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Trump Favors Short-Term Fed Pick to Preserve Powell Succession Options; BOE Cuts Rates Again
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President Trump said he would announce later this week his pick to fill an unexpected vacancy on the Federal Reserve’s board and that he was leaning toward a short-term appointment rather than nominating someone who could next year succeed Fed Chair Jerome Powell. Minneapolis Fed Bank President Neel Kashkari on Wednesday said recent signs the economy is slowing have bolstered the case for an interest-rate cut “in the near term.” And overseas, the Bank of England lowered interest rates Thursday ahead of the Federal Reserve potentially following suit next month.
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Trump Favors Short-Term Fed Pick to Preserve Succession Options
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Photo: Jonathan Ernst/Reuters
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Fed governor Adriana Kugler said last week that she plans to leave the board of the central bank this week, about six months before her term expires. Any Kugler successor would be able to complete that term, which runs to Jan. 31, and could stay on the board after that until his or her successor is confirmed to a new term that runs until early 2040.
Trump told reporters Wednesday he would “probably go with the temp,” referring to an option to name someone to the position for a matter of months rather than nominating someone who could next year succeed Fed Chair Jerome Powell.
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Kashkari Leans Toward Rate Cut as Concerns About Slowdown Grow
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Minneapolis Fed President Neel Kashkari said in an interview with CNBC that while it might not be known for a year or more whether new White House tariffs on trading partners will result in persistent inflationary pressures, the data in hand clearly show the economy is slowing. Kashkari’s comments are a sign of a growing support for rate cuts as soon as September.
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“That tells me, as one policymaker, I need to start leaning more on the data that I’ve got confidence in — the economy is slowing — and that means, in the near term, it may become appropriate to start adjusting the federal-funds rate,” Kashkari said.
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Bank of England Cuts Rates as Jobs Market Slows
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The Bank of England lowered its key interest rate for the fifth time in a year as it seeks to balance a recent pickup in inflation against a cooling jobs market, a challenge that also confronts the Federal Reserve.
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Fractured RBA Board to Come Together and Cut Rates
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The fractured and potentially heated debate that marked the Reserve Bank of Australia’s July policy meeting, ending in a surprise decision to keep interest rates on hold, will be replaced next week with a confident and unified vote by the monetary policy board to deliver the third-rate cut in this cycle.
Backed by compelling second quarter inflation data showing core price pressures nearing the center of the bank’s 2% to 3% inflation target, there is no longer any reason for further debate or delay, and the process of cutting rates steadily and cautiously can continue into the second half of the year. Read more.
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Trump Exempts Tech Firms That Invest in U.S. From 100% Chip Tariffs
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President Trump said he would impose roughly 100% tariffs on all chips coming into the U.S. but exempt tech companies that have promised to manufacture domestically, a big win for Apple and other electronics firms worried about new trade challenges.
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Trump Pledged to Bring Back Manufacturing. The Sector Is Sputtering.
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President Trump has claimed that his sweeping tariff regime will reshore American companies and revive manufacturing in the U.S. So far, that hasn’t happened. Economic activity tied to manufacturing has shrunk for most of Trump’s second term.
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Wanted: A $195,000 Economist With More Than a Ph.D. to Run the BLS
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The most high-profile job search in Washington this week is to fill the now-delicate role of overseeing the country’s jobs data. So what does it take to be a successful candidate?
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What Economy Are We Living In? Our Reporters Talk It Out
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Key Developments Around the World
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India’s Economy Faces Bumpy Road in Face of Steep Trump Tariff
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India’s growth outlook has been weighed by President Trump’s punitive tariff on the South Asian economy but there’s still hope negotiations will ease the impact.
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China’s Exports Keep Defying Expectations With Accelerating Growth
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China’s exports grew at a faster clip in July, showing that U.S. tariffs so far haven’t curtailed China’s export machine, although trade with America has fallen.
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German Exports to U.S. Fall for Third-Straight Month
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Germany’s goods exports to the U.S. slid further in June, as the impact of tariffs on the country’s export-oriented economy continued to bite.
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Trump Administration Fires Most of Puerto Rico Oversight Board
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7 a.m.: U.K. interest rate decision
8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
10 a.m.: Federal Reserve Bank of Atlanta President Raphael Bostic speaks at Florida Institute of CFOs virtual event
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10:30 a.m.: Federal Reserve Bank of St. Louis President Alberto Musalem speaks at Mississippi Delta event
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Shock Jobs Numbers May Push Fed to Take Up the Scissors, ING Says
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"Friday's U.S. jobs report was a wake-up call" and should lead to more rapid action by the Fed's monetary policymakers, ING's chief international economist James Knightley writes in a research note. Hiring slowed sharply over the summer, according to revised figures set out last week that suggested the American jobs market isn't as robust as once thought. Coupled with increasingly gloomy business surveys, that should jolt the Fed into faster action, Knightley says. Consensus is likely to build among the central bank's rate setters that they should begin cutting rates at September's meeting, Knightley says; the Fed would in that case likely continue cutting at subsequent meetings, he adds. Changes at the top of the Fed could next year bring about even faster rate cuts, Knightley says. — Joshua Kirby
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U.S. crude oil inventories fell last week as imports fell, exports rose, and refineries raised their capacity use, according to data released Wednesday by the U.S. Energy Information Administration.
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President Trump said there was a “good chance” he would meet soon with Russian President Vladimir Putin about the war in Ukraine, after an offer Russia made Wednesday during a trip to Moscow by special envoy Steve Witkoff.
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You probably haven’t looked for a job in a newspaper’s classified pages since the Bush administration—possibly the first one. It could be worth reviving this old-school strategy because many of the listings offer a way to bypass those dreaded online application portals.
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WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.
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