Fresh Attack on Powell
In a dramatic escalation of the Trump administration’s attacks on the Federal Reserve, Chair Jerome Powell says the Justice Department has served the central bank with grand jury subpoenas and is threatening a criminal indictment, Amara Omeokwe reports.
In his statement, Powell said the action stemmed from his testimony to Congress on ongoing renovations of the Fed’s headquarters but it’s “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.” Read More
A Senate Banking Committee member, Sen. Thom Tillis (R-NC), said he was going to block administration nominees in response.
- “If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question,” Tillis said. Read More
President Donald Trump has repeatedly called for aggressive rate cuts and repeatedly mused about firing Powell. Trump has also sought to fire Fed Governor Lisa Cook.
Homeland’s Tough
House appropriators have moved closer to being able avoid another government shutdown, releasing the text of two more spending bills that can advance to the floor this week.
Equally noteworthy, though, is what they didn’t release: the bill that funds the Department of Homeland Security.
The lawmakers working on the bills had been intending to get DHS spending nailed down before completing their work with a mini omnibus combining transportation, health, and military spending, Ken Tran reports.
The snag comes as America’s attention has turned toward Minneapolis, where a federal immigration agent shot and killed a woman in her car, spurring days of marches and angry debates. Yesterday, Homeland Security Secretary Kristi Noem said hundreds more agents are headed to Minnesota.
Still, lawmakers from both parties have said they want to finish FY26 appropriations or pass a partial stopgap before existing funding runs out Jan. 30.
- “We went through the longest government shutdown in American history last year. I don’t think we need to repeat it,” Sen. Mark Warner (D-Va.) said on CNN’s “State of the Union” yesterday.
Subscribers, read more in this morning’s BGOV Budget and dig deeper on the details of the spending bills that will be taken up this week:
- IRS Dodges Steep Budget Cuts in Bipartisan Funding Proposal
- International Aid Programs Would Avoid Deep Cuts in Funding Bill
- Court Security, Defenders See Funding Hike in Bipartisan Deal
Banking Oversight
An internal FDIC memo says the regulators will implement a proposed rule on bank exams before it’s finalized, Evan Weinberger reports.
The move is part of a broader push to roll back rules for banks across the Trump administration. Typically, federal regulators would wait until after the full notice-and-comment rulemaking process was complete.
To critics, easing up on exams would open the door to another financial crisis. “This essentially dismantles bank supervision as we know it,” said Phillip Basil, the director of economic growth and financial stability at Better Markets and a former Fed official. Read More
Eye on the Economy
Last week’s data documenting American companies’ ongoing low-hiring environment adds an extra reason to pay attention to what New York Fed President John Williams has to say in a speech later today.
The New York Fed does its own consumer survey, and in the most recent one, more respondents said there was a high probability of losing their jobs over the next year, and they expressed a perceived lower probability of people needing jobs being able to find one.
Williams is to deliver keynote remarks at the Council on Foreign Relations.
About the Maduro Judge
One of the unusual things about the judge overseing the case against Venezuela’s Nicolás Maduro is how experienced he is, as Mike Vilensky explains after talking to neuroscientists and people who’ve spent time in Judge Alvin Hellerstein’s courtroom.
At the age of 92, Hellerstein “is sharper than many younger judges,” said Michael Hausfeld, an attorney who appeared before Hellerstein last week.
Francis X. Shen, a professor of neuroscience and law at the University of Minnesota and Harvard, said that in old age people tend to gain “crystallized intelligence, i.e., wisdom” while losing “fluid intelligence, i.e., the ability to process information quickly.”
“This is why a 16-year-old should help you with the iPhone, but a 66-year-old should help you with retirement planning,” Shen said.
There are at least 157 federal judges who are 85 or older—and at least 63 of them are 90 or older, according to updated data from the Federal Judicial Center. Read More
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