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The Justice Department has threatened the Federal Reserve with a criminal indictment over the testimony of Fed Chair Jerome Powell this summer regarding its building renovations, Powell said over the weekend. It is a major escalation by the administration after repeated attempts by President Donald Trump to exert greater control over the independent institution. Trump has repeatedly attacked Powell for not cutting the short-term interest rate, and even threatened to fire him. Powells caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt. That anger has not subsided even after the Fed cut interest rates in three of the final four months of 2025. Trump has also accused Powell of mismanaging the U.S. central banks $2.5 billion building renovation project. In a sharp departure from his previous responses to attacks by Trump, Powell described the threat of criminal charges as simple pretexts to undermine the Feds independence when it comes to setting interest rates. While there has been a limited response from Republican lawmakers, there have been several early breaks with the party. 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, said North Carolina Sen. Thom Tillis, who sits on the Banking Committee, which oversees Fed nominations. Trump is already seeking to fire Federal Reserve Governor Lisa Cook over unproven allegations that she committed mortgage fraud. The allegation was made over the summer by Bill Pulte, a Trump appointee to the Federal Housing Administration. Here are some reasons why the independence of the U.S. Federal Reserve is guarded so closely. Why the Fed’s independence matters The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls which it typically does when the economy falters the Fed can make borrowing cheaper and encourage more spending, accelerating growth and hiring. When it raises the rate which it does to cool the economy and combat inflation it can weaken the economy and cause job losses. Economists have long preferred independent central banks because they can more easily take unpopular steps to fight inflation, such as raise interest rates, which makes borrowing to buy a home, car, or appliances more expensive. The importance of an independent Fed was cemented for most economists after the extended inflation spike of the 1970s and early 1980s. Former Fed Chair Arthur Burns has been widely blamed for allowing the painful inflation of that era to accelerate by succumbing to pressure from President Richard Nixon to keep rates low heading into the 1972 election. Nixon feared higher rates would cost him the election, which he won in a landslide. Paul Volcker was eventually appointed chair of the Fed in 1979 by President Jimmy Carter, and he pushed the Fed’s short-term rate to the stunningly high level of nearly 20%. (It is currently 3.6%, the lowest it has been in nearly three years.) The eye-popping rates triggered a sharp recession, pushed unemployment to nearly 11%, and spurred widespread protests. Yet Volcker didn’t flinch. By the mid-1980s, inflation had fallen back into the low single digits. Volcker’s willingness to inflict pain on the economy to throttle inflation is seen by most economists as a key example of the value of an independent Fed. Investors are watching closely An effort to fire Powell would almost certainly cause stock prices to fall and bond yields to spike higher, pushing up interest rates on government debt and raising borrowing costs for mortgages, auto loans, and credit card debt. The interest rate on the 10-year Treasury is a benchmark for mortgage rates. All major U.S. markets slid Monday at the opening bell, bond yields edged higher and the value of the U.S dollar declined. Most investors prefer an independent Fed, partly because it typically manages inflation better without being influenced by politics, but also because its decisions are more predictable. Fed officials often publicly discuss how they would alter interest rate policies if economic conditions changed. If the Fed was more swayed by politics, it would be harder for financial markets to anticipate or understand its decisions. While the Fed controls a short-term rate, financial markets determine longer-term borrowing costs for mortgages and other loans. And if investors worry that inflation will stay high, they will demand higher yields on government bonds, pushing up borrowing costs across the economy. In Turkey, for example, President Recep Tayyip Erdogan forced the central bank to keep interest rates low in the early 2020s, even as inflation spiked to 85%. In 2023, Erdogan allowed the central bank more independence, which has helped bring down inflation, but short-term interest rates rose to 50% to fight inflation, and remain high. The Fed’s independence doesn’t mean it’s unaccountable Fed chairs like Powell are appointe by the president to serve four-year terms, and have to be confirmed by the Senate. The president also appoints the six other members of the Fed’s governing board, who can serve staggered terms of up to 14 years. Those appointments can allow a president over time to significantly alter the Fed’s policies. Former president Joe Biden appointed four of the current seven members: Powell, Cook, Philip Jefferson, and Michael Barr. A fifth Biden appointee, Adriana Kugler, stepped down unexpectedly on Aug. 1, about five months before the end of her term. Trump has already nominated his top economist, Stephen Miran, as a potential replacement, though he will require Senate approval. Cook’s term ends in 2038, so forcing her out would allow Trump to appoint a loyalist sooner. Trump will be able to replace Powell as Fed chair in May, when Powells term expires. Yet 12 members of the Feds interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the Chair doesnt guarantee that Fed policy will shift the way Trump wants. Congress, meanwhile, can set the Fed’s goals through legislation. In 1977, for example, Congress gave the Fed a dual mandate to keep prices stable and seek maximum employment. The Fed defines stable prices as inflation at 2%. The 1977 law also requires the Fed chair to testify before the House and Senate twice every year about the economy and interest rate policy. Could the president fire Powell before his term ends? The Supreme Court last year suggested in a ruling on other independent agencies that a president can’t fire the chair of the Fed just because he doesn’t like the chair’s policy choices. But he may be able to remove him for cause, typically interpreted to mean some kind of wrongdoing or negligence. It’s a likely reason the Trump administration has zeroed in on the building renovation, in hopes it could provide a for cause pretext. Still, Powell would likely fight any attempt to remove him, and the case could wind up at the Supreme Court. Christopher Rugaber, AP economics writer
Category:
E-Commerce
