including for mortgages, car loans and credit cards.

For now, Warsh would fill a seat on the Fed’s governing board that was temporarily occupied by Stephen Miran, a White House adviser who Trump appointed in September. Once on the board, Trump could then elevate Warsh to the chair position when Powell’s term ends in May.

Trump’s economic policies

Since Trump’s reelection, Warsh has expressed support for the president’s economic policies, despite a history as a more conventional, pro-free trade Republican.

In a January 2025 column in The Wall Street Journal, Warsh wrote that “the Trump administration’s strong deregulatory policies, if implemented, would be disinflationary. Cutbacks in government spending — inspired by the Department of Government Efficiency — would also materially reduce inflationary pressures.” Lower inflation would allow the Fed to deliver the rate cuts the president wants.

Since his first term, Trump has broken with several decades of precedent under which presidents have avoided publicly calling for rate cuts, out of respect for the Fed’s status as an independent agency.

Trump has also sought to exert more control over the Fed. In August he tried to fire Lisa Cook, one of seven governors on the Fed’s board, in an effort to secure a majority of the board. He has appointed three other members, including two in his first term.

Cook, however, sued to keep her job, and the Supreme Court, in a hearing last week, appeared inclined to let her keep her job while her suit is resolved.

Economic research has found that independent central banks have better track records of controlling inflation. Elected officials, like Trump, often demand lower interest rates to juice growth and hiring, which can fuel higher prices.

Trump had said he would appoint a Fed chair who will cut interest rates, which he says will reduce the borrowing costs of the federal government’s huge $38 trillion debt pile. Trump also wants lower rates to boost moribund home sales, which have been held back partly by higher mortgage costs. Yet the Fed doesn’t directly set longer-term interest rates for things like home and car purchases.

Potential challenges and pushback

If confirmed by the Senate, Warsh would face challenges in pushing interest rates much lower. The chair is just one member of the Fed’s 19-person rate-setting committee, with 12 of those officials voting on each rate decision. The committee is already split between those worried about persistent inflation, who’d like to keep rates unchanged, and those who think that recent upticks in unemployment point to a stumbling economy that needs lower interest rates to bolster hiring.

Financial markets could also push back. If the Fed cuts its short-term rate too aggressively and is seen as doing so for political reasons, then Wall Street investors could sell Treasury bonds out of fear that inflation would rise. Such sales would push up longer-term interest rates, including mortgage rates, and backfire on Warsh.

Trump considered appointing Warsh as Fed chair during his first term, though ultimately he went with Powell. Warsh’s father-in-law is Ronald Lauder, heir to the Estee Lauder cosmetics fortune and a longtime donor and confidant of Trump’s.

Who is Warsh?

Prior to serving on the Fed’s board in 2006, Warsh was an economic aide in George W. Bush’s Republican administration and was an investment banker at Morgan Stanley.

Warsh worked closely with then-Chair Ben Bernanke in 2008-09 during the central bank’s efforts to combat the financial crisis and the Great Recession. Bernanke later wrote in his memoirs that Warsh was “one of my closest advisers and confidants” and added that his “political and markets savvy and many contacts on Wall Street would prove invaluable.”

Warsh, however, raised concerns in 2008, as the economy tumbled into a deep recession, that further interest rate cuts by the Fed could spur inflation. Yet even after the Fed cut its rate to nearly zero, inflation stayed low.

And he objected in meetings in 2011 to the Fed’s decision to purchase $600 billion of Treasury bonds, an effort to lower long-term interest rates, though he ultimately voted in favor of the decision at Bernanke’s behest.

In recent months, Warsh has become much more critical of the Fed, calling for “regime change” and assailing Powell for engaging on issues like climate change and diversity, equity and inclusion, which Warsh said are outside the Fed’s mandate.

His more critical approach suggests that if he does ascend to the position of chair, it would amount to a sharp transition at the Fed.

In a July interview on CNBC, Warsh said Fed policy “has been broken for quite a long time.”

“The central bank that sits there today is radically different than the central bank I joined in 2006,” he added. By allowing inflation to surge in 2021-22, the Fed “brought about the greatest mistake in macroeconomic policy in 45 years, that divided the country.”

Rugaber writes for the Associated Press.

Gold has risen more than 20% since the start of the year, surpassing the significant $5,500 milestone this week.

The precious metal’s rally, seen alongside a lift in commodities such as silver and platinum, is driven by a number of interlinking factors — including geopolitical tensions, rising government debt, and an uncertain outlook for interest rates and inflation.

Gold’s appeal is linked to the narrative that it is a safe haven asset, acting as a “hedge against inflation”. It typically increases in value when the dollar declines, it’s easily sold, and it’s also a tangible, finite commodity.

These factors are significant at a time when questions are being raised about the dollar, as well as fiat currencies like the Japanese yen. As government debt rises, so do fears around inflation and fiscal stability.

