Fed chair suggests interest rate cut could come soonpublished at 18:49 British Summer Time
18:49 BST
Image source, Reuters
Trump has been pressuring the Federal Reserve to cut interest rates, a move which the US central bank has so far been cautious to do. But that could soon change.
Speaking to central bankers gathered at Jackson Hole in Wyoming last week, Fed chair Jerome Powell gave a boost to expectations that there will be an interest rate cut in September.
Economists and investors were already expecting borrowing rates to come down from their current 4.25 to 4.5% range. Recent weakness in the US jobs market raised those expectations further, but the impact on prices of Trump's sweeping tariffs had raised doubts.
Powell said the effects of tariffs on consumer prices were now "clearly visible" but said that there was a "reasonable" case to be made that inflation would be "relatively short lived - a one-time shift in the price level".
Central banks typically cut rates to boost growth if there are signs of slowing economy and falling employment, as it makes it cheaper for consumers and businesses to borrow.
But boosting growth has to be balanced with keeping a check on rising prices. Higher interest rates can help control inflation, which is often seen as a central bank's main priority.
Read more of our coverage here.
'We've never seen this before', investor tells BBCpublished at 17:58 British Summer Time
17:58 BST
Media caption,
What does Trump's decision to fire Lisa Cook mean for investors?
An investment expert tells the BBC that Trump saying he will fire Federal Board Governor Lisa Cook will likely end up in the court system.
Alonso Munoz, the Chief Investment Officer at Hamilton Capital Partners, says: "we've never seen this before".
The situation is causing anxiety for the investment community, Munoz adds.
Trump says job figures are going to be 'through the roof'published at 17:34 British Summer Time
17:34 BST
Trump is continuing his opening remarks at the cabinet meeting, he says new job numbers are going to be "through the roof".
Trump made headlines last month when he fired Commissioner of the Bureau of Labor Statistics Erika McEntarfer, after he claimed she had "RIGGED" jobs figures "to make the Republicans, and ME, look bad".
It sparked backlash from financial experts who fear the numbers - which are known for being politically independent - could be politicised.
Trump fires lead official on economic data as tariffs cause market drop
There is no inflation in the US - Trumppublished at 17:28 British Summer Time
17:28 BST
During his Cabinet meeting, Trumps says "there is no inflation" in the US and oil prices are down.
"Groceries are down, energy is way down" he says.
The Consumer Price Index (CPI) in July rose 2.7% on an annual basis. CPI tracks the changes in prices of everyday items like food goods and apparel.
Low inflation is one of the arguments he is trying to use to get the Federal Reserve to lower interest rates, but some contend lowering rates could hurt the economy.
"In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside - a challenging situation," Fed Chair Jerome Powell said at an event last week.
Central banks typically cut rates to boost growth if there are signs of slowing economy and falling employment, as it makes it cheaper for consumers and businesses to borrow.
Read more of our coverage on the Fed's interest rate policy here.
The Cabinet room's new lookpublished at 17:24 British Summer Time
17:24 BST
Bernd Debusmann Jr Reporting from the White House
Image source, Reuters
Image caption,
New gold trim has been placed on the wall behind the president and his team
There's been lots of redecorating here at the White House since Trump returned to office.
The Rose Garden has, for example, been paved over and equipped with yellow-and-white umbrellas and garden tables.
The Oval Office is now glittering and gold, with substantially more flags and art on the walls than was previously the case.
We see the Cabinet room much less often - and today we'll be seeing the changes that Trump has recently made to it for the first time.
According to one of today's "pool" reporters - from CBS, the BBC's US partner - the room now has gold-leaf trim around the doors and around the ceiling, as well as gold flourishes on the walls and gold plates on the fireplace mantel.
Trump often comments on his various projects at the White House - and it's highly possible that he will make sure to point out these changes to cabinet members and reporters alike.
Notably, in the last Cabinet meeting in July, Trump asked aloud if he would "gold leaf" the corners of the room.
It appears he has.
Image source, EPA
Image caption,
For comparison, the walls behind Trump and his team at his last Cabinet meeting were lacking in gold trim
Trump's Cabinet meeting beginspublished at 17:11 British Summer Time
17:11 BST
Image source, Reuters
Image caption,
Trump is sat between Marco Rubio and Pete Hegseth, as he starts his Cabinet meeting after a delay
After a delay, Trump's Cabinet meeting in the White House has just begun.
The US president is joined by Vice-President JD Vance, Defence Secretary Pete Hegseth, Attorney General Pam Bondi and other members of his adminsitration.
We'll be listening across and will bring you the latest developments as we get them. Stay with us.
Fed Governors can't be removed without cause, legal expert warnspublished at 17:08 British Summer Time
17:08 BST
Ana Faguy Reporting from Washington DC
Trump says he has "sufficient cause" to remove Cook from her position in the Federal Reserve Board of Governors following his accusations of mortgage fraud.
Robert Hockett, a law professor at Cornell Law School, thinks otherwise. He says the Fed was designed to prevent against this kind of political meddling, "Fed Governors can be removed only 'for cause,'" he notes.
