FINANCIAL TIMES
-Jay Powell has suggested a Federal Reserve rate cut in September due to a softening US labor market, which could offset risks of Donald Trump's tariffs worsening inflation. Powell's remarks put him in the camp of doves on the Federal Open Market Committee and signaled he could support a quarter-point cut at the central bank's next meeting in September. US government debt rallied after his speech, with the yield on the two-year Treasury note dropping 0.1 percentage points to 3.69%. The speech comes amid a pivotal time for the Fed, as the US president and his allies have launched a campaign against Powell and other top Fed officials, insisting the central bank should drastically cut rates. The Fed has held its main rate at a 4.25-4.5% range this year, following 1 percentage point of cuts in 2024, as some officials worry Trump's tariffs on US trading partners will ignite a fresh surge in inflation.
-The Trump administration is threatening to fire Federal Reserve Chairman, Alan Powell, and other top Fed officials to curb central banking independence, which has underpinned America's economic foundations for over half a century. This comes amid a White House putsch at the Bureau of Labor Statistics, which has shaken confidence in the sanctity of economic data. The meetings in Jackson Hole, Wyoming, have become synonymous with central bankers' power and prestige, but economists are aware that the ascendancy of technocrats is in danger of being thrown dramatically into reverse. Glenn Hubbard, a chair of the White House's Council of Economic Advisers under George W. Bush, cites the broad discontent among Americans with experts and fears that if they don't pick up the thread, the populist frenzy will only get worse. Powell stated that he and his colleagues would make their decisions "solely" on the basis of economic evidence, as he teed up the possibility of further interest rate cuts.
-US President Donald Trump's administration is planning to take a 10% stake in struggling chipmaker Intel, as part of a corporate intervention to strengthen America's semiconductor industry. The US government will make an $8.9B equity investment, funded by federal grants under the 2022 Chips Act. This will give Washington a roughly 9.9% stake in the group. The deal is part of Trump's move towards a more interventionist approach to corporate America, edging closer to 1960s European state capitalism than US free-market orthodoxy. The US will also receive a five-year warrant, allowing it to purchase an additional 5% of the group at $20 a share, provided Intel divests majority ownership of its foundry business.
-Boston Consulting Group (BCG) has faced backlash and disappointment within its Middle Eastern business after revelations that the firm helped set up an Israeli-backed aid scheme for Gaza and modeled plans to relocate Palestinians from the enclave. The revelations have widened fissures within the firm, which has been triggered by Hamas's October 7, 2023 attack and Israel's military campaign in Gaza. A US BCG team worked for seven months to establish the Gaza Humanitarian Foundation, an aid distribution scheme condemned by humanitarian groups. The team also produced a financial model of postwar Gaza for Israeli businessmen backing GHF, including the economic impact of incentives for Palestinians to relocate abroad.
-Revolution Wind, a US offshore wind project developed by Orsted and Skyborn Renewables, is 80% complete, with foundations and 45 of 65 planned turbines installed. The project, which was set to start operations next year, was due to supply power for 350,000 homes in Rhode Island and Connecticut under 20-year contracts. The Trump administration intervened in the project for the second time, after paused Equinor's Empire Wind project. Ørsted has obtained necessary permits and is evaluating its options, including legal action. The potential delay or loss of revenues puts pressure on the company, which launched a $9.4B emergency rights issue.
-The Congressional Budget Office has reported that Donald Trump's tariff drive will reduce US deficits by $4T over the next decade, addressing concerns that the president's tax bill will worsen public finances. The tariffs announced so far this year will reduce primary deficits by $3.3T over the period to 2035, while interest payments will fall by an additional $700B. The overall effect of the levies on debt levels is about a third higher than the $3T estimated by the CBO based on measures announced between January and mid-May. The impact of tariff revenue is expected to dull the fiscal hit from Trump's One Big Beautiful Bill Act, which is projected to increase debt levels by $4.1T over the period.
-Canada has lifted billions of dollars' worth of retaliatory tariffs on US goods to reduce economic tensions with the US. Prime Minister Mark Carney announced that Ottawa would remove the 25% tariff it has imposed on many US goods since March, but reciprocal steel and aluminum duties would remain in place. The measures will come into effect on September 1, marking the latest episode in a months-long trade battle between the US and Canada, which was strained in March when Trump imposed duties as steep as 25% on Canadian exports.
-California Governor Gavin Newsom has taken his criticism of US President Donald Trump to a new level by using his all-caps, idiosyncratic style to troll him on social media. Newsom's aggressive campaign, including posts declaring "DONALD IS FINISHED — HE IS NO LONGER 'HOT'" and artificially-generated images of himself carrying an American flag, is generating buzz and drawing critical commentary from Fox News presenters and conservatives. This aggressive campaign is energizing some Democrats concerned about the party's failure to mount an effective pushback against Trump. Veteran Democratic strategist Bob Shrum believes Newsom's approach is born out of frustration with the president and a determination to find new ways to fight back.
-Meta, a social media company, is set to license technology from artificial intelligence start-up Midjourney to improve its products and services. The move follows Meta's shift towards third-party collaborations to stay competitive. The technology will be used in the development of multimedia AI generation features for its apps, as CEO Mark Zuckerberg expects AI-generated content to become more prominent on the platform. The collaboration will involve world-class talent and collaboration with industry leaders.
-China has refused to disclose details of its plans for a "mega" embassy in London after the UK demanded more information about greyed-out areas in its drawings. The Chinese government argued that the request was not appropriate and that the level of detail provided was sufficient for understanding what was permitted. The Chinese government also opposed a request for a wall around a paved area in front of the building to ensure safe access. The UK's deputy prime minister, Angela Rayner, has demanded unredacted drawings or a comprehensive identification of withheld parts.