In the US, incendiary policies from the Trump administration are increasing market jitters around the health of the economy, prompting what some analysts view as a “sell America” trade. In recent weeks, the president has threatened to conquer Greenland, hinted at US intervention in Iran, sought to influence policy at the Federal Reserve, and launched an attack on Venezuela. To top that off, he’s also threatened more tariffs on trading partners, bringing back a well-worn tactic from 2025.

Although analysts argue that the dollar will not be unseated as the world’s reserve currency anytime soon, it seems investors are diversifying away from the greenback. The US’ next moves remain uncertain, and no one wants to be caught in the crosshairs. As an alternative to fiat currencies, gold may seem like a strong portfolio option.

“Investors previously bought US Treasuries as they were viewed as being quite risk-free. But especially because of the way that some wealth has been weaponised, certain countries are becoming more careful about how they allocate their capital,” said Simon Popple, managing director at Brookville Capital. “The dollar debasement helps the gold price,” he told Euronews.

Even so, Popple and other analysts stress that a major factor lifting the bullion price is far less complicated. As gold continues to make headlines, investors are caught up in the momentum, sparking a buying frenzy.

“People are naturally drawn to things they see moving and they’ve seen gold have an astonishing rally,” said Chris Beauchamp, chief market analyst at IG. “It’s bound to lead to an ignition of interest.”

He added that while gold has beneficial investment properties, the metal’s ability to hold its value is overstated, particularly in the short term. Gold’s position in the market notably shifted after former US president Richard Nixon decided to end direct dollar convertibility to gold in 1971. Put simply, countries no longer fixed their currencies to a specified amount of the precious metal.

“The gold standard is still invoked to suggest the metal is some kind of totemic asset we should have because it’s a fixed store of value. It’s not,” concluded Beauchamp.

Kenneth Lamont, a principal in Morningstar’s Manager Research Department, reiterated this message, also drawing comparisons between gold and crypto. While both are limited in supply, they are both “incredibly volatile”, he stressed.

“If you’re using either crypto or gold to buy something, it might be 30% less from one day to the next. It’s not actually a good store of value in the short term.”

While gold is much more established than bitcoin, and it has historically performed well over the long term, analysts stress that the unpredictability of both assets means the death knell is not yet ringing for fiat currencies.

Whether bullion’s price will continue to climb in the immediate future is a guessing game. Even so, given the precarious nature of global politics, it seems the metal may still have further to run.

Jan. 28 (Asia Today) — Jang Dong-hyuk, leader of South Korea’s People Power Party, sharply criticized the government’s consumption coupon policy Wednesday, arguing that cash handouts during a period of high inflation are worsening the strain on household finances.

Jang made the remarks during his first official appearance since ending a hunger strike, beginning with a price inspection at a retail site. Speaking at a field meeting held at the comprehensive situation room of the Korea Agro-Fisheries & Food Trade Corporation in Seoul’s Seocho district, he said excessive cash injections were one factor driving prices higher.

“Flooding the market with cash coupons, even as prices threaten the daily lives of ordinary citizens, is like giving only sugar water to a diabetic,” Jang said. “Ordinary people find happiness in ordinary meals. High prices destroy that everyday life. Ultimately, inflation is the root of many problems.”

He urged the government to prioritize price stability, especially ahead of the Lunar New Year holiday, and to focus on stabilizing supply and demand. “We will find answers on the ground where people live and work and bring them back to the National Assembly to shape policy,” he said.

Jang’s decision to start his schedule with a grassroots visit just two days after leaving the hospital was widely seen as an effort to underscore concern for household conditions amid volatility in exchange rates and prices.

Political observers expect Jang to step up criticism of the economic policies of the Lee Jae-myung administration. The People Power Party has argued that recent gains touted by the government, including record highs in stock indexes, have been driven largely by a semiconductor boom and have not eased the economic burden on ordinary households.

Party officials say the strategy is aimed at reframing the economic debate by emphasizing livelihoods and cost-of-living issues, while holding the government responsible for inflationary pressures. The push also comes ahead of the June 3 local elections, as the opposition seeks to broaden its appeal beyond its core supporters.

The People Power Party is considering launching a dedicated review body on livelihoods and the economy to scrutinize recent conditions and prepare alternative policy pledges. Party leaders say the goal is to strengthen its image as a party focused on price stability and support for small businesses and the self-employed.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260129010013249

The United States Federal Reserve is holding interest rates steady in its first rate decision of 2026.

Rates will remain at 3.5 to 3.75 percent, the Fed said on Wednesday, defying US President Donald Trump’s calls for more aggressive interest rate cuts.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated,” the central bank said in its release announcing the decision.

Wednesday’s decision was widely expected. CME FedWatch, a tool that tracks expectations for monetary policy, forecast a more than 97 percent chance that the central bank would hold rates steady.

