Market Wire, North America

The Trump administration sharply intensified its assault on the Federal Reserve’s independence this evening, threatening a fundamental cornerstone of the international monetary and financial system—and a key factor underpinning the dollar’s global dominance. According to multiple news sources and officials themselves, US prosecutors today served the central bank with grand jury subpoenas and a threat of criminal indictment over Chair Jerome Powell’s testimony before the Senate Banking Committee last June—in which he defended cost overruns on a long-standing headquarters renovation projection. In a video statement released on the bank’s website, Powell dismissed the scrutiny as a politically-motivated attempt to undermine...

The Federal Reserve cut rates for a third consecutive time this afternoon, and opened the door to a January pause amid growing uncertainty on the economy’s underlying trajectory. In the widely-expected decision, the Federal Open Market Committee voted by a surprisingly balanced 9-to-3 margin to lower the target range for the federal funds rate to between 3.50 and 3.75 percent. Trump appointee Stephen Miran against dissented from the majority in favour of a bigger move, while Austan Goolsbee and Jeffery Schmid supported staying on hold. Markets had feared a more profound divergence would be on display, given that the October...

The US job creation engine turned in a solid performance in September, maintaining market expectations for a short pause in the Federal Reserve’s easing campaign. According to delayed data just released by the Bureau of Labor Statistics, 119,000 jobs were added in the month—representing an overshoot relative to the 51,000-consensus forecast—while the previous two months were revised down by a total 33,000 positions. This brought the three-month average pace of job creation to 62,000, up from 29,000 ahead of the update. However, the unemployment rate ticked up to 4.4 percent from 4.3 percent previously—likely assisted by a rise in the...