Trump turns up the heat. Fed Chair Jerome Powell tries to keep his cool

illuminem summarises for you the essential news of the day. Read the full pieces on The Wall Street Journal or enjoy below:

🗞️ Driving the news: Federal Reserve Chair Jerome (Jay) Powell is facing an unusually aggressive pressure campaign from President Donald Trump and his allies, who accuse him of stalling on interest-rate cuts and have denounced him in harsh, even personal terms
• Simultaneously, Trump’s allies have called for the resignation of Fed Governor Lisa Cook amid unsubstantiated mortgage fraud allegations — raising concerns about political interference in the Fed

🔭 The context: The Federal Reserve has historically maintained its autonomy from political influence to preserve monetary policy credibility, dating back to challenges faced during the Nixon era onwards
• Despite the president’s power to appoint — and in theory remove — Fed officials, removal “for cause” remains legally constrained, especially for the Fed Chair
• Meanwhile, internal divisions within the Fed are growing: two governors recently dissented in favor of rate cuts, and Trump’s nominee Stephen Miran, if confirmed, could tip the balance further

🌍 Why it matters for the planet: Monetary policy has significant downstream impact on sustainable investments and climate-related financing
• Heightened political meddling risks undermining the Fed’s credibility and leading to unstable interest rates — complicating long-term planning for climate infrastructure and green innovation that require predictable financing environments

⏭️ What's next: All eyes are on Powell's speech at the Jackson Hole symposium, where he will likely restate the Fed's cautious stance amid market speculation of rate cuts in September
• If Trump's allies succeed in reshaping the Fed's board, the institution may lean toward looser policy—bringing economic growth ahead of inflation goals, but at the potential cost of long-term financial stability

💬 One quote: "I don’t comment on tariffs at all, actually. I comment only on inflation." – Powell responding to partisan criticism during congressional testimony

📈 One stat: Markets price in roughly an 83% chance of a rate cut at the Federal Reserve’s September meeting

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