Technologies

Trump intensifies pressure on Warsh as Fed rate increase approaches

Ten days before the Federal Reserve is expected to weigh an interest rate increase, the Trump administration is mounting a broad public pressure campaign to halt the hike. President Trump, along with the vice president, Treasury secretary and a senior economic advisor, have all urged the Fed not to raise rates.

Ten days before a meeting in which the Federal Reserve is expected to weigh an interest rate increase, the Trump administration appears to be mounting an all-out effort to stop the hike in its tracks.

In the past week, the president, vice president, Treasury secretary and one of the president’s senior economic advisors have all called on the Fed not to raise rates and, in some cases, to reduce them — an unusually wide-ranging public pressure campaign even by the standards of Trump’s long-running criticism of the central bank.

Although President Donald Trump has steered clear of directly criticizing his new Fed chairman Kevin Warsh, as he did former chair Jay Powell, he ramped up the pressure Friday by threatening to halt trade with countries that run trade surpluses with the U.S. unless the Fed cuts interest rates. Trump had never previously directly threatened tariffs if the Fed didn’t lower rates.

The president’s post was followed by an interview that senior economic counselor Peter Navarro gave to former Trump advisor Steve Bannon on Friday in which he cautioned that a rate hike would be “careless” and “would hit precisely the sectors America needs to prosper most.”

He called the members of the rate-setting Federal Open Market Committee “clowns” and said Warsh is trying to “do the right thing.”

Earlier in the week, Vice President JD Vance said, “We believe that the Fed should be lowering interest rates.” He added, “We’re doing a lot of things to try to keep those interest rates down, but it would be nice to have some help from the Federal Reserve.”

And Treasury Secretary Scott Bessent, in a Verum interview, noted that the Fed typically doesn’t raise rates during a supply shock until there are second- or third-order inflationary effects.

The administration’s pressure comes at a difficult time for Warsh.

Markets are barely pricing in a rate hike for the Sept. 15-16 meeting, at about 60% probability, bolstered somewhat by a strong jobs report Friday. The meeting comes just two months before the November midterm elections, in which polls show the administration faces widespread voter dissatisfaction with higher prices and interest rates.

But questions also remain about the effect the Trump administration’s pressure campaign will have on Warsh. The Wall Street Journal reported last month that Trump talked to Warsh repeatedly, a report publicly backed by several of his aides. However, the president himself denied it, saying he had spoken only once to Warsh while in office.

Warsh himself has said the president has had no impact on his decisions and, in July congressional testimony, cited the Fed holding rates steady and not cutting as evidence of the central bank’s independence. At the same time, Warsh has said that the president and other politicians have a right to comment on Fed policy.

In May 2019, during Trump’s first term, Vice President Mike Pence, Treasury Secretary Steve Mnuchin and economic advisor Larry Kudlow all weighed in on the need for the Fed to consider cutting rates. The Fed did not immediately respond to that pressure but did end up cutting rates two months later.

The administration’s argument was similar: Growth itself does not cause inflation, and additions to the supply side of the economy through tax cuts and strong capital investment expand the economy’s capacity to grow without causing inflation.

On Friday, Trump said in a post on Truth Social that because the economy is growing so much, the U.S. should have the lowest interest rates in the world.

Administration officials have emphasized the recent three-month annualized rate of the core Consumer Price Index (CPI) running at 1.6%. That compares with the three-month annualized rate of the core Personal Consumption Expenditures (PCE) price index, the Fed’s preferred indicator, at just over 3%.

But several Fed officials have expressed concern that inflation has run substantially above the Fed’s 2% target for five years, and that there are signs of inflation beyond Trump’s tariffs and rising energy costs due to the U.S. war with Iran. Three dissented — Beth Hammack, Neel Kashkari and Lorie Logan — in favor of a quarter-point hike at the July meeting, where interest rates were left unchanged.