Americans stressed by high grocery bills have one bright spot to look forward to in 2026. Value-minded grocery chain Aldi is coming to more cities around the country, with 180 new stores set to open in the U.S. this year. Aldi is a compelling option for grocery shoppers on a budget. Founded in Germany, the company envisioned itself as a discount grocery store from day one. Aldis aggressive U.S. expansion will meet the needs of more shoppers seeking a no-frills grocery experience without compromising on quality a niche shared by Aldi competitors like Costco and Trader Joes. The budget grocery chain currently operates in 39 states across more than 2,600 stores in the U.S. By the end of 2026, it plans to add 180 new stores, with some states getting their first Aldi, including a new location in Portland, Maine. The grocer is expanding aggressively in the West in particular, with 50 stores planned for Denver and Colorado Springs alone over the next five years. Phoenix will get 10 new Aldi locations in 2026, with 40 planned by the end of 2030 and four new Las Vegas area stores are on the way in the next few years as well. These strategic investments are all about making sure customers can continue to count on us for the quality, affordable groceries and enjoyable shopping experience they love, Aldi CEO Atty McGrath said in a press release. As we look ahead to our next 50 years in the U.S., well continue to earn shopper loyalty by staying true to whats made ALDI successful: keeping things simple and delivering real value. Beyond the West, Aldi is pushing deeper into the Southeast U.S. through its 2024 acquisition of Southeastern Grocers, the parent company of grocery chain Winn-Dixie. The company will continue converting many of those locations into Aldi stores, with 200 set to be finished by the end of next year. Aldi builds its brand As Americas fastest-growing grocer, Aldi is focused on entering new markets, but the company is also refining aspects of its brand in the process. Late last year, Aldi began putting its own brand on its in-house products, communicating more clearly with customers that they can only buy many of the things they enjoy at Aldi. Private label is the core of what we do, Scott Patton, Aldis chief commercial officer, told Fast Company. Im not going to say we invented it; I would say weve perfected it. More than 90% of the grocers offerings are private label, but that fact isnt always apparent to shoppers a problem the company plans to solve. The overall sentiment was, on average, customers didnt know that was an Aldi brand, Kristy Reitz, Aldis director of brand and design, told Fast Company. Now if they shop us a little less frequently, they think they can find that brand elsewhere, and in fact its a private-label brand to Aldi. The K-shaped economy and Aldi Aldis booming business isnt a coincidence. Its stores command a loyal following by combining high quality with affordability, but its the latter thats really weighing on the minds of U.S. shoppers right now. According to a poll by the Associated Press last year, an overwhelming majority of American households are worried about the high cost of groceries. Around half of people polled said that the high cost of groceries was a major stressor, with only 14% reporting that they werent worried about how much they pay to stock the fridge. No matter what you call it, rich Americans are getting richer while much of the rest of the country is struggling to make ends meet. That K-shaped economy is taking shape in a number of ways, but the crux of it is that lower and middle income consumers are wrestling with a higher cost of living taking a bigger bite out of their earnings while the wealthiest Americans, buoyed by stock market highs, just keep spending. Because the cost of basic needs like food and housing has soared in recent years and American wages havent kept up, many people in the U.S. feel left in the lurch. That leaves a lot of potential Aldi shoppers hunting for deals on the essentials. Other stripped down discount shopping options are also booming. Costcos share price has more than doubled since the current inflationary streak began, with shoppers flocking en masse into its warehouses to stock up on high quality, low markup goods and groceries. Its no surprise that refreshingly non-predatory brands are inspiring small armies of devoted followers who evangelize about the good deals they find. People stressed about their grocery bills have found a safe haven with stores like Aldi and Costco and for anyone who isnt, theres always Erewhon.
Category:
E-Commerce
Facebook owner Meta has named Dina Powell McCormick, a former Trump administration adviser and longtime finance executive, as president and vice chairman of the tech giant. Powell McCormick previously served on Meta’s board of directors where, the company notes, she was deeply engaged in accelerating its artificial intelligence push across platforms. In her new management role, Meta says Powell McCormick will help guide its overall strategy, including the execution of multi-billion-dollar investments. The news, announced Monday, quickly gained the applause of U.S. President Donald Trump. In a post on his social media platform Truth Social, the Republican president said the move was a great choice by Meta CEO Mark Zuckerberg and noted that Powell McCormick had served the Trump Administration with strength and distinction. Zuckerberg said in a statement that Powell McCormicks experience in global finance, combined with her deep relationships around the world, made her uniquely suited to help Meta in its future growth. Powell McCormick is a veteran of two presidential administrations and the Republican National Committee. She worked as a national security adviser at the start of Trump’s first term, and also held roles in the White House and the Secretary of State’s office under President George W. Bush. She is married to U.S. Sen. David McCormick, who served in high-level positions in the Commerce and Treasury departments under Bush before he joined hedge fund Bridgewater Associates and rose to become CEO. And Powell McCormick has a long background in finance. She spent 16 years in senior leadership at Goldman Sachs, but was most recently vice chair, president and head of global client services at merchant bank BDT & MSD Partners. She’s also held a handful of other corporate board positions including at oil giant Exxon Mobil. According to a securities filing, Powell McCormick had previously resigned from Meta’s board in December, eight months after joining as a director. The addition of Powell McCormick to Meta’s management team arrived amid wider efforts from California-based Meta to boost its ties with Trump, who was once banned from Facebook. Like other powerful tech CEOs, Zuckerberg has dined with the president at the White House and doubled down on U.S. investment promises worth hundreds of billions of dollars. Last year, the company also appointed Ultimate Fighting Championship CEO Dana White to its board, another familiar figure in Trump’s orbit. Wyatte Grantham-Philips, AP business writer AP Reporter Marc Levy contributed to this report.
Category:
E-Commerce
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