|
Programming note: Look for your next Daily Read on Tuesday, September 2 after US Labor Day weekend.
Market Backlash: Trump’s Fed Gamble Risks Pushing Key Bond Rates Even Higher (Bloomberg)
Donald Trump’s unprecedented and escalating attack on the Federal Reserve runs the risk of backfiring by hitting financial markets and the economy with higher long-term borrowing costs. For all the Fed’s power over short-term interest rates, it’s the 10-year Treasury yield — set in real-time by traders around the world — that largely determines what Americans pay for trillions of dollars of mortgages, business loans and other debts.
Even as Fed Chair Jerome Powell signals he’s ready to start easing monetary policy as soon as next month, those rates have been stubbornly high for other reasons, including that tariffs are threatening to worsen still-elevated inflation.
Latest on Fed Fight: Lisa Cook Preps Legal Challenge as Trump Seeks to Remove Her from Fed Governor Role (Bloomberg)
Forcing out Cook would give Trump an opportunity to secure a four-person majority on the Fed’s seven-member board. Cook’s term was not set to expire until 2038.
“Even if you don’t believe anything is going to come of this — that there won’t be any changes at the Fed — in the near term what it implies is, the risk premium for holding long-term Treasuries needs to go even higher,” Kathy Jones at Charles Schwab told Bloomberg TV.
While a president has never removed a Fed governor from office, one can do so for cause. Laws that describe “for cause” generally define the term as encompassing three possibilities: inefficiency; neglect of duty; and malfeasance, meaning wrongdoing, in office.
"His attempt to fire her, based solely on a referral letter, lacks any factual or legal basis. We will be filing a lawsuit challenging this illegal action,” Cook’s lawyer, Abbe Lowell, said in a statement. Previously, Cook said she would “carry out my duties to help the American economy as I have been doing since 2022.”
Janet L. Yellen, who was Jerome Powell’s immediate predecessor as Fed chair and later served as Treasury secretary under President Joseph R. Biden Jr., said she was “utterly alarmed” by the move.
“I feel this is now turned into an all-out assault on the Federal Reserve and an attempt by President Trump to really gain control over decision-making at the Fed,” she said.
Explainer: Can Trump Really Fire Fed Governor Cook? Here’s What the Law Says (Bloomberg)
Government Equity in Private Companies: US Commerce Secretary Howard Lutnick Suggests Looking at Defense Sector After Intel Deal (Bloomberg)
“Oh, there’s a monstrous discussion about defense,”Howard Lutnick said Tuesday in an interview when pressed on whether the administration was considering arrangements similar to that with Intel, including in defense.
Lutnick singled out Lockheed Martin Corp., claiming the company makes much of its revenue because of the US government. “They are basically an arm of the US government,” he said.
Losing Case: Judge Dismisses Trump Administration Suit Against Federal Bench in Maryland (New York Times)
In a scathing 39-page ruling, the judge, Thomas T. Cullen, called the suit “novel and potentially calamitous,” saying that the administration had simpler — and clearly more legal — ways to contest the standing order aside from bringing a suit against all 15 federal judges who sit in Maryland. The suit challenged a standing order intended to briefly slow down the government’s ability to deport undocumented immigrants.
Redistricting Latest: Judge Rules Utah Must Redraw Its Congressional Map, Frustrating Republicans (New York Times)
Control of Congress Watch: Democrats Weigh Mini-convention Before 2026 Midterms (Axios)
The event — a smaller version of the national conventions the party holds in presidential election years — would allow the party to fundraise and get media attention as it tries to win back both chambers of Congress next year.
Talk of France: French Premier Risks Government Collapse as Opposition Grows (Bloomberg)
Opposition to French Prime Minister Francois Bayrou’s government gained momentum on Tuesday, adding to the likelihood that it could be forced out in a confidence vote as soon as next month.
US Open Latest: Coco Gauff’s New Serve and a US Open Win Over Ajla Tomljanovic Built on Old Foundations (The Athletic)
Night one with Gavin MacMillan, the biomechanics expert charged with remodeling her serve, saw Gauff focusing hard on her form and her spins rather than her power. Gone were the attempts at 125-mph bombs. In their place, Gauff tried to stay out of trouble with twisting balls and big margins. Her ball toss, which has a tendency to veer to her right and cause her to collapse forward when serving, was more to her left and more effective for it.
Winner: US Open Fans Set to Buy More Than 500,000 Honey Deuce Cocktails, Generating $13M in Revenue (New York Times)
“It’s sold in carts, it’s sold on both levels of Armstrong, it’s at Grandstand, it’s sold on all levels of Arthur Ashe Stadium, it’s sold everywhere on the grounds,” said Daniel Zausner, the chief operating officer of the USTA Billie Jean King National Tennis Center who led the push for the Open to introduce a signature cocktail in 2006. In 2018, the Open began offering a frozen version, and this year a complimentary mini version of the drink will make an appearance at a pop-up bar in Grand Central Terminal.
Don't Miss Today's Daily Read Podcast: Click here to listen to the latest episode of the AI-generated companion of today's newsletter on Spotify. It's also available on Apple
Podcasts. Take a listen today.
NYC Broadway 'Must-See': See Musical About Brilliant, Complicated 1960s Star Bobby Darin (Just In Time Broadway)
Jonathan Groff and the entire cast and crew of 'Just in Time', now playing at Circle in the Square in Midtown Manhattan, have done an incredible job telling the story of Bobby Darin, one of America's great performers and songwriters.
But don't take my word for it. Mike Bloomberg and Patti Harris saw the show alongside Broadway legend Kristin Chenoweth last week. And their take is: "Go see it if you can."
|
