Category World News

Donald Trump, president of the United States, has announced his intention to appoint a new chair of the Federal Reserve.

One name is the clear favorite, Kevin Hassett, the director of the White House’s National Economic Council, despite Trump’s unwillingness to confirm his nominee.

On Wednesday, Kalshi’s prediction market predicted that Hassett would have received an 86 percent of the vote, up from 6 percent for Kevin Warsh and 4 percent for Michelle Bowman, a re-elected Fed governor.

Who is in charge of the Federal Reserve’s leadership?

The Fed is arguably the most significant financial institution on earth because it is the central bank of the world’s largest economy.

The Fed serves as a lender of last resort and plays a number of important roles in the US economy, including setting monetary policy, supervising and regulating banks, and promoting financial stability.

The Fed manages monetary policy, which is primarily controlled by setting interest rates, closely monitoring these processes.

The Fed’s policymaking committee convenes eight times annually to determine the federal funds rate, target interest rate, and short-term lending rates for commercial banks.

The committee’s final meeting for 2025 is scheduled for Tuesday and Wednesday of next week, when it is anticipated to come to a consensus on a 0.25 percent cut to the benchmark rate, which is currently set at 3.75 percent to 4.25 percent.

Because banks’ borrowing costs affect the interest rates they charge clients for mortgages, car loans, and other types of credit, the benchmark rate has far-reaching implications for the entire economy.

Interest rates are typically raised when the economy is struggling and raised when prices are rising too quickly by the Fed, who has the dual duty of encouraging employment and maintaining price stability.

Cheaper borrowing spurs economic growth and encourages business investment.

In contrast, higher borrowing costs help to slow down inflation and prevent economic activity.

What is the background of Hassett?

Hassett is one of the many names that has been considered for the top Fed position, but he stands out for how long he has been close to Trump.

After serving in his first administration as the head of the Council of Economic Advisers, an older, more research-oriented body than the National Economic Council, Hassett was appointed as Trump’s top coordinator on economic policy.

Hassett&nbsp briefly re-enter the White House as an advisor on the COVID-19 pandemic after departing the first Trump administration in 2019.

Importantly, Hasset has indicated that he favors lowering interest rates more frequently, something that Trump has vehemently demanded from Jerome Powell, the current Fed chairman, with mixed results.

Trump has argued that the possibility of his tariffs causing a return to high inflation is exaggerated, suggesting that the benchmark rate should be set at 1%.

Hassett claimed in an interview with Fox News last month that if he were Powell’s person, he would be “cutting rates right now.”

Hassett, a senior fellow at the Peterson Institute for International Economics, said he would likely push for faster rate cuts, though likely not at the preferred speed.

Gagnon told Al Jazeera, “I believe Hassett will try to lower the Fed’s policy interest rates, but probably not to the 1 percent level that President Trump has demanded.”

He would likely contend that the government’s deregulation plan and the rise in AI-related inflation give the country more room to grow.

Before and in between his stints as a Trump White House official, Hasset was a conservative think tank’s economist who wrote in-depth articles on tax and trade policy.

Hassett also advised Mitt Romney’s, George W. Bush’s, and John McCain’s presidential campaigns on economic issues.

The economist worked for the Fed’s research and statistics division and Columbia Business School before getting involved in politics.

Why is there so much controversy surrounding Hassett’s potential nomination?

Hassett’s standing as a Trump supporter has sparked some concerns about the Fed’s independence.

The US economy is largely viewed as having the ability to make its decisions without the influence of any political figures.

However, Trump’s repeated verbal attacks on Powell, who will serve until May, and his efforts to remove Lisa Cook, one of the Fed’s six other governors, over unproven allegations of mortgage fraud have already raised that expectation.

Anastassia Fedyk, an assistant professor of finance at the University of California Berkeley’s Haas School of Business, told Al Jazeera that her concerns about the Fed’s independence are “very real and valid.”

“It’s not just about Kevin Hassett being more in tune with President Trump than other Fed chairs were with their nominees.” The firing of Lisa Cook, the early attempts to end Jerome Powell’s term, and Kevin Hassett’s own declaration of support for those efforts also have contextual bearing.

