Christopher Rugaber

Federal Reserve Chair Kevin Warsh faces growing pressure to raise interest rates as inflation remains above the Fed’s 2% target, while higher oil prices linked to renewed fighting involving Iran and possible tariff effects threaten to worsen price pressures. Warsh has used forceful language to promise price stability, lifting some borrowing costs, but officials and economists warn that markets may demand concrete action. Other indicators, including cooling core inflation, slower rent growth and previously falling gas prices, suggest inflation could ease. The central challenge is that war-driven energy price increases are largely beyond the Fed’s control, leaving uncertainty over whether tough rhetoric can prevent temporary price shocks from spreading through the broader economy.

U.S. companies signed about $60 billion in agreements and partnerships with Iraq, including Chevron deals to boost oil production and develop pipeline routes that could bypass the Strait of Hormuz. The agreements aim to improve Iraq’s access to global markets and reduce vulnerability to disruptions caused by the U.S.-Iran conflict, though major alternative pipelines would take years to build. Goldman Sachs estimates that regional pipelines under development could eventually carry about 60% of the oil previously shipped through the strait. In the meantime, some Iraqi oil is being trucked through Syria to the Baniyas port and onward to Europe, a costlier and less efficient route.

Federal Reserve Chair Kevin Warsh said the central bank has no tolerance for persistently high inflation and remains committed to restoring price stability, but he offered no indication of whether interest rates will rise. Inflation is running at 4.1%, well above the Fed’s 2% target, and policymakers are divided between favoring further hikes and holding rates steady or cutting them. Renewed conflict involving Iran has pushed oil and gasoline prices higher, while significant artificial-intelligence infrastructure spending by major technology companies is driving up demand for semiconductors and could add to inflationary pressure. Fed Governor Christopher Waller favored considering a near-term hike if inflation remains hot, whereas New York Fed President John Williams said steady core inflation could allow rates to remain unchanged.

US inflation was expected to fall in June, helped by lower gasoline prices, but renewed tensions between the United States and Iran pushed oil prices sharply higher and threatened to reverse that progress. Rising energy costs are already affecting airfares, diesel and shipping, while services inflation remains elevated. Federal Reserve officials are divided between waiting for inflation to cool and considering another rate hike if core prices remain high. Tariff-related price increases and strong demand for artificial-intelligence infrastructure add to the risks, although Walmart’s price cuts offer some limited relief.

A projected $720 billion investment by Alphabet, Amazon, Meta and Microsoft in AI data centers is driving up demand for semiconductors, computer equipment and electricity. Memory-chip prices could rise as much as 400% from 2024 levels, prompting Apple, Microsoft, Sony, Dell and HP to raise consumer-product prices. Economists estimate AI investment could add roughly half a percentage point to core inflation by year-end, while electricity costs may remain elevated through 2028 or longer. Federal Reserve officials are weighing whether these pressures are temporary or persistent enough to justify higher interest rates, despite expectations that AI could eventually improve productivity and reduce inflation.

Federal Reserve Chair Kevin Warsh has appointed co-leaders for five task forces intended to recommend changes to the central bank’s operations. Marc Andreessen, Microsoft executive Asha Sharma and Stanford economist Charles Jones will oversee work on artificial intelligence, productivity and jobs; Raj Chetty, former Walmart CEO Doug McMillon and economist Kevin Murphy will evaluate the Fed’s data sources; and Raghuram Rajan and Karen Dynan will examine the institution’s large balance sheet. The appointments include prominent economists, public officials and business leaders rather than prominent Fed critics, suggesting Warsh is seeking to build internal support for reforms rather than impose sweeping changes.

Federal Reserve officials remain sharply divided over whether to raise interest rates by the end of the year, with half of policymakers favoring a hike and others supporting unchanged rates or, in one case, a cut. Officials expect inflation to ease as gas prices fall and tariff effects fade, but many worry that strong investment in artificial-intelligence infrastructure will raise prices for semiconductors, computer equipment and electricity. Inflation reached 4.2% in May, while consumer expectations also increased, potentially reinforcing higher prices and wages. New Fed chair Kevin Warsh has emphasized returning inflation to the 2% target, offering little indication that the central bank will quickly lower borrowing costs.

Economists expect the US June jobs report to show about 100,000 new jobs and an unemployment rate near 4.3%, which would extend a recent recovery in hiring after weakness late last year and early this year. Stronger employment could support consumer spending, but inflation at 4.2% and rising gas prices are putting pressure on the Federal Reserve over whether to raise interest rates. The labor force is growing slowly because of retirements and sharply reduced immigration, meaning relatively modest job gains may be enough to keep unemployment stable. Economists also expect unusually large May gains in local government, restaurants and hotels to fade, while the World Cup, AI adoption and a shortage of experienced job candidates remain important labor-market factors.

