Monetary policy

Observers said the Supreme Court likely will allow Federal Reserve Gov. Lisa Cook to remain at her post while she challenges her purported removal by President Donald Trump. But her continued presence would slow, rather than stop, the president's quest for a voting majority on the central bank board.

Federal Reserve Vice Chair for Supervision Michelle Bowman warned that labor market conditions could weaken further and said the central bank should avoid signaling a pause in monetary policy.

A handful of former Fed officials noted that the markets' measured response to a probe into Fed Chair Jerome Powell was a result of pushback from Trump allies.

Financial markets took a tumble Monday morning after Federal Reserve Chair Jerome Powell announced that he was the subject of a Justice Department inquiry concerning the central bank's headquarters renovation. Lawmakers and former Fed officials decried the move as political intimidation.

Federal Reserve Bank of Richmond President Tom Barkin said economic uncertainty should ease in the coming year as businesses gain confidence in sustained demand and adapt to the new policy environment.

Minneapolis Federal Reserve President Neel Kashkari said on CNBC that both sides of the central bank's dual mandate show signs of imbalance, with the labor market appearing more vulnerable.

The Federal Reserve is slated to undertake a number of important rules and regulations in 2026, but decisions around agency leadership and the Trump administration's avowed effort to exert greater control over the central bank are likely to leave a lasting legacy at the agency.

Monetary policy remains the key to the markets. The Federal Open Market Committee predicts one rate cut in 2026, but the panel will get a lot of data before

The Bureau of Labor Statistics Thursday indicated that the Core Consumer Price Index indicated that inflation rose by only 2.7% in November versus a year ago, a pace that is the slowest rate of price increases since 2021.

Federal Reserve Gov. Christopher Waller said monetary policy must remain insulated from political pressure, arguing that communication with the White House should be limited. Waller is slated to meet with President Trump Wednesday afternoon.

The Bureau of Labor Statistics Tuesday reported that the economy added 64,000 jobs in November after posting a loss of 105,000 jobs in October, which was largely attributable to the onset of the government's deferred resignation program. Unemployment also ticked up to 4.6% from 4.4% in November.

Federal Reserve Gov. Stephen Miran said higher goods prices could be the trade-off for bolstering national security and addressing geo-economic risks.

Kansas City Federal Reserve President Jeffrey Schmid and Chicago Fed President Austan Goolsbee said in statements Friday that their dissents from this week's interest rate decision were spurred by inflation concerns and a lack of sufficient economic data.

The Federal Reserve Board of Governors voted Wednesday to reappoint 11 sitting regional Fed presidents, without any dissents. The move precludes any effort the White House might have made to pressure the board to deny reappointments.

Fed Chair Jerome Powell, speaking at a press conference after the December FOMC meeting, said the central bank is holding interest rates steady until it gets more clarity on the economy.

The Federal Reserve's interest rate-setting committee is widely expected to cut rates by 25 basis points today, but where the central bank goes from here is an open question.

In oral arguments held Monday morning, a majority of Supreme Court justices seemed poised to overrule a 90-year-old precedent validating multimember independent commissions, but it remains uncertain what limits — if any — the court may impose on the president's removal powers.

Federal Reserve watchers expect a board of governors vote in February to reappoint the 12 regional Fed bank presidents — which is typically treated as a formality — to be the next flashpoint in the White House's effort to bring the central bank to heel.

Treasury Secretary Scott Bessent said the Federal Reserve Board should reject the renomination of any regional Federal Reserve Bank presidents who have not lived in their districts for three years, signaling a potential confrontation when reappointments come before the board in February.

Federal Reserve Gov. Stephen Miran reiterated his view that monetary policy has become more restrictive than economists think, but expressed increased urgency that the central bank take strong corrective action.