“Federal Reserve Chair Jerome Powell said Tuesday that the central bank would likely have already cut interest rates this year if not for the economic shock generated by President Trump’s tariffs,” The Hill reports.
Said Powell: “We went on hold when we saw the size of the tariffs… All inflation forecasts for the United States went up materially as a consequence of the tariffs.”
“Shares in Tesla sank early Tuesday after President Trump threatened to go after Elon Musk’s federal subsidies,” Axios reports.
“A few months ago Musk and Trump’s close relationship was seen as the key to making Tesla massively more valuable. Now, their split is becoming more of an existential threat to the company.”
New York Times: “The United States’ currency has weakened more than 10 percent over the past six months when compared with a basket of currencies from the country’s major trading partners. The last time the dollar weakened so much at the start of the year was 1973, after the United States had made a seismic shift that had ended the linking of the dollar to the price of gold.”
“This time the seismic event is President Trump’s efforts to remake the world order with an aggressive tariff push and a more isolationist foreign policy.”
“President Trump’s exasperation over the Federal Reserve’s take-it-slow approach to cutting interest rates is prompting him to consider accelerating when he will announce his pick to succeed Chair Jerome Powell, whose term runs for another 11 months,” the Wall Street Journal reports.
“In recent weeks, the president has toyed with the idea of selecting and announcing Powell’s replacement by September or October, according to people familiar with the matter. One of these people said the president’s ire toward Powell could prompt an even-earlier announcement sometime this summer.”
President Donald Trump criticized Federal Reserve Chair Jerome Powell after the central bank kept rates steady for a fourth time, CNBC reports.
Trump said “Too Late” Powell is costing the United States “hundreds of billions of dollars” by not cutting rates, leveling a familiar criticism against the Fed chair who has repeatedly ignored Trump’s pressure campaign to cut rates.
Trump called Powell a “real dummy.”
“Sen. Bernie Moreno (R-OH) is providing some supporting Senate fire in President Trump’s unrelenting assault on Fed Chair Jerome Powell,” Axios reports.
“Senate Republicans have largely defended Powell in the face of Trump’s attacks and guarded the Fed’s independence. But Moreno is sending a clear signal that tariffs and interest rates will be part of the conversation for whoever succeeds Powell at the Fed.”
Bloomberg: “There is no better barometer of global investors’ repudiation of President Donald Trump’s policies than the dollar. Since he took office, it’s lost more than 10% of its value against the euro, pound and Swiss franc and is down against every single major currency in the world.”
“The last time the dollar plunged this much, this fast was in 2010, when the Federal Reserve was frantically printing money to prop up the economy in the wake of the financial crisis.”
“This time, it’s several of the key pillars of the Trump agenda that are driving investors away: the across-the-board tariff hikes that shocked allies and upended trade; the push to ram through tax cuts that would add to bloated deficits and debt; the pressure campaign to get the Fed to slash interest rates; and the bare-knuckled legal tactics employed against those who oppose his policies.”
“Federal Reserve officials left the door open to cutting interest rates in the second half of the year when they agreed to hold rates steady Wednesday,” the Wall Street Journal reports.
“President Trump pre-emptively blasted the widely anticipated rate decision earlier in the day and called for much more dramatic cuts of between 1 and 2.5 percentage points. The Fed left its policy rate in a range between 4.25% and 4.5%.”
“An adage on Wall Street holds that it is unwise to play politics with your portfolio. Americans are increasingly doing just that,” the Wall Street Journal reports.
“A Gallup poll this spring showed that Democrats who expected stocks to tumble over the next six months exceeded Republicans by 59 percentage points. Republicans expecting stocks to climb over that period topped Democrats by 47 percentage points.”
“Secretary of Defense Pete Hegseth sold off 23 stocks ahead of President Donald Trump’s sweeping tariff announcement and the ensuing stock market plunge in early April,” NOTUS reports.
“Hegseth reported selling between $100,000 and $550,000 in stocks on March 24. Those stocks included Microsoft, Apple, Amazon, Walmart, Lowe’s and about 20 other companies — almost all of which saw stock prices plummet after Trump’s April 2 announcement.”
“In the days before President Donald Trump suddenly paused most of the punishing tariffs on foreign countries he had revealed in early April, more than a dozen congressional lawmakers were tied to thousands of dollars’ worth of stock transactions, including significant purchases as the US stock market tumbled,” CNN reports.
“A growing chorus of advisers inside and outside the Trump administration are pushing another name to serve as the next chair of the Federal Reserve: Treasury Secretary Scott Bessent,” Bloomberg reports.
“President Donald Trump said Friday he would name a successor “very soon” to replace Jerome Powell, whose term as Fed chair ends in May 2026. The small list of candidates under consideration has included Kevin Warsh, a former Fed official whom Trump interviewed for the Treasury secretary role in November.”
President Trump urged Federal Reserve Chairman Jerome Powell to slash interest rates by a full percentage point, despite a better-than-expected result from the Labor Department’s latest jobs report, CNBC reports.
Reuters: “The feud, which exploded in spectacular fashion over the course of a few hours, pushed shares of electric vehicle maker Tesla down dramatically. The company, where Musk serves as CEO, closed down 14.3% for the day and lost about $150 billion in value after Trump and Musk began their war of words.”
Paul Krugman: “On May 12 Donald Trump suddenly reduced the tariff on China from 145 percent to 30 percent. This may seem like a big reduction. But while the higher rate would have completely cut off trade with China, even the lower tariff rate, by my estimates, would cut U.S.-China trade by two-thirds. It wasn’t clear that much had changed.”
“But many retail investors, engaging in wishful thinking, interpreted the apparent climb-down as proof of concept for TACO — Trump always chickens out. So the stock market began behaving as if Trump would soon find an off-ramp out of his whole tariff obsession. Notably, however, the bond and currency markets, dominated by pros, didn’t let up on the “sell America” trade — the dollar continued to fall while interest rates continued to rise.”
“So I’m not convinced that the worst is over.”
Politico: “Trump-appointed regulators are nearing completion of a proposal that would relax rules on how much of a capital cushion the nation’s largest banks must have to absorb potential losses and remain solvent during periods of economic stress… It could be released in the coming months.”
“Wall Street bankers and executives are privately warning the Trump administration that the tax bill moving through Congress could stoke investor anxiety about rising deficits, push up U.S. borrowing costs and damage the broader economy,” the Washington Post reports.
Financial Times: Do Republicans still care about debt?
“JPMorgan Chase Chief Executive Jamie Dimon delivered a dire warning for the markets, predicting a crisis unless the U.S. takes steps to address its spiraling national debt,” the Wall Street Journal reports.
Said Dimon: “You are going to see a crack in the bond market, OK? It is going to happen.”
Taegan Goddard
Taegan Goddard is the founder of Political Wire -- which for more than two decades has been one of the nation's most influential political news sites.
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