Federal Reserve Chair Kevin Warsh said the central bank will remain independent from day-to-day politics and prioritize returning inflation to its 2% target. His comments suggest a shift from his earlier support for lower interest rates, potentially frustrating President Donald Trump’s calls for rate cuts. Warsh declined to provide forward guidance on future policy, while investors expect the Fed could raise its key rate from about 3.6% to roughly 3.9% as soon as September.

New Federal Reserve Chair Kevin Warsh reaffirmed the central bank’s independence from President Donald Trump and its commitment to restoring inflation to the 2% target. Although Warsh previously supported lower interest rates while seeking the chairmanship, he now appears focused on containing inflation and has declined to preview specific policy moves. Investors consequently expect the Fed could raise its benchmark rate as early as September. Warsh’s position contrasts with Trump’s repeated demands for rate cuts and criticism of former chair Jerome Powell.

US consumer confidence rose slightly in June as falling gas prices eased inflation concerns, though overall sentiment remains historically low after the Iran conflict drove up energy costs. The Conference Board index reached 91.2, still below last year’s level, and consumers expressed a weaker view of the labor market. Despite pessimism, consumer spending has remained strong, supporting economic growth. Gas prices have dropped from post-conflict highs, and job openings remain solid at 7.6 million. Economists expect June job gains of about 100,000 with unemployment holding at 4.3 percent.

U.S. consumer prices rose 4.1% year over year in May, the largest annual increase since April 2023, driven largely by higher gasoline prices and strong demand for semiconductors and other computer equipment linked to artificial-intelligence development. Core inflation also accelerated to 3.4%. Persistent price pressures have led the Federal Reserve to keep interest rates unchanged and prompted some economists to anticipate a rate increase this year, while elevated costs could create political difficulties for President Donald Trump ahead of the midterm elections. Gas prices have since declined from nearly $4.50 to $3.92 per gallon after oil prices fell.

Federal Reserve Chair Kevin Warsh has begun reducing the central bank’s forward guidance and other communications, signaling a return toward the more opaque approach associated with Alan Greenspan. Supporters argue that markets have become too dependent on Fed signals and should rely more on economic data, but analysts warn that less guidance could increase stock and bond volatility and raise borrowing costs. Warsh has also announced task forces to examine the Fed’s communications, balance sheet, data practices, AI’s economic effects and inflation frameworks. Economists say the strategy may work in normal conditions but could prove difficult during a financial crisis unless the Fed provides clearer contingency plans.

New Federal Reserve Chair Kevin Warsh has sharply reduced the central bank’s post-meeting statement and eliminated forward guidance about future interest-rate moves. Supporters argue that markets have become overly dependent on Fed signals and should rely more on economic data, but analysts warn that less communication could produce greater volatility in stocks and bonds and somewhat higher borrowing costs. The shift resembles Alan Greenspan’s more opaque 1990s approach, while Warsh’s broader reforms will also examine Fed projections, its balance sheet, data practices, artificial intelligence, and inflation analysis. Economists caution that forward guidance may be especially valuable during financial crises and that Warsh needs a contingency framework for unexpected shocks and persistent inflation.

U.S. inflation was expected to rise to 4.2% year over year in May, its highest level in roughly three years, driven partly by higher gasoline and shipping costs linked to the Iran war and the closure of the Strait of Hormuz. Core inflation was also forecast to remain above the Federal Reserve’s 2% target, raising expectations that policymakers could consider a rate hike rather than cuts. Falling gasoline prices in June could ease the next reading, while improving employment and economic growth give the Fed less reason to cut rates. Persistent service, clothing and food-price increases, along with tariffs, could nevertheless keep inflation elevated and intensify affordability concerns ahead of the midterm elections.

U.S. inflation rose to 3.8 percent year over year in April, contradicting National Economic Council director Kevin Hassett’s claim that it was in a deep decline and primarily driven by Democratic-led states. Regional data show elevated inflation across all Census Bureau regions, including Republican-led states, while gas prices have surged nationwide amid the Middle Eastern conflict and higher fuel costs have raised transportation and grocery prices. Core CPI increased from 2.5 percent in January to 2.8 percent in April, and core PCE rose to 3.3 percent. Although one trimmed-mean PCE measure has edged down, Federal Reserve officials warn that it can understate inflation during broad price surges.

A Federal Reserve Bank of New York study attributes nearly two-thirds of the rise in unemployment among recent college graduates to the expansion of remote work. Young graduates in jobs that can be performed remotely experienced higher unemployment between 2022 and 2024, while older workers in the same fields saw slight declines. The study suggests employers are reluctant to hire inexperienced graduates for remote positions because training and mentoring are more difficult outside the office. It found little evidence that artificial intelligence was the main cause, since the deterioration in young graduates’ job prospects began before AI tools became widespread.