“We have prioritised competence and stability over fleeting and ill-informed 'passions of the moment' in this all-important area," Hockett says.
"Now, Trump has found yet another pretext on which to attempt to remove a Fed Governor from office and, having failed in trying that strategy with Chair Powell, apparently thinks he has found a 'softer' target in Governor Cook, the first African American woman to serve on the Fed Board."
Hockett also thinks Cook's mortgage allegations are explainable. "As anyone with as chequered a history in real estate as Trump will know, someone's having two primary residences between which to commute is no closer to that than is a family's having two cars," he said.
Not the first time Trump has accused opponents of mortgage fraudpublished at 16:56 British Summer Time
16:56 BST
Image source, Getty Images
As we've just reported, Cook's lawyer says the governor will be filing a lawsuit against the US president and challenging the "illegal action".
Cook has been accused by the US president of making false statements on mortgage agreements. This not the first time the Trump administration has used mortgages to go after the president's opponents.
Trump previously accused two Democrats - California Senator Adam Schiff and New York Attorney General Letitia James - of committing mortgage fraud.
Texas Attorney General Ken Paxton, a Republican, has faced accusations but with three homes, not two. But he has not been targeted by the Trump administration.
As a reminder on the latest allegations against Cook, Trump says she "falsified bank documents and property records" in an attempt to get more favourable loan terms and lower interest rates.
The allegations were first made in a public letter from housing finance regulator, Bill Pulte, a Trump ally, to Attorney General Pam Bondi.
The letter says Cook obtained a mortgage on a Michigan home and certified she would use it as her "principal residence" within 60 days and for a full year.
The letter then says that two weeks later Cook purchased a condo in Atlanta and said that property would be used as her primary residence.
Cook firmly rejects Trump's accusations.
Cook to sue Trump over 'illegal' attempt to fire herpublished at 16:41 British Summer Time
16:41 BSTBreaking
Lisa Cook is planning to sue Trump over his decision last night to remove her from office.
Her lawyer, Abbe David Lowell, says the president "has no authority" to remove the governor.
"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,” he says in a statement.
From closed-door affairs to 'transparency': Meetings are different under Trumppublished at 16:38 British Summer Time
16:38 BST
Bernd Debusmann Jr Reporting from the White House
Image source, Getty Images
Here at the White House, Cabinet meetings were once considered closed-door affairs.
During the approximately two years I was covering the latter half of the Biden administration I only recall one cabinet meeting - in September 2024 - in which the press was invited for brief remarks.
At least two other cabinet meetings - in 2021 and 2022 - also opened to the press for opening remarks, a long-standing practice of previous administrations.
Things are different in the Trump administration.
This is his seventh cabinet meeting since January, and many have turned into extremely lengthy sessions, which are sometimes preceded by each cabinet member in the room taking turns pointing to perceived successes in their departments.
The open portion of one which I attended in March lasted 47 minutes. The most recent one clocked in at nearly two hours.
In his first three cabinet meetings alone, Trump took nearly 100 questions, on a extremely wide range of domestic and foreign policy topics.
Press Secretary Karoline Leavitt has repeatedly pointed to this as evidence that this administration is the most "transparent" in US history.
Reporters in the room - which are drawn from the day's press pool - aren't in any way limited in terms of what they can ask.
Judging from conversations I've had with reporters this morning, Lisa Cook and the US economy will be extremely high on the agenda today.
Cabinet meetings explained - in 80 wordspublished at 16:34 British Summer Time
16:34 BST
President Trump is set to meet with his Cabinet members shortly. It comes a day after he posted on social media that he has ordered the immediate removal of Lisa Cook. But what is a Cabinet meeting?
On a semi-regular basis the US president gathers his Cabinet members for a meeting to discuss his administration's agenda.
Trump has made the gatherings more frequent and more public than most presidents had done so before him.
At today's meeting will be Vice-President JD Vance, Defence Secretary Pete Hegseth, Attorney General Pam Bondi and other key figures in Trump's administration.
Trump has made a habit of granting access to press as the meeting wraps up, and takes questions from reporters.
We'll be keeping across the latest developments today, stay with us.
Trump's long-standing feud with the Fedpublished at 16:19 British Summer Time
16:19 BST
Bernd Debusmann Jr Reporting from the White House
To Donald Trump's detractors, the firing of Lisa Cook is the latest salvo in a wider battle to seek more influence over the Fed, which is essentially the US central bank.
The Fed is a favourite topic of Trump's when he addresses the press, often criticising its decision not to lower interest rates.
Trump reserves his harshest criticism for Fed chair Jerome Powell, whom he - as recently as yesterday - refers to as "too late Powell", saying interest rates should have already been lowered this year.
He occasionally uses more colourful language, such as "numbskull" and "stubborn mule".
Last month, he publicly bickered with over building renovations at the Fed building in Washington. He's repeatedly floated the idea of firing him, only to back away from the idea.
Removing Cook would be something of a victory for Trump, as it would allow him to nominate someone else to her position.