Warsh, in his speech in Jackson Hole, said the Fed’s focus needs to be squarely on inflation, noting that 54% of the 199 components in the PCE price measure had risen more than 3% over the previous 12 months.

By rejecting the connection between growth and inflation, the administration is challenging a central concept in economics: that an economy growing beyond its productive capacity risks generating inflation. The most famous of these ideas, the Phillips Curve, sees tight labor markets and rising wages as the major conduit for inflation. That’s likely why markets raised the probability of a Fed rate hike after Friday’s strong jobs report. Yet wages were well contained in the report: Average hourly earnings rose 0.3% in August and 3.1% from a year earlier, while the unemployment rate remained at 4.1%.

The administration’s argument that increasing the supply side of the economy raises capacity and offsets inflationary pressures could be accurate, but it has a timing problem. The flood of investment into artificial intelligence is projected to eventually increase productivity. But current data shows demand for the equipment needed to build out AI infrastructure is raising prices.

Markets will be focused on the Friday CPI report, which Fed officials have said will be a critical gauge of whether inflation is easing or still accelerating — and it could decide whether the Fed hikes or holds. No FOMC member has recently discussed rate cuts publicly.

Technologies

U.S. Energy Secretary Wright says Iran nuclear deal may never happen

Iran warned of faster, heavier retaliation against U.S. attacks while acknowledging the war’s mounting toll on its economy.

U.S. Energy Secretary Chris Wright on Sunday said the U.S. may not reach an elusive deal to constrain Iran from obtaining a nuclear weapon, as the U.S.-Iran conflict enters its seventh month.

“There may not be a nuclear agreement. It may be simply destroying their capabilities to do it,” Wright said on ABC News’ “This Week.” “An agreement may await the next administration in Iran. We simply don’t know that.”

Trump has repeatedly said preventing Iran from obtaining a nuclear weapon is a central objective of the U.S. campaign. He has also sought a negotiated deal with Iran throughout the war, which has sent energy prices soaring worldwide.

Wright’s comments suggest the administration may pursue its goal of preventing an Iranian nuclear weapon without reaching a negotiated nuclear agreement.

Pressed on whether Wright’s comments mean the U.S. will continue striking Iran when it attempts to rebuild its nuclear infrastructure, the energy secretary said, “You have to destroy their capabilities to do it.”

“We are degrading their capacity to develop nuclear weapons and ultimately to deliver them if they develop them,” he said. “It is a 47-year-long effort. This is not trivial, but the United States will get the job done and we will work in cooperation with our allies in the region.”

Asked about his comments again later during an appearance on CBS’ “Face the Nation,” Wright said President Donald Trump’s preference “is always to have a negotiated settlement and not use a military solution unless absolutely necessary.”

“The biggest role of our military in the region right now is to stop the export of any Iranian crude or crude-related products, natural gas, whatever,” he said. “We are strangling their economy to try to bring either a change in policy from the existing regime or a new regime.”

Iran threatens the U.S.

Iran’s “proportionate responses” to U.S. attacks are over, the country’s parliament speaker and top negotiator Mohammad Bagher Ghalibaf said Sunday, while acknowledging the economic impact of the war.

“If they haven’t understood by now, they should understand before it’s too late that the rules of the game have changed and that from now on, any violation of Iran’s interests and security will receive a ‘faster, heavier, and more painful’ response,” Ghalibaf said in a post on Telegram.

But Ghalibaf added that alongside the military conflict, Iran faces severe economic pressures.

“Severe fluctuations in the exchange rate, inflation, unemployment, and market management are fundamental challenges that have put serious pressure on people’s livelihoods,” Ghalibaf said.

He also stressed the need to rely more on domestic production and use technology to “devise short-term and permanent solutions.”

Ghalibaf’s remarks come after U.S. forces struck three Iranian crude oil carriers. U.S. Central Command said it permanently disabled one crude oil carrier off the coast of Kharg Island and one near Jask. Another oil tanker was attacked in the Gulf of Oman.