Remote work has contributed substantially to rising unemployment among recent college graduates, according to a Federal Reserve Bank of New York study. Unemployment increased mainly for young graduates seeking remote-compatible jobs, while older workers in the same occupations experienced lower joblessness. Researchers attribute the disparity to employers’ concerns that inexperienced workers are harder to train and mentor remotely, estimating that remote work accounts for nearly two-thirds of the post-pandemic increase in young graduates’ unemployment. The study found little evidence that artificial intelligence was the primary cause, noting that the worsening outlook began before tools such as ChatGPT became widespread. Hiring data from an unnamed Fortune 500 technology company showed fewer inexperienced hires during remote operations and a partial return to younger-worker recruitment after offices reopened.

Donald Trump claimed on Truth Social that his administration is making food affordable, citing declines in selected grocery items such as eggs, avocados, cheese, olive oil and butter. Government inflation data shows that overall grocery prices rose 2.9% year over year in April, with fresh produce, meat, tomatoes, beef and coffee among the categories becoming substantially more expensive. Several of the items Trump highlighted declined because of factors such as recovering egg supplies, improved olive-oil production and increased imports rather than broad economic improvements. Tariffs, higher diesel and oil costs, drought and other weather conditions are expected to keep food prices elevated, while high prices remain a major concern for consumers and a likely issue in upcoming elections.

Inflation accelerated to 3.8% year over year in April, up from 3.5% in March and the highest level in three years, as gasoline and food costs increased. Core inflation also rose to 3.3%, although monthly core-price growth slowed to 0.2%. Inflation remains well above the Federal Reserve’s 2% target, potentially delaying interest-rate cuts or prompting policymakers to consider a hike, while creating political risks for congressional Republicans.

U.S. consumer confidence declined slightly as elevated inflation, higher food costs and gasoline prices reduced Americans’ purchasing power, contrasting with strong stock-market performance. The Conference Board’s confidence index fell after three months of gains, while the University of Michigan’s consumer sentiment measure reached a record low. Polls also showed growing dissatisfaction with Donald Trump’s economic policies, potentially creating difficulties for Republicans in the midterm elections.

A Federal Reserve Bank of New York report found that a 25 percent rise in gasoline prices in March disproportionately harmed lower-income Americans after the Iran war began. Households earning below $40,000 reduced fuel consumption by 7 percent but spent 12 percent more, while households earning at least $125,000 increased fuel spending by 19 percent and cut consumption by only 1 percent. The divergence was greater than during the 2022 gas-price shock and may have worsened the United States’ K-shaped economy, in which higher-income households continue to fare better than lower-income households.

U.S. economic growth held at a 2% annual rate in the first quarter, while inflation accelerated as gasoline prices surged after the Iran war disrupted oil supplies. Large tax refunds linked to President Donald Trump’s 2025 tax cuts and strong business investment driven by artificial intelligence have temporarily supported consumer spending and growth. Economists warn that the boost from refunds will fade as gas prices remain high, potentially reducing consumer spending and lowering full-year growth forecasts. Central banks, including the Federal Reserve and Bank of England, are holding interest rates steady as they balance persistent inflation against the risk of weaker economic activity. The labor market remains relatively secure, with unemployment-benefit claims at a more than 50-year low, although hiring is weak and entry-level workers face growing pressure from automation.

A key Federal Reserve inflation gauge rose 0.7% in March and 3.5% year over year, its highest annual increase in nearly three years. Core inflation increased 0.3% monthly and 3.2% annually, while higher gas prices linked to the Iran war pushed inflation further above the Fed’s 2% target and reduced the likelihood of near-term interest-rate cuts.

The Federal Reserve held its benchmark interest rate at 3.6% for a third consecutive meeting, while four officials dissented over forward guidance or the lack of an immediate cut. The split reflects tensions within the central bank as Chair Jerome Powell nears the end of his term and Trump nominee Kevin Warsh advances toward succession. Elevated inflation, driven partly by higher energy prices, complicates calls for rate reductions despite stagnant hiring, while Powell’s possible decision to remain on the Fed’s board could intensify conflict with the Trump administration and affect the institution’s independence.

U.S. inflation is expected to accelerate sharply in March, potentially reaching 3.4% annually and posting its largest monthly increase since 2022, largely because gasoline prices surged about 20%. Higher fuel costs are likely to squeeze household spending, raise transportation-related costs and eventually put upward pressure on grocery prices. Economists note that weaker consumer demand, slower income growth and the absence of pandemic-era stimulus make a sustained inflation shock less likely than in 2021–22, though the episode could resemble the 1990–91 oil shock. The increase complicates the Federal Reserve’s plans to cut interest rates, with officials increasingly open to holding rates higher or raising them if core inflation remains elevated, even as weaker spending and possible layoffs create pressure to support economic growth.

A Federal Reserve-monitored inflation gauge rose 0.4% in February from January, leaving prices 2.8% higher than a year earlier. Core inflation also increased 0.4% monthly and stood 3% above its year-earlier level, exceeding the pace consistent with the Fed’s 2% target. Economists expect March consumer-price data to show a sharp acceleration driven by gas-price increases linked to the Iran war, which could further discourage the Fed from cutting interest rates and potentially revive discussion of rate hikes.