The tracker also expects two rate cuts in 2026, with the highest probability for the first cut occurring in June at the earliest.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization,” the central bank said.

The decision comes amid signs of stabilisation in the US labour market. The US economy added 584,000 jobs in 2025, marking the lowest annual job growth since 2003. Payrolls rose by 64,000 jobs in October and 50,000 in December. While job growth remains weak, December’s figure represents a modest rebound from October, when the economy lost 105,000 jobs, according to the Bureau of Labor Statistics.

There are indications that the labour market may cool further in the months ahead. This week, both Amazon and UPS announced tens of thousands of job cuts, some of which were driven by a push towards increasing the use of artificial intelligence in the workplace.

Another threat to the US economy and the job market comes in the form of a looming government shutdown. That can happen as early as Saturday, and depending on its duration, it could slow spending as federal workers are temporarily left without paycheques.

Political tensions

The decision to hold interest rates steady comes despite Trump’s increased pressure on the central bank to cut rates. Fed Chairman Jerome Powell has long stressed the Federal Reserve’s independence, and Wednesday’s decision is the first since Powell’s rebuke of a criminal Department of Justice investigation into him. The central bank chair, whose term expires in May, called the inquiry a “pretext” to pressure him.

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said in remarks in early January in response to a subpoena.

Last week, the Supreme Court heard arguments in a case examining whether Trump has the legal authority to remove Fed Governor Lisa Cook amid allegations of mortgage fraud.

Meanwhile, Fed Governor Stephan Miran’s term is set to expire this week. Trump picked Miran to temporarily fill the seat vacated by Adriana Kugler in August while seeking a more permanent replacement.

Miran was one of two central bank governors who voted to lower interest rates alongside Christopher Waller.

The developments come as Trump searches for a new Fed chair. He has explicitly called for further interest rate cuts and for a chairman who shares his views.

“Anybody that disagrees with me will never be the Fed Chairman!” Trump said in a post on Truth Social in December.

The political pressure has caught the attention of global central banks as well.

“The Federal Reserve is the biggest, most important central bank in the world, and we all need it to work well. A loss of independence of the Fed would affect us all,” Bank of Canada Governor Tiff Macklem said on Wednesday. Canada’s central bank held rates steady ahead of the US central bank’s decision.

Macklem was one of the central bank heads who earlier this month issued a joint statement backing Powell. Last September, Macklem said Trump’s attempts to pressure the Fed were starting to hit markets.

The Dow Jones Industrial Average is flat, as is the Nasdaq, and the S&P 500 is down 0.1 in midday trading.

Carney has been under pressure from the opposition to lower prices of food and other essentials for lower-income people.

Canadian Prime Minister Mark Carney has announced a multibillion-dollar package as part of a series of measures aimed at lowering the costs of food and other essentials for low-income families.

On Monday, Carney announced a five-year 25 percent boost to the Goods and Services Tax (GST) credit that starts this year.

The GST credit, which is being renamed the Canada Groceries and Essentials Benefit, will provide additional, significant support for more than 12 million Canadians, Carney said in a statement.

The government will also provide a one-time top-up equivalent to a 50 percent increase this year to eligible residents.

“We’re bringing in new measures to lower costs and make sure Canadians have the support they need now,” Carney said.

The measures would cost the government 3.1 billion Canadian dollars ($2.26bn) in the first year and between 1.3 billion Canadian dollars ($950m) and 1.8 billion Canadian dollars ($1.3bn) in each of the following four years, he told reporters at a news conference, according to the Reuters news agency.

While overall consumer price inflation in Canada has eased and came in at 2.4 percent for December, “food price inflation remains high due to global and domestic factors, including supply chain disruptions, higher US tariffs from the trade war and climate change/extreme weather”, Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera.

The government is also setting aside 500 million Canadian dollars ($365m) from the Strategic Response Fund to help businesses address the costs of supply chain disruptions without passing those costs on to Canadians, and will create a 150 million Canadian dollar ($110m) Food Security Fund under the existing Regional Tariff Response Initiative for small and medium enterprises and the organisations that support them.

Changing landscape

“The global landscape is rapidly changing, leaving economies, businesses, and workers under a cloud of uncertainty. In response, Canada’s new government is focused on what we can control: building a stronger economy to make life more affordable for Canadians,” Carney said.

The new measures were unveiled on the day Parliament resumes after its winter break.

Opposition parties have urged Carney to reduce prices of daily goods, especially as sections of the economy have come under pressure from United States President Donald Trump, who has slapped 35 percent tariffs on the country as well as separate tariffs on steel, aluminium and lumber, leading to job losses in those sectors.

Over the weekend, Trump escalated his threats and said he would impose a 100 percent tariff on Canada if it makes a trade deal with China. Carney has been working on diversifying Canada’s exports away from the US, its biggest trading partner and to which nearly 80 percent of its exports went last year, including by increasing business with other markets like China.