Author name: moderat ereport

A cartoon by Clay Jones. Related | Musk’s anti-woke AI chatbot goes full Nazi—then gets shut off

President Donald Trump is reportedly going to fire Federal Reserve Chair Jerome Powell, a likely illegal move to end the bank’s independence and install a new chair who would carry out Trump’s demand for an insanely low 1% interest rate. According to a White House official, Trump met with a group of GOP lawmakers Tuesday night to discuss a crypto bill and whether he should fire Powell. “The president asked lawmakers how they felt about firing the Fed chair. They expressed approval for firing him. The president indicated he likely will soon,” the official said. Trump even showed the lawmakers a letter he drafted to fire Powell, according to The New York Times. One of the GOP lawmakers present was Rep. Anna Paulina Luna of Florida, who posted on X Tuesday night that Powell’s firing was “imminent.” Federal Reserve Chair Jerome Powell “Hearing Jerome Powell is getting fired! From a very serious source,” Luna wrote after her meeting with Trump, later adding, “I’m 99% sure firing is imminent.” And on Wednesday, other GOP lawmakers publicly egged on Trump to give Powell the axe. “Today’s a great day to fire Jerome Powell,” Sen. Tommy Tuberville of Alabama wrote on X. But Trump, who has been railing on Powell for months, claimed on Wednesday that he isn’t firing him. “He’s doing a lousy job, but no, I’m not talking about that,” Trump told reporters. “Fortunately we get to make a change in the next, what, eight months and we’ll pick somebody that’s good.” And though Trump said that he hasn’t fully ruled out firing Powell, he added that it’s “highly unlikely” that he will. In yet another sign of his cognitive decline, Trump went on to tell reporters that he “was surprised he was appointed—surprised, frankly, that Biden put him in and extended him.” In actuality, it was Trump who appointed Powell in 2017. YouTube Video Banking experts say that if Trump does fire Powell, it will have devastating impacts for the economy. “We believe the market reaction would be large. The empirical and academic evidence on the impact of a loss of central bank independence is fairly clear: In extreme cases, both the currency and the bond market can collapse as inflation expectations move higher, real yields drop and broader risk premia increase on the back of institutional erosion,” Deutsche Bank head of FX research George Saravelos wrote in a memo. When Trump seemed likely to fire Powell in April, stock markets plummeted as investors panicked. The Dow Jones Industrial Average lost nearly 1,000 points in a single day, and the S&P 500 and NASDAQ each lost nearly 2.5% of their value amid the reports. Related | Trump thinks insulting Fed chair will fix broken stock market—somehow The similar situation happened after news broke Wednesday that Trump is again considering firing Powell, who has said that he is not leaving and that firing him would be against the law. But Powell’s term expires in May 2026, at which point Trump will be able to choose his successor. Democrats, meanwhile, are questioning the timing of Trump’s latest outburst against Powell. “Trump is willing to destroy the independence of the Fed and tank bond markets if it would get you to stop talking about his ties to Jeffrey Epstein,” Rep. Sean Casten of Illinois wrote on X. We’ll see if it works.