Minutes from the Federal Reserve’s March 17–18 meeting show that more policymakers than in January were open to raising interest rates this year, with many warning that higher oil and gas prices linked to the Iran conflict could keep inflation elevated longer than expected. The Fed held its key rate at about 3.6% after three cuts in late 2025. Chair Jerome Powell said further rate reductions would depend on sustained progress in lowering underlying inflation, while officials also warned that higher fuel costs could reduce consumer spending, slow growth and increase unemployment.

Beth Hammack, president of the Federal Reserve Bank of Cleveland, said the Fed may need to raise interest rates if inflation remains persistently above its 2% target, though she would also support cuts if higher gas prices significantly weaken growth and employment. Rising gasoline prices linked to the Iran war are expected to push U.S. inflation sharply higher, with economists forecasting annual inflation of 3.1% in March and Cleveland Fed estimates reaching 3.5% in April. The developments create competing risks for the Fed, while a rate hike would likely provoke renewed criticism from President Donald Trump, who has called for rates to fall to 1%.

A transcript of a sealed March 3 hearing shows federal prosecutor Andrew Massucco acknowledged that prosecutors could not identify specific false statements by Federal Reserve Chair Jerome Powell or evidence of fraud related to the Fed’s $2.5 billion renovation. Chief Judge James Boasberg subsequently quashed government subpoenas, saying the Justice Department had provided essentially no evidence of criminal conduct and appeared possibly to be targeting Powell. Federal Reserve counsel Robert Hur argued that the investigation was intended to pressure Powell in support of Donald Trump’s demand for lower interest rates, while U.S. Attorney Jeanine Pirro defended the subpoenas and vowed to appeal. The investigation has also delayed Senate consideration of Kevin Warsh as Powell’s potential successor.

The war in Iran has pushed up gas prices and longer-term borrowing costs, complicating the Federal Reserve’s interest-rate decisions. Investors no longer expect rate cuts this year, while the probability of a rate hike by October has risen to nearly 25%. Fed officials are increasingly focused on the risk that higher energy prices will worsen already-persistent inflation, although a prolonged price shock could also weaken consumer spending and increase unemployment. The 10-year Treasury yield has risen from below 4% to nearly 4.4%, while average 30-year mortgage rates have climbed to 6.22%.

Americans have become sharply more pessimistic about finding quality jobs: only 28% of workers surveyed by Gallup said late in 2025 was a good time to search, compared with 70% in mid-2022. College graduates and younger workers are especially discouraged, reflecting weak white-collar hiring and a low-hire, low-fire labor market in which layoffs remain limited but new opportunities are scarce. Government data showed the hiring rate had fallen to 3.2%, its lowest level since 2013, while unemployed people outnumbered available jobs. Gallup and Conference Board measures also indicate that workers’ assessments of their current lives, future prospects and the broader economy have deteriorated substantially.

A sharp rise in U.S. gasoline prices following the Iran war could offset much or all of the expected boost from larger tax refunds under Donald Trump’s tax-cut legislation. Estimates suggest the average household could spend roughly $740 more on gas this year, close to the projected $748 increase in refunds, while another forecast puts the nationwide consumer cost above the total increase in refunds. Lower- and middle-income households face the greatest pressure because they receive smaller refunds and spend a larger share of their income on fuel. Economists expect higher inflation and slower consumer spending and have cut some growth forecasts, although continued spending on discretionary goods and services suggests the economy may remain resilient.

The Federal Reserve held its benchmark interest rate at about 3.6% for a second consecutive meeting, while maintaining projections for one rate cut in 2026. Officials expect the Iran war and resulting energy-price spike to lift inflation temporarily, forecasting 2.7% inflation this year, 2.2% in 2027 and a return to the 2% target in 2028, while projecting 2.4% economic growth and 4.4% unemployment. Chair Jerome Powell said he intends to remain at the Fed through the Justice Department investigation into building renovations, although his chair term ends on May 15. Donald Trump's nominee to replace him, Kevin Warsh, faces a delayed Senate confirmation, and Governor Stephen Miran dissented in favor of an immediate quarter-point cut. Stocks fell and gasoline prices rose after the decision.

The Federal Reserve is expected to keep its key interest rate near 3.6% at its meeting, but its projections could remove the previously anticipated rate cut this year. The Iran war has driven gasoline and oil prices higher, likely pushing inflation toward 3% while also threatening consumer spending, economic growth and employment. The Fed is therefore caught between holding or raising rates to contain inflation and cutting them to support jobs. The meeting also comes near Jerome Powell’s expected departure as chair; Donald Trump’s nominee, Kevin Warsh, faces a delayed Senate confirmation amid a Justice Department investigation involving Powell. Persistent inflation and weakening hiring data had already complicated the Fed’s outlook.

