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The Supreme Court Just Became the Last Line of Defense for Fed Independence; Weak ADP Jobs Data Cements Rate-Cut Expectations
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The Supreme Court on Wednesday allowed Federal Reserve Governor Lisa Cook to keep her job for now and scheduled arguments in January to weigh President Trump’s bid to fire her. Meanwhile, the federal government shutdown entered a second day, with no sign of an imminent breakthrough that could get furloughed employees back to work and prevent layoffs. A weak U.S. private-sector payrolls report removed any lingering doubt among traders about whether the Fed will cut interest rates this month. And elsewhere, minutes published Wednesday by the Bank of Canada showed senior officials at the central bank believed a rate cut was warranted even though upside risks to inflation remained intact.
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Supreme Court Becomes Last Line of Defense for Fed Independence
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Photo: Mark Schiefelbein/Associated Press
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The Supreme Court provided the most meaningful check to date on President Trump’s effort to fire Federal Reserve governor Lisa Cook when it said she could remain in her job until it takes up her case in January.
A two-sentence order Wednesday provided Cook crucial breathing room even though it didn’t resolve the underlying legal question of whether Trump can oust her.
The Trump administration had asked the court to remove Cook before lower courts resolved her lawsuit fighting Trump’s dismissal attempt. The court granted similar requests the administration made for other agency commissioners Trump fired this year.
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BOC Cut Rates Despite Uncertainty On Inflation Outlook, Minutes Say
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Statistics Canada’s inflation report for August suggested the upside risks to inflation had diminished. But those risks “had not gone away,” said the central bank's minutes published Wednesday.
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U.S. Lost 32,000 Jobs in September, Says Payroll Processor
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The U.S. shed 32,000 private-sector jobs in September, payroll-processing giant ADP said on Wednesday. That is down from a revised loss of 3,000 in August. Economists polled by The Wall Street Journal had expected a rise of 45,000.
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U.S. Factory Activity Contracts at Slower Pace
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U.S. factory actibity contracted again, albeit at a slower pace as production moderately improved, according to a survey of manufacturing firms.
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What to Know About Trump’s Latest Tariffs
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President Trump’s tariff policies have taken numerous twists and turns this year.He has announced tariffs on branded or patented pharmaceuticals, heavy trucks and household furnishings, with a number of exceptions. He also re-upped his plan for 100% on films made outside of the U.S. It’s still too early to tell whether such duties will spur significant U.S. production, a key goal of the administration. Here is a roundup of where tariffs stand for major countries and sectors.
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White House, Lawmakers Float Ideas for Ending Govt Shutdown
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Hours into the government shutdown, the White House is issuing new threats, congressional leaders are digging in, and some rank-and-file Democrats and Republicans are searching for a way out.
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Trump Administration Freezes $18 Billion in NYC Infrastructure Funds
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8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
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8:30 a.m.: U.S. Employment Report
9:45 a.m.: US Services PMI
10 a.m.: ISM Report On Business Services PMI
11 a.m.: Global Services PMI
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Trump Keeps Blurring the Line Between Capitalism and Socialism
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President Trump likes to portray himself as the champion of capitalism standing up to the forces of socialism. A frequent target: New York City mayoral candidate Zohran Mamdani, whom Trump has called a “Communist Lunatic,” writes WSJ’s Greg Ip. Mamdani says he is a democratic socialist, not a communist. More to the point, the lines are blurring between capitalism as practiced by Trump and socialism as advocated by the likes of Mamdani. On Tuesday, Trump announced the launch of a federal website “TrumpRx” through which the public will be able to buy discounted drugs. This bears echoes of Mamdani’s proposal for city-owned grocery stories.
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Lack of BLS Data Expected to Turn Fed More Dovish
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The ADP report has a spotty correlation with the more comprehensive nonfarm payrolls. Still, it may end up being the Fed's proxy for the official data, Capital.com's Daniela Hathorn says. ADP reported a 32,000 job loss in September. Economists surveyed by WSJ forecast nonfarm payrolls at 51,000, up from August's 22,000, but the data scheduled for Friday is expected to be delayed until lawmakers agree on refunding the government. "The situation is less than ideal as markets want more than ever more clarity," Hathorn says. "If [Fed officials] take the ADP at face value, the outlook isn't great, and the FOMC could be more dovish than currently priced in," she says. — Paulo Trevisani
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The eurozone’s unemployment rate rose in August, strengthening the possibility that the European Central Bank will move next year to lower interest rates after a period of pauses.
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Inflation in Switzerland remained close to zero last month, according to figures released a week after the Swiss National Bank paused a series of rate cuts.
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South Korea’s headline inflation rebounded in September, lifted by higher services and food costs, but remained close to the central bank’s 2% target.
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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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