The lights are on at the Consumer Financial Protection Bureau across the street from the White House, and employees still get paid. But in practice, the bureau has been mostly inoperable for nearly six months. CFPB employees say they essentially spend the workday sitting on their hands, forbidden from doing any work by directive from the White House. The bureau is supposed to be helping oversee the nation’s banks and financial services companies and taking enforcement action in case of wrongdoing. During its 15-year existence, the CFPB has returned roughly $21 billion to consumers who were cheated by financial services companies. Related | Fraud victim ‘not hopeful’ for refund after Trump wrecks consumer protection agency Instead, its main function now seems to be undoing the rulemaking and law enforcement work that was done under previous administrations, including in President Donald Trump’s first term. One current employee, who spoke on condition of anonymity because the directive forbids staffers from speaking publicly about their jobs, said outsiders would be amazed at how little work is being done. Employees are reluctant even to talk to one another, out of fear that a conversation between two employees would be considered a violation of the directive. Another employee described the drastic shift in mission, from trying to protect consumers to doing nothing, as “quite demoralizing.” To gain an understanding of what is happening inside the CFPB, The Associated Press spoke with 10 current and former employees, as well as bankers and policymakers who used to interact with the bureau nearly every day but now say their emails and voicemails go into a black hole. The agency’s press office doesn’t respond to emails. Related | Agency that targets corporate crooks shuttered by Trump—of course The CFPB took a lighter approach to its mission in Trump’s first term but continued to pursue enforcement actions. Under President Joe Biden, the agency took an expansive view of its authority, targeting profitable practices by banks such as overdraft and credit card late fees, as well as investigating companies over credit reporting and medical debt. The bureau also turned a spotlight on Big Tech companies that have made inroads into financial services. For example, the CFPB ordered Apple to pay $89 million in fines and penalties for problems related to the Apple Card. Banks and the financial services industry felt the Biden CFPB acted too aggressively, particularly with a proposal to cut overdraft fees to $5 from the industry average of $27 to $35. The bureau estimated the move would save consumers roughly $5 billion a year. The proposal was overturned by Congress in April with Trump’s backing. Once Trump 2.0 began, the bureau became a main target of the Department of Government Efficiency, then run by Elon Musk, who posted on X that the CFPB should “RIP” shortly after DOGE employees became embedded at the agency. Through the bureau’s acting chief, Russell Vought, the White House issued a directive that CFPB employees should “ not perform any work tasks. ” Russell Vought at the White House on July 7. The administration then tried to lay off roughly 90% of the bureau’s staff, or roughly 1,500 employees. Courts have blocked those layoffs, but there is a feeling inside the bureau that the court rulings are only a temporary reprieve. Companies that committed wrongdoing, or had open investigations, have lobbied the bureau and the White House for their punishments to be rescinded. Last month, the CFPB rescinded an agreement under which Navy Federal Credit Union agreed to pay $80 million to settle claims that it illegally charged overdraft fees to its members, who include Navy servicemen and women, and veterans. In mid-May, the agency scrapped an order for the auto financing arm of Toyota to pay customers a total of $48 million for illegally bundling products onto car buyers’ auto loans. “Companies are lining up to get out of repaying harmed customers,” said Eric Halperin, former enforcement director at the bureau, who resigned earlier this year. The Associated Press sent a list of questions to the White House regarding President Trump’s vision for the CFPB. The White House did not respond. While the lack of new initiatives and the scuttling of old ones frustrate employees the most, they also note that even everyday tasks have largely fallen to the wayside. A report from the office of Sen. Elizabeth Warren, the senior Democrat on the Senate Banking Committee, found that the bureau is uploading roughly 2,200 complaints a day to its complaint database, compared to the roughly 10,500 complaints it was doing in the months before Trump took office again. Warren came up with the idea for the bureau when she was a law professor at Harvard University. The bureau did take an enforcement action on Friday. The pawn shop chain FirstCash Inc. agreed to pay $9 million to settle claims that it charged excessive interest rates on loans to armed service members, in violation of the Military Lending Act. FirstCash operates more than 1,000 stores. The bureau is going to be even further diminished in the coming months. The new budget law signed by Trump earlier this month cuts the CFPB’s funding by roughly half, meaning the bureau will be forced into mass layoffs. Senate Democrats are looking for ways to restore that funding. In the meantime, employees go about their mundane routine: They continue to check their email once or twice a day to see if any of their previous work has been slated for being undone. They wait to be laid off. The only constants are the silence from bureau political appointees or the “mini funerals” that happen every Friday, when another batch of employees who have decided to leave the bureau voluntarily have their last day. “I don’t think I’ll ever work in public service again,” said one current employee, who has been looking for a new job for the past three months.