U.S. prices rose 2.8% year over year in January, while core inflation accelerated to 3.1%, its highest level in nearly two years. Monthly core prices increased 0.4% for the second consecutive month, putting inflation above the Federal Reserve’s 2% target. The subsequent Iran war and closure of the Strait of Hormuz drove oil prices up more than 40% and gasoline to about $3.60 per gallon, with economists expecting further inflation increases in March and April. The Federal Reserve is widely expected to leave interest rates unchanged at its next meeting.

February inflation was expected to remain relatively subdued, with annual consumer-price growth around 2.5% and core inflation at 2.5%. However, the Iran war and disruption to Persian Gulf shipping have sharply increased oil and gasoline prices, threatening a much larger inflation surge in March and potentially pushing annual inflation toward 4% if the Strait of Hormuz remains closed. Higher fuel costs could also raise airfares, shipping expenses, food prices and restaurant bills. The shock may delay Federal Reserve interest-rate cuts, leaving policymakers caught between renewed inflation risks and weakening employment after a sharp February job loss.

U.S. and Israeli attacks on Iran have pushed oil prices higher and created additional uncertainty for an American economy already facing inflation, weak hiring and tariff-related disruption. A short conflict would likely have limited effects, but a prolonged war or closure of the Strait of Hormuz could send oil above $100 per barrel, raise gasoline, shipping, air-fare and heating costs, accelerate inflation and weaken economic growth. Economists also warn that prolonged uncertainty could reduce business investment and hiring. Higher prices could further damage consumer confidence and undermine President Donald Trump's economic standing, while existing oil inventories and the service-based structure of the U.S. economy may limit the initial impact.

Federal Reserve Governor Christopher Waller said the prospect of a March interest-rate cut is nearly evenly balanced after January employers added more jobs than expected. He said the Fed could hold rates steady if February’s employment data confirms that labor-market risks have eased, but would favor a cut if January’s gains are revised away or fail to continue. Waller’s position marks a shift from his earlier dissent in favor of lowering rates. The Fed’s decision comes amid renewed criticism from President Donald Trump, who has demanded lower rates and attacked Chair Jerome Powell.

US fourth-quarter GDP growth slowed to an annualized 1.4%, down sharply from 4.4% in the previous quarter, as government and consumer spending weakened. Despite continued growth, fewer than 200,000 jobs were added during the year, while immigration restrictions, tariff uncertainty and concerns about artificial intelligence were cited as possible causes. Donald Trump rejected responsibility and blamed a Democratic government shutdown, while also calling for lower interest rates. Consumer confidence fell to its lowest level since 2014 even as inflation moderated and unemployment remained low.

U.S. GDP grew at a 1.4% annualized rate in the fourth quarter, down sharply from 4.4% in the third quarter, as government and consumer spending weakened. The economy grew 2.2% overall in 2025 but added fewer than 200,000 jobs, while unemployment rose only slightly to 4.3%. Economists cite slower population growth linked to immigration restrictions, uncertainty over artificial intelligence, and tariff-related costs as possible reasons for weak hiring. Donald Trump blamed a government shutdown and urged lower interest rates. Despite slowing inflation and continued growth, consumer confidence remains depressed, with spending potentially increasingly driven by higher-income households.

U.S. inflation accelerated in December, with prices rising 0.4% from November and 2.9% year over year, while core inflation increased 0.4% monthly and 3% annually. The figures exceeded expectations and remained above the Federal Reserve’s 2% target, though inflation is still well below its 2022 peak. Consumer spending also rose 0.4% in December, indicating continued economic activity despite persistent public dissatisfaction with elevated prices.

Minutes from the Federal Reserve’s January 27–28 meeting show that many officials want inflation to fall further before supporting additional interest-rate cuts, especially as the labor market appears to be stabilizing. The Fed held its key rate at about 3.6% after three cuts late the previous year, while Governors Stephen Miran and Christopher Waller dissented in favor of another quarter-point reduction. Officials remain divided, with some supporting future cuts if inflation declines, others favoring an extended pause, and several open to signaling that the next move could be either a cut or a hike if inflation remains above the 2% target.

U.S. inflation is expected to have eased in January, with headline inflation forecast at 2.4% and core inflation at 2.5%, potentially the lowest core reading in nearly five years. However, monthly price increases may remain elevated, while food, housing and other costs are still roughly 25% higher than five years ago. Cooling wage growth and weaker hiring could reduce inflationary pressure, although businesses may pass on additional tariff costs. Continued moderation could allow the Federal Reserve to cut interest rates and bring inflation closer to its 2% target by the end of 2026.

President Donald Trump endorsed Nexstar Media Group’s proposed $6.2 billion acquisition of Tegna, reversing his earlier criticism that the deal could expand left-leaning media networks. The merger would combine major local television holdings, with Nexstar overseeing more than 200 stations and Tegna owning 64 stations. It requires regulatory approval and comes as the Federal Communications Commission considers loosening local station ownership limits. Nexstar says the Trump administration’s deregulatory agenda would allow broadcasters to expand and compete more effectively with major technology and media companies.