-The FBI has conducted a raid on John Bolton's home in Bethesda, Maryland, following his criticism of Donald Trump. Bolton, who served as Trump's national security adviser during his first term, has become a vocal critic of the US president. The search was related to "classified documents" and the FBI had a "broad concern" about Bolton. Vice-president JD Vance stated that the raid was related to "classified documents." Trump, who had previously expressed his disapproval of Bolton, said he did not know about the raid. The raid follows Trump's repeated vows during his 2024 campaign to seek retribution against his political opponents. The relationship between Trump and Bolton, who served as US ambassador to the UN under George W Bush, fell out after Bolton left his post in September 2019. Trump has also been criticizing Bolton for criticizing Trump's approach to brokering a peace deal between Russia and Ukraine.
NEW YORK TIMES
-Corporate America has developed defenses against corporate raiders like Carl Icahn and Nelson Peltz, but now faces a new investor: the US president. President Trump has inserted the government into US companies, taking stakes in US Steel and pushing for a cut of Nvidia's and Advanced Micro Devices' revenue from China. The Pentagon has also taken a 15% stake in MP Materials and Intel agreed to allow the US government to take a 10% stake in its business, worth $8.9 billion.
-Ukrainian President Volodymyr Zelensky is set to meet with Vice President JD Vance in the Oval Office. Vance warned Zelensky to "behave" and not to say anything, which the Ukrainian leader chuckled at. This is not the first time Vance has addressed Zelensky during a diplomatic summit. In February, Vance criticized Zelensky for disrespecting the US and not thanking Ukraine for military assistance. The jovial tone of the meeting highlights the importance of Zelensky's actions in influencing Trump's approval.
-California Governor Gavin Newsom has signed two redistricting bills, a response to the Republican-led map passed by Texas at the request of President Trump. The move will put California in a national campaign as Democrats and Republicans vie for control of the House of Representatives. Newsom, a potential presidential candidate, will be at the forefront of a partisan fight against President Trump. He emphasized neutralizing the situation in Texas and giving the American people a fair chance.
-A federal judge has ordered the removal of immigrant detainees from a Florida Everglades facility, Alligator Alcatraz, and the dismantling of much of the facility. The ruling rebuked the state and federal governments for not considering environmental harms before building the facility. The judge gave both branches 60 days to move out detainees and remove fencing, lighting, and power generators. The decision is a major legal setback for the facility, the nation's first state-run facility for federal immigration detainees, which has faced numerous lawsuits and complaints.
-Lisa Cook, a former Federal Reserve chair, has consistently voted with Jerome H. Powell, the chair, on interest rate cuts last year and this year. However, she is often viewed as a "dove" by some observers. In a November speech, Cook suggested that the Fed should continue to lower interest rates, but the pace of cuts would depend on economic data. In June, she warned that high inflation after the pandemic could make firms more willing to raise prices and consumers more likely to expect high inflation to persist. Cook, a daughter of a hospital chaplain and nursing professor, grew up in Georgia and earned an undergraduate degree from Spelman College and another at Oxford University.
-President Trump has been aggressively expanding his power since taking office, asserting the right to override spending decisions by Congress, dismiss leaders of independent agencies, and push through legal and constitutional barriers on issues like immigration and birthright citizenship. He has also used the government to pursue his campaign of retribution against political and personal foes, instigating criminal investigations, demanding large payments, revoking security clearances, and dismissing federal employees. However, when Trump called for the resignation of a Federal Reserve governor, it marked the merging of these two defining features of his second term. The move came after Bill Pulte, the director of the Federal Housing Finance Agency, found that Cook appeared to have falsified bank documents to obtain favorable mortgage loan terms.
- Thailand's former prime minister, Thaksin Shinawatra, has won a significant legal victory after a court dismissed a case accusing him of insulting the nation's monarchy. The case, which was indicted last year, was the most high-profile to be charged with violating the royal defamation law, which is one of the world's harshest and has long been used to quash dissent. Thaksin faced a maximum sentence of 15 years in prison. The charges were seen as politicized and the latest salvo in a decades-long clash between Thaksin and Thailand's royalist-military establishment. The Criminal Court in Bangkok ruled that Thaksin's interview could have been edited in a way that did not fully represent his remarks and that he did not specifically mention the monarch at the time.
NEW YORK POST
-Ghislaine Maxwell, a British socialite and now federal prisoner, has shared her relationship with convicted pedophile Jeffrey Epstein in an interview with President Trump's Department of Justice. Maxwell, 63, described her connection to Epstein as romantically strung-along while serving as "general manager" of the late millionaire pedophile's real estate portfolio. In her two-day interviews last month with Deputy Attorney General Todd Blanche in Tallahassee, Fla., she revealed that the Sept. 11, 2001, terror attacks were when she realized they would never have a romantic future.
-The Defense Intelligence Agency (DIA) director, Air Force Lt. Gen. Jeffrey Kruse, was fired after a classified assessment of US strikes on Iran was leaked to the media. The assessment suggested that US strikes on Iran only set back the rogue nation's nuclear program by a few months. The DIA's classified, "low confidence" estimation of the effectiveness of the June 21 airstrikes on Iran's Fordow, Isfahan, and Natanz nuclear facilities was leaked to CNN three days after American B-2 stealth bombers and cruise missiles bombarded the sites. The document, based on limited intelligence gathered the day after the strike, reportedly indicated that the Iranian regime could bring its nuclear program back online as quickly as one to two months. The preliminary assessment also suggested that Iran's stockpile of enriched uranium was not destroyed by the airstrikes. Defense Secretary Pete Hegseth reportedly fired Kruse over a "loss of confidence" in the lieutenant general.