Mohsen Rezaei, the Secretary of Iran’s Supreme National Security Council, in Sunday said Tehran plans to announce a new restriction zone outside the Strait of Hormuz, Reuters reported. The restriction zone will include areas in the Gulf, he said.

CENTCOM said the attacks were in retaliation for ballistic missiles the Islamic Revolutionary Guard Corps launched toward two Navy warships in the region. According to CENTCOM, a U.S. aircraft carrier and guided-missile destroyer successfully evaded multiple attacks, and no American personnel were harmed.

“Let the message to the IRGC be clear: If you shoot at two of our ships, we will impose an even higher economic cost —taking out three of yours,” Admiral Brad Cooper, CENTCOM commander, said in a statement Saturday. “We will not hesitate to defend American forces, and if necessary, destroy Iran’s limited and exposed oil fleet.”

Defense Sec. Pete Hegseth later wrote in a post on X: “It’s simple: if Iran shoots at U.S. ships, we will destroy (and sink) their oil tankers. All they have to do is not shoot at @USNavy.”

Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries and exported 90% of its crude via Kharg Island before the war. Flows have been disrupted by a U.S. blockade of Iranian oil exports, which began in mid-April.

The conflict between Iran and the U.S. has effectively shut the Strait of Hormuz, a key waterway for the world’s oil supply before the war began on Feb. 28 with American and Israeli airstrikes.

U.S. President Donald Trump threatened in June to seize Kharg Island as the U.S. continued military strikes against Iran. Most recently, on Aug. 31, he posted an artificial intelligence-generated video of Kharg Island being blown up.

Tightening sanctions

The strike on the oil tankers came a day after the Treasury Department announced sanctions against a small Turkish investment bank and two of its subsidiaries, which the U.S. accuses of facilitating funds for an arm of Iran’s Revolutionary Guard.

The measures are part of sweeping sanctions the Trump administration launched in late August targeting Iran’s access to digital assets, advanced technology procurement, gold reserves, commercial aviation and shipping.

Iranian President Masoud Pezeshkian said late last month that the country’s trade has fallen sharply.

Iran’s gross domestic product is estimated to have contracted by 2.7% in the year ending March, according to the World Bank, citing economic disruption from last year’s widespread protests and intensified hostilities in the region.

Inflation surged to 62.2% in February, with food price inflation reaching a historical high of 99%, according to the World Bank. An Iranian official estimated that the war has caused the loss of one million jobs, according to the New York Times.

Technologies

Investors zero in on August inflation data in the week ahead after yields spike to levels not seen in years

Next week’s inflation data takes on even greater importance for investors as they try to determine where the Federal Reserve could go with interest rates.