New data from the Federal Reserve Bank of New York shows that higher-income and college-educated Americans have increased their inflation-adjusted spending more rapidly over the past three years than middle- and lower-income households. Households earning at least $125,000 increased spending by 2.3% since 2023, compared with 1.6% for middle-income households and 0.9% for those earning below $40,000. Lower-income and rural households also faced higher inflation late last year, largely because essentials such as housing, groceries and utilities make up a larger share of their budgets. The findings support the idea of a “K-shaped” economy in which affluent consumers drive growth while poorer households see fewer gains.

Federal Reserve officials are expected to leave short-term interest rates unchanged after three cuts last year, as unemployment has stabilized, growth may be improving and inflation remains above the Fed’s 2% target. The rate-setting committee is divided over whether further cuts are needed to support hiring, though economists generally expect two reductions later in the year. The decision comes amid pressure from Donald Trump’s administration, including a Justice Department investigation involving Jerome Powell, efforts to remove Fed governor Lisa Cook, and plans to name Powell’s successor. The pressure may have strengthened political support for the Fed’s independence, while consumer confidence has fallen despite expectations that tax refunds will boost spending.

The Federal Reserve is expected to leave its key interest rate unchanged at about 3.6% after three cuts last year, as inflation remains elevated and the labor market shows signs of stabilizing. Chair Jerome Powell is also facing unusual political and legal pressure: the Justice Department has subpoenaed the Fed over his testimony about a building renovation, while the Supreme Court is considering whether President Donald Trump can remove Governor Lisa Cook. Powell is expected to stress that monetary-policy decisions are driven by economic conditions rather than politics. Economists see further rate cuts as possible later in the year if inflation declines or hiring weakens, but stronger growth, tax refunds and continued labor-market resilience could lead the Fed to wait.

The Federal Reserve’s preferred inflation gauge rose 2.8% year over year in November, up from 2.7% in October, while core inflation also increased to 2.8%. Monthly price growth remained moderate at 0.2%, suggesting inflation could gradually move toward the Fed’s 2% target. Separately, the U.S. economy expanded at a 4.4% annual rate in the third quarter, its fastest growth in two years.

U.S. consumer prices were expected to rise 2.6% year over year and 0.3% month over month in December, while core inflation was forecast at 2.7% annually. Economists warned that the six-week government shutdown disrupted price collection and that the return to normal data gathering could produce a larger increase. Persistent inflation in groceries, rent and clothing has kept prices roughly 25% above pre-pandemic levels and constrained the Federal Reserve’s ability to cut interest rates. The Fed reduced its key rate by a quarter-point in December but indicated it would likely pause further cuts. Tensions have intensified as Donald Trump demands deeper rate reductions and the Justice Department investigates matters related to Jerome Powell’s congressional testimony, prompting Powell to warn that political pressure could threaten the Fed’s independence.

U.S. employers were expected to add about 55,000 jobs in December, with unemployment potentially easing to 4.5%, capping a year of notably weak hiring. Employment data were disrupted by the federal shutdown, and upcoming benchmark revisions may substantially reduce previously reported job gains. The labor market has weakened even as economic growth remained solid, creating uncertainty over whether hiring will recover, constrain future growth, or be held back by automation and artificial intelligence. The Federal Reserve cut interest rates three times late in the year but may pause, although a particularly weak jobs report could increase pressure for another reduction. Inflation remained above the Fed’s target, while potential benefits from tax refunds and continued economic growth could support hiring in 2026.

U.S. employers posted 7.1 million job openings at the end of November, down from 7.4 million in October and the second-lowest level in five years. Layoffs also declined, indicating a low-hire, low-fire labor market in which existing workers have relative job security while unemployed people face difficulty finding work. The figures come from the Labor Department’s JOLTS survey, following delays caused by the previous government shutdown; the monthly employment report, including the unemployment rate, was expected later in the week.

Minutes from the Federal Reserve’s December 9–10 meeting revealed an unusually divided 9–3 vote to cut the key interest rate by a quarter point to about 3.6%, its third reduction of the year. Two officials preferred no cut, while one favored a half-point reduction, and some supporters backed the move only reluctantly. Officials disagreed over whether weak hiring or persistent inflation posed the greater economic threat, while delayed data from a six-week government shutdown complicated decision-making. The minutes suggested some policymakers wanted more economic data before making further rate changes.

A JetBlue flight traveling from Curaçao to New York narrowly avoided a mid-air collision with a US Air Force refueling tanker near Venezuela. The tanker reportedly crossed the passenger plane’s path without its transponder active, forcing the JetBlue pilot to stop climbing after estimating the aircraft passed within two or three miles at the same altitude. JetBlue notified federal authorities and will cooperate with an investigation, while the Air Force had not commented. The incident occurred amid increased US military drug-interdiction activity in the Caribbean and heightened pressure on Venezuela.

