Trump kicks off new fight with Powell

Business & Economy

The Big Story

Trump goes after Powell

President Trump is dishing out some heat to Federal Reserve Chair Jerome Powell after the central bank kept interest rates steady Wednesday.

Trump on Wednesday accused the Fed and Powell of allowing inflation to spiral to four-decade highs in the aftermath of the COVID-19 pandemic and recession.

Trump frequently criticized the Fed’s monetary policy during his first term and recently said he knows how to handle interest rates better than the central bank.

As the Fed started cutting interest rates last fall and loosening policy after tightening it in response to the post-pandemic inflation, Trump softened his criticisms of Powell, saying that he’d let him serve out his term.

But Trump turned the heat back up on Powell last week.

“I think I know interest rates much better than they do, and I think I know it certainly much better than the one who’s primarily in charge of making that decision,” Trump told reporters last week, ostensibly referring to Powell.

Powell said during Wednesday’s press conference he’s had no contact with Trump, despite his public remarks.

The Hill's Sylvan Lane and Tobias Burns have more here.

Welcome to The Hill’s Business & Economy newsletter, we’re Aris Folley and Taylor Giorno — covering the intersection of Wall Street and Pennsylvania Avenue.

Did someone forward you this newsletter? Subscribe here.

Essential Reads

Key business and economic news with implications this week and beyond:

Trump bashes Fed after bank doesn’t cut rates

President Trump ripped the Federal Reserve and the man he appointed to lead it Wednesday after the central bank kept interest rates steady.

Full Story

White House aide says spending freeze isn’t being rescinded despite memo

The White House is claiming the Wednesday move by the Office of Management and Budget (OMB) rescinding a controversial order that froze a wide swath of federal financial assistance is not actually an end to curbing government spending.

Full Story

Trump Commerce pick slams China: ‘Stop using our tools to compete’

Howard Lutnick, President Trump’s nominee to lead the Commerce Department, slammed China for allegedly using U.S.-manufactured technology to compete with American artificial intelligence (AI) firms after Chinese AI startup DeepSeek took the internet and stock market by storm.

Full Story

Tax Watch

Welcome to Tax Watch, a new feature in The Hill's Business & Economy newsletter focused on the fight over tax reform and the push to extend the 2017 Trump tax cuts this year.

Reconciliation may stifle Trump's plan to scrap taxes on Social Security

President Trump told Republicans during a party retreat in Florida this week that he wants a bill that eliminates taxes on tips, overtime and Social Security — all promises he made on the campaign trail that go beyond what’s expiring in the 2017 Trump tax cuts.

However, making changes to Social Security in a reconciliation bill, which is the more restrictive legislative format that Republicans are pursuing for their party-line bill, is off limits, legislative experts told The Hill.

“Trump is not going to get his tax-free Social Security benefits in reconciliation because that’s not allowed,” Tax Policy Center (TPC) senior fellow Howard Gleckman told The Hill.

“You do [reconciliation] for taxes, for mandatory spending except Social Security, and sometimes they’ve figured out ways to do it for discretionary spending, but it’s not intending for [that].”

A TPC analysis found that getting rid of the Social Security tax would advantage middle-class and upper-middle class households over lower earners while accelerating the program’s insolvency.

— Tobias Burns

COMING UP

The Hill's Evening Report breaks down the day's big political stories and looks ahead to tomorrow. Click here to sign up & get it in your inbox

The Ticker

Upcoming news themes and events we're watching:

The gross domestic product (GDP) reading for the fourth quarter of 2024 comes out Thursday morning at 8:30 a.m. ET.
The National Association of Realtors releases pending home sales data for December on Thursday at 10 a.m.

In Other News

Branch out with more stories from the day:

Meta agrees to pay $25 million to settle lawsuit from Trump after Jan. 6 suspension

WASHINGTON (AP) — Meta has agreed to pay $25 million to settle a lawsuit filed by President Donald …

Full Story

Good to Know

Business and economic news we've flagged from other outlets:

'Not a buyout': Attorneys and unions urge federal workers not to resign (NPR)
OpenAI Is Probing Whether DeepSeek Used Its Models to Train New Chatbot (The Wall Street Journal)
Elon Musk Lackeys Have Taken Over the Office of Personnel Management (Wired)

What Others are Reading

Top stories on The Hill right now:

Trump orders preparation of Guantánamo Bay facility to house migrants

President Trump signed a memo on Wednesday to prepare a massive facility at Guantánamo Bay to be used to house deported migrants. Read more

Fetterman: RFK Jr.’s nomination in trouble after rocky hearing

Sen. John Fetterman (D-Pa.), who was thought to be open to voting for Robert F. Kennedy Jr.’s nomination to head the Department of Health and Human Services, now says the nominee is in serious trouble after his rocky confirmation hearing. Read more

What People Think

Opinion related to business and economic issues submitted to The Hill:

What would Karl Marx make of memecoins?

You're all caught up. See you tomorrow!

Topics

Watch live: Fed's Powell gives first remarks under new Trump admin

Federal Reserve Chair Jerome Powell is holding a press conference Wednesday afternoon, the first since President Trump began his second term. Powell, who is expected to serve out the rest of his ...
The Hill - 23h
Trump's executive actions kick off race to courts. It's just the beginning.

President Trump's wave of executive actions signed soon after taking office has already sparked at least half a dozen lawsuits.
CBS News - 6d
Border, Asylum, Citizenship: Trump Kicks Off Vast Immigration Changes

More is coming, but many directives will take time to be implemented or will face political, legal or practical obstacles.
The New York Times - Jan. 23
The U.S. dollar slumps as Trump 2.0 kicks off with no immediate tariffs

Why President Donald Trump’s Inauguration Day led to a weakening of the U.S. dollar, according to BofA.
MarketWatch - Jan. 21
Republicans kick off race to confirm Trump nominees

Senate Republicans are kicking off their race to quickly confirm President Trump’s Cabinet nominees, and they’re starting with his national security team. Senators began Monday evening by ...
The Hill - Jan. 21
Trump set to be inaugurated, kicking off 100-day rush

President-elect Trump is set to be sworn in at the Capitol on Monday, solidifying his stunning return to the White House and kicking off what is expected to be a busy 100-day rush focused on a ...
The Hill - Jan. 20
Senate to kick off hearings for key Trump nominees

The Senate is kicking off confirmation hearings for President-elect Trump’s cabinet nominees this week, with a slew of his picks — some controversial, others with strong support — set to appear ...
The Hill - Jan. 13
Senate braces for 'train wreck' as hearings kick off for Trump Cabinet picks

The Senate is slated to hold more than a dozen hearings this week for President-elect Donald Trump’s Cabinet picks, with the hope of confirming them quickly.
NBC News - Jan. 13
Democrats kick off fight to protect ObamaCare subsidies in new Congress

Democrats in the House and Senate reintroduced legislation Thursday to permanently extend enhanced subsidies to help people afford insurance premiums on ObamaCare plans. Led by Sens. Jeanne ...
The Hill - Jan. 9