Earlier this month Federal Reserve Governor Adriana Kugler resigned, paving the way for Trump to nominate economic adviser Stephen Miran to the board. Miran must still be confirmed by the Senate.
Wall Street opens after Trump's battle with Fed escalatespublished at 16:11 British Summer Time
16:11 BST
Image source, Reuters
Wall Street has opened hours after Trump said he ordered the removal of one of the US central bank's governors.
The stock market follows developments at the Fed keenly and is one indicator of how investors feel about major policy changes.
Overall, they appear to be sceptical and are waiting to see if the sacking actually comes to pass.
Here is how trading stands for the three major indexes at the moment:
The S&P 500 is up 0.10%
Dow Jones is down 0.07%
Nasdaq is up 0.18%
'I will continue to carry out my duties': How has Cook responded?published at 16:01 British Summer Time
16:01 BST
Image source, Bloomberg via Getty Images
Fed Governor Lisa Cook has rebuffed Trump's attempt to remove her from her position.
In a statement issued on Tuesday, Cook disputes Trump's authority to fire her and says she is still at post.
“President Trump purported to
fire me “for cause” when no cause exists under the law, and he has no authority
to do so," the statement says. "I will not resign. I will continue to carry out my duties to
help the American economy as I have been doing since 2022.”
Cook's lawyer Abbe David Lowell also says they will fight Trump's actions.
“President Trump has taken to
social media to once again “fire by tweet” and once again his reflex to bully
is flawed and his demands lack any proper process, basis or legal authority," Lowell says. "We will take whatever actions are needed to prevent his attempted
illegal action.”
Trump accuses Cook of mortgage fraud - she firmly rejectspublished at 15:58 British Summer Time
15:58 BST
Image source, Getty Images
Donald Trump says he has plans to "immediately" fire Lisa Cook over mortgage fraud allegations.
In order to do so he would need to find cause, as the Federal Reserve Act does not give the president license to remove a Fed official at will.
What has Trump accused her of?
In his Truth Social post, the president cited allegations that Cook may have falsified records to obtain a mortgage.
He said she signed two documents, two weeks apart, attesting that two homes in different states were both her primary residence.
"It is inconceivable that you were not aware of your first commitment when making the second. It is impossible that you intended to honor both," he wrote.
CNN has obtained and reviewed, external the mortgage documents in question and found she did claim two primary residences but it is unclear whether she informed either lender of the fact.
She has not been charged with any wrongdoing.
In a statement emailed to reporters through the law office of the lawyer Abbe Lowell, she remained firm in her rejection that Trump had the right to fire her.
We'll have more on her response to Trump's accusations in our next post.
The US Federal Reserve - explainedpublished at 15:47 British Summer Time
15:47 BST
Image source, Reuters
As the central bank of the US, the Federal Reserve is responsible for:
Running the nation's monetary policy
Promoting stability in the financial system
Regulating institutions and other tasks
One of the most visible activities it undertakes is to set interest rates. This has a big impact on the nation's financial conditions by influencing how much money people can borrow.
The Fed functions as a federal agency and is considered to be independent within government - its decisions do not require the president's approval, though it is accountable to Congress.
Who is Lisa Cook, and what does she do?published at 15:43 British Summer Time
15:43 BST
Image source, Reuters
Lisa Cook - the Federal Reserve governor who finds herself at the centre of Donald Trump's ire - was appointed to the role in 2022 by Democratic President Joe Biden, becoming the first African American to serve in the role.
Her term is due to end in 2038.
Prior to holding her post on the Federal Reserve board, she served on Barack Obama's Council of Economic Advisers and worked at the US Treasury.
There are seven governors on the Fed's board and they each play a key role in setting the monetary policy of the US.
They make up the majority of the committee that decides the level of US interest rates and aims to keep prices stable and unemployment as low as possible.
Though Cook is not a politician, the respected economist is among a string of senior Fed policymakers who has voted in recent months to keep interest rates on hold this year.
If Cook was ousted from her role, it would allow Trump to choose a replacement. This would in effect help him leverage more control over the policy at the Fed.
The move has caused an outcry from Democrats who say it amounts to unprecedented political interference.
Trump to meet Cabinet after escalating fight with the Fedpublished at 15:38 British Summer Time
15:38 BST
Ana Faguy Reporting from Washington DC
Welcome to our live coverage of US politics, where President Trump will soon meet his Cabinet members.
It comes a day after he posted on social media that he has ordered the immediate removal of Lisa Cook, a member of the Federal Reserve Board of Governors, over mortgage fraud allegations.
Cook has since responded and said she would not step down from her position, and that Trump does not have the authority to remove her.
The move highlights Trump's ongoing conflict with Fed officials, including Cook and Fed Chairman Jerome Powell. Trump wants the Fed, the US central bank, to lower interest rates.
The Fed has long maintained its independence from politics, and has maintained interest rates at current levels during its past few meetings.
We expect Trump to answer media questions after his Cabinet meeting, so stick with us.
5 months ago
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Bernd Debusmann Jr
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Ana Faguy
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