A JetBlue flight from Curaçao to New York was forced to stop climbing after a U.S. Air Force aerial refueling tanker reportedly crossed directly in front of it at the same altitude near Venezuela. The JetBlue pilot said the military aircraft was within roughly two to five miles, lacked an active transponder, and then entered Venezuelan airspace. JetBlue reported the incident to federal authorities and said it would cooperate with any investigation, while the Air Force had not immediately commented.

The Federal Reserve is expected to cut its key interest rate for a third consecutive meeting, bringing it to about 3.6%, but may signal that another reduction in January is less likely. Delayed jobs and inflation data caused by the government shutdown have deepened divisions among policymakers, with some prioritizing weak hiring and others remaining concerned that inflation is above the Fed’s 2% target. Future cuts will depend on incoming data, while economic projections are expected to indicate only one reduction next year. The anticipated appointment of a new chair by President Donald Trump, possibly Kevin Hassett, could increase pressure for lower borrowing costs and make the projections less reliable.

The Federal Reserve is widely expected to cut its benchmark interest rate by a quarter point at its December 9–10 meeting, despite unusually deep disagreement among policymakers. Elevated inflation argues for holding rates steady, while weakening hiring and rising unemployment support another cut. The decision could attract as many as three dissenting votes, including officials favoring no cut and Trump appointee Stephen Miran, who supports a larger reduction. Most economists anticipate a “hawkish cut” followed by a pause as officials assess delayed employment and inflation data. The debate may intensify after Jerome Powell’s term ends in May, particularly if Kevin Hassett succeeds him and advocates faster easing. Donald Trump’s attacks on Powell add to concerns about the Fed’s independence, while a sharply divided vote could undermine market confidence in the central bank’s future direction.

Treasury Secretary Scott Bessent said the White House may veto nominees for the Federal Reserve’s 12 regional bank presidencies unless they have lived in the districts they would lead for at least three years. The proposed requirement follows criticism from Bessent and President Donald Trump of regional Fed presidents who oppose cutting interest rates. Critics could view the veto power as an attempt to increase political control over an institution traditionally independent from the administration. Regional bank presidents contribute to interest-rate decisions, with some voting on a rotating basis, while the New York Fed president and the Fed’s governors vote at every meeting.

The K-shaped economy describes a widening divide in which affluent Americans benefit from rising assets, strong stock markets and premium consumption while lower- and middle-income households face weaker wage growth, high prices and rising credit-card debt. Recent data show lower-income wage growth and spending falling behind, while AI infrastructure investment boosts major technology companies without creating comparable employment gains. Businesses are responding by targeting wealthy consumers with premium products while offering smaller or cheaper options to financially pressured households. Economists warn that the pattern may be unsustainable: a rise in unemployment could cause weaker consumers to cut spending, reduce corporate revenue and eventually undermine AI investment and broader growth. Possible tax refunds and lower interest rates could provide relief, but may also intensify inflation.

U.S. applications for unemployment benefits fell by 6,000 to 216,000 in the week ending November 22, indicating that layoffs remain relatively low. The four-week average also declined to 223,750, while the number of people continuing to receive benefits rose to 1.96 million. Recently announced job cuts at companies including Target and Amazon may not yet appear in the claims data because they can take weeks or months to implement.

U.S. consumer confidence fell sharply in November to 88.7 from an upwardly revised 95.5 in October, reflecting growing concerns about high prices, tariffs, inflation and weaker job prospects. The share of consumers viewing jobs as plentiful declined, while mentions of jobs being hard to get increased from September. The government shutdown, which ended on November 12, disrupted federal pay, contracts and air travel and is expected to weigh on fourth-quarter growth. Economists do not expect consumer spending to collapse, but the rising gap between economic concerns and spending behavior is increasing downside risks. The deterioration across political affiliations, particularly among independents, could create political difficulties for Donald Trump and congressional Republicans.

US retail sales increased 0.2% in September as consumers moderated spending after strong gains during the summer. The delayed Commerce Department report indicates that consumer spending remains resilient despite high prices, potentially supporting economic growth of 3% or more in the third quarter. However, weak hiring and an unemployment rate rising to 4.4% could weigh on future spending. Higher-income consumers are driving much of the growth, while lower-income shoppers are focusing more on necessities and bargains. Retail forecasters expect modest holiday-season gains, with the National Retail Federation projecting sales above $1 trillion for the first time.

Federal Reserve minutes show that a majority of policymakers favored further interest-rate cuts, but officials were sharply divided over whether to cut rates at the December 9–10 meeting. Many supported leaving rates unchanged for the rest of the year amid inflation near 3%, well above the Fed’s 2% target, while others remained concerned about weak hiring. The Fed reduced its key rate to about 3.9% in late October, but market expectations for another December cut have fallen to roughly 50%. October and November employment data will not be available before the meeting, limiting policymakers’ information and potentially reducing the likelihood of a cut.

