· 3 min read
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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