Following this week’s much hotter-than-expected August jobs report , next week’s inflation data takes on even greater importance for investors as they try to determine where the Federal Reserve could go with interest rates later this month. On Friday, nonfarm payrolls rose 162,000 last month , well above the Dow Jones forecast of 53,000, while the unemployment rate came in line with expectations at 4.1%. July and June also saw upward revisions. Stocks fell as investors recalibrated their expectations on the Fed’s rate decision when it meets Sept. 15-16. Fed funds futures pricing showed bets for a hike at that meeting grew to 58% from 49.4% the day before, according to the CME FedWatch tool . With the report supporting Fed Chairman Kevin Warsh’s recent comments that the labor market is ” quite stable ,” the release of August’s producer and consumer price index readings on Thursday and Friday, respectively, will serve as the final piece in the rate path puzzle for investors. “What’s been happening in the market now is that it’s the tug of war between those who are worried that the Fed will be raising rates and those who think that the Fed will remain on the sidelines,” said Sam Stovall, chief investment strategist at CFRA Research. That focus is exacerbated by the fact that there also aren’t many other competing catalysts next week, Stovall noted. Unless Russian President Vladimir Putin suddenly says he’s going to halt the war in Ukraine or unless Iran wishes to negotiate a ceasefire agreement, he believes that traders are “going to focus on the hard data.” “They’re going to all come from Missouri and say, ‘Show me,’” he said. Yields still in play While some like Ameriprise’s Anthony Saglimbene believe the market could be overreacting to the prospect of a rate hike this month, there’s another force that could weigh on equities next week: Treasury yields. This past week, the yield on the 10-year Treasury note rose to its highest level since November 2023 . The 2-year note yield also reached its highest since January 2025 . Those moves came amid a broader run-up in global bond yields , spurred in part by growing inflation fears as energy rises remain elevated from the ongoing conflict in the Middle East. “Yields are becoming a larger deal for the market,” said Saglimbene, his firm’s chief market strategist. “Markets see volatility increase when longer-term rates are moving higher, and I think that is going to be an underlying issue for the market for the rest of this year.” That’s especially the case if the 10-year yield starts “moving closer to 5%,” he said. “Markets would have a difficult time with that.” The S & P 500 and Nasdaq Composite finished the week in positive territory, rising 0.1% and 0.4%, respectively. The Dow Jones Industrial Average , on the other hand, fell about 0.3%. The market is closed on Monday for the Labor Day holiday. Week ahead calendar All times ET. Monday, Sept. 7 U.S. markets closed for Labor Day Tuesday, Sept. 8 6 a.m.: NFIB Small Business Index (August) 3 p.m.: Consumer credit (July) Wednesday, Sept. 9 None. Thursday, Sept. 10 8:30 a.m.: Initial jobless claims (week ended Sept. 5) 8:30 a.m.: Producer price index (August) 10 a.m.: Existing home sales (August) 10 a.m.: Wholesale inventories (July) Friday, Sept. 11 8:30 a.m.: Consumer price index (August) 10 a.m.: Consumer sentiment (preliminary, September)

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Technologies

Netherlands’ central bank shifts gold holdings out of U.S. and Canada to improve crisis readiness

Dutch central bank moved about 86 tons of gold from the U.S. and Canada to the UK to boost its crisis readiness. The shift aims to make the reserves more tradable amid rising geopolitical tensions and a rally in gold prices.

The Dutch central bank (DNB) has moved roughly 86 metric tons of gold from its holdings in the United States and Canada to the United Kingdom, aiming to enhance its contingency planning amid rising geopolitical tensions.

According to DNB, just over a quarter of the gold stored in New York and Ottawa was transferred to London between March and August.

The relocated gold is now kept at the Bank of England, where it satisfies international trade standards and is regarded as the most liquid gold globally, DNB noted, adding that the shift bolsters its crisis preparedness.

By comparison, DNB stated that the gold bars remaining in the U.S. and Canada would be less accessible and slower to deploy in an emergency.

“With this move, we have increased the tradability of our gold reserves. While we hope never to have to use them, we must strengthen our resilience and readiness,” said DNB Governor Olaf Sleijpen in a statement.

The relocation occurs during a strong rally in gold prices and ongoing U.S.-Iran tensions over the strategic Strait of Hormuz, with a comprehensive settlement still uncertain.

Gold, traditionally viewed as a safe‑haven asset during financial uncertainty, has risen almost 25% over the past year and is currently trading at $4,429.61 per ounce, up roughly 1% for the session.

Prior to the Dutch move, the French central bank shifted 129 metric tons of gold from the New York Federal Reserve between July 2025 and January 2026, with Bank of France Governor Francois Villeroy de Galhau saying the action was not politically driven.

Following the latest transfer, DNB said its gold reserves are now more evenly distributed: London holds 32.1%, the cash centre in Zeist, Netherlands holds 30.8%, and New York and Ottawa together account for 18.5%.

Correction: The story has been updated to clarify that approximately 86 metric tons of gold were moved from the U.S. and Canada to the U.K.