The Federal Reserve released new supervision guidelines directing examiners to focus on material financial risks rather than extensive procedural and documentation requirements. The framework allows banks to self-certify on some issues and gives greater deference to the Office of the Comptroller of the Currency and state regulators. Banking-industry groups welcomed the changes, while former vice chair for supervision Michael Barr warned that weaker oversight and a planned 30% staffing reduction could delay intervention, limit enforcement, and allow excessive risks to build up.

Federal Reserve Governor Lisa Cook’s attorney, Abbe Lowell, told Attorney General Pam Bondi that mortgage-fraud allegations brought by FHFA Director Bill Pulte are baseless and unsupported by evidence of intent to deceive. Lowell said discrepancies involving properties in Michigan, Georgia, and Massachusetts were isolated errors or accurately reflected changes in Cook’s circumstances, while her prior filings disclosed the properties appropriately. The allegations helped President Donald Trump seek Cook’s removal, but the Supreme Court has allowed her to remain in office while she challenges the administration and will hear arguments in January. Lowell also accused Pulte of selectively targeting Democrats while overlooking similar allegations involving Trump allies. The dispute comes amid broader concerns about Pulte’s actions at Fannie Mae and Freddie Mac and Trump’s efforts to influence the Federal Reserve.

The Labor Department is scheduled to release the September jobs report roughly six weeks late, beginning the recovery of economic statistics disrupted by a 43-day federal shutdown. More than 30 Labor and Commerce Department reports were delayed, leaving the Federal Reserve, investors and policymakers without timely information on employment, inflation and growth. Economists expect about 65,000 jobs to have been added in September and unemployment to remain near 4.3%. October data will also be incomplete: the jobs survey may omit the unemployment rate, and an October inflation report may not be produced. The missing data is complicating the Federal Reserve’s debate over another interest-rate cut, while officials and economists say the available statistics should remain largely unbiased despite Trump’s earlier dismissal of the BLS director.

The six-week US government shutdown disrupted the economy through missed paychecks, canceled flights, delayed federal contracts, interrupted SNAP benefits and weakened consumer sentiment. The Congressional Budget Office estimates that it will reduce fourth-quarter growth by about 1.5 percentage points, temporarily lift first-quarter growth after reopening, and permanently eliminate roughly $11 billion in economic activity. Missing jobs, inflation and spending data may lead the Federal Reserve to delay an expected December interest-rate cut. The shutdown compounds sluggish hiring, elevated inflation and uncertainty from President Donald Trump’s tariffs, although most economists do not expect a recession.

The prolonged U.S. government shutdown is expected to leave a lasting economic impact despite the recovery of much activity after reopening and the payment of federal worker back wages. The Congressional Budget Office estimates that a six-week closure would reduce fourth-quarter growth by 1.5 percentage points, temporarily boost first-quarter growth by 2.2 points after reopening, and permanently eliminate about $11 billion in economic activity. Lost paychecks, canceled flights, reduced travel and restaurant spending, delayed federal contracts, interrupted SNAP benefits, and weaker consumer sentiment are weighing on the economy. The shutdown has also delayed key economic data, making it harder for the Federal Reserve to assess conditions and potentially reducing the likelihood of a near-term interest-rate cut. Economists generally do not expect a recession, but contractors and communities with large federal workforces may face prolonged effects.

The U.S. economy is growing and the unemployment rate remains low, but hiring has slowed to its weakest pace in more than a decade, leaving unemployed workers in increasingly long job searches. Companies are delaying or eliminating openings amid uncertainty over tariffs, interest rates, immigration, artificial intelligence and the government shutdown. Private-sector indicators provide conflicting signals, with modest hiring gains offset by rising announced layoffs and estimates of net job losses. Reduced immigration and deportations have also lowered the labor supply, helping keep the unemployment rate down. Younger and older workers are particularly affected, while longer unemployment spells and people abandoning job searches may make official unemployment figures appear healthier than conditions experienced by many Americans.

The Federal Reserve is widely expected to cut its short-term interest rate again despite a government shutdown that has delayed or potentially eliminated key employment, inflation, economic-growth and consumer-spending reports. Officials are using private-sector data, including ADP’s weekly hiring measure, and believe the current rate of about 4.1% is still restrictive enough to permit further cuts. The Fed may also end the reduction of its securities holdings sooner than expected because bank reserves are declining, aiming to avoid a repeat of the 2019 spike in short-term borrowing costs.

The Federal Reserve is widely expected to reduce its key interest rate from about 4.1% to 3.9% on Wednesday, its second cut of the year, as hiring has nearly stalled and risks to employment have increased. Officials must make the decision amid elevated but non-accelerating inflation, solid growth driven partly by artificial-intelligence investment, and a government shutdown that has delayed or prevented key jobs and inflation data. Markets assign more than a 90% chance to another cut in December, although Fed officials remain divided and Christopher Waller says future reductions should depend on incoming economic evidence. Lower rates have already helped bring average 30-year mortgage rates down to about 6.2%, potentially supporting housing and reducing borrowing costs.