However, if Hassett were to be chosen and then confirmed by the US Senate, he wouldn’t be able to run the Fed.

The policy committee of the central bank, which includes four members of Joe Biden’s former Democratic presidential candidate, makes its decisions by majority vote. It has 12 members.

Who will lead the Fed next will have the same challenging job of promoting jobs without causing higher inflation, according to David Wilcox, an economist with Bloomberg Economics and the Peterson Institute for International Economics.

“On the one hand, the jobs market appears to be deteriorating, but only gradually. On the other hand, inflation is still too high, notably above the Fed’s goal of 2 percent, according to Wilcox.

No one should pretend the choice is obvious, Wilcox added, “but there is plenty of room for reasonable people to disagree about how these competing considerations should best be balanced against one another.”

A leak from the inspector general of the Pentagon reportedly points to Pete Hegseth’s use of the messaging app Signal, which was used to communicate sensitive information, putting in danger a military operation.

A preview of the inspector general’s report, which was made available on Wednesday, was provided by media reports that were scheduled to be released in full on Thursday.

According to anonymous sources close to the document, Hegseth’s use of a personal device to transmit sensitive information was deemed to be against Pentagon policy.

The editor-in-chief of The Atlantic magazine, Jeffrey Goldberg, wrote an article describing an extraordinary series of events that dominated the inspector general’s report.

According to Goldberg, he described how, on March 11, he was allegedly invited by then-national security adviser Mike Waltz to a Signal chat.

Despite not knowing whether the message was a hoax, Goldberg accepted the invitation. He claimed that he was caught in the middle of a conversation with some of the most senior officials in the administration two days later.

Hegseth, Vice President JD Vance, and State Secretary Marco Rubio were just two of the participants.

Trump defends Signal conversation.

Hegseth reportedly provided information in advance about a Yemeni Houthi rebel attack on March 15. In the Signal chat, it was reported that he had already disclosed details. The F-18 planes would launch at what precise time, when the drones would arrive, and when both parties would launch airstrikes, were given.

The Trump administration, particularly Waltz and Hegseth, were outraged by Goldberg’s reporting on the conversation.

Some critics criticized the dangers that the messages to US military installations abroad posed, with some expressing concern that if the Signal chat had been intercepted, it might have endedanger service members’ lives.

In order to ensure compliance with operational security standards, this week’s inspector general report recommends more training.

However, it is left to wonder whether the information Hegseth transmitted over Signal was actually classified at the time.

Instead, the inspector general makes the case that Hegseth, the secretary of defense, has the authority to set the classification level of military intelligence and could have declassified it if he so desired.

Hegseth’s office’s spokesperson, Sean Parnell, described the finding as a victory for the troubled defence secretary, who has long denied that “war plans” were shared over the messaging app.

No classified information was shared, Parnell wrote in a statement, arguing that the Inspector General review is “a TOTAL exoneration of Secretary Hegseth and proves what we knew all along.”

The case is now complete and the issue has been resolved.

Parnell also criticized the media for highlighting the dangers the information posed to US military personnel.

“This conclusion is supported by no evidence,” the statement continues. In response to a New York Times article that highlighted the potential risks, Parnell wrote, “No”.

Parnell argued that no troops were in harm’s way because of Operation Rough Rider’s “flawless execution &, success” (the name of the Yemen bombing campaign).

President Trump has previously referred to the aftermath of the scandal as a “witch-hunt” and questioned whether Signal itself was “defective.”

The scandal, known as Signalgate, has been referred to as “case closed” by administration officials on numerous occasions. In contrast, Hegseth hasn’t been subjected to any public reprimands for his participation in the conversation.

A “breach in protocol”

However, Chuck Schumer, the head of the Senate Democratic Party, has criticized the conversation as one of the “most stunning breaches of military intelligence” in recent memory.

Some claimed that the Signal messages had been intercepted by foreign intelligence agents. Some people claimed Signal’s auto-delete feature violated government transparency guidelines, which call for secure storage of documentation.

Democrats and some Republicans pressed for Hegseth’s actions to be investigated. Gerald Connolly, the ranking Democrat on the House Oversight Committee at the time, echoed that request in a letter from March 26.

He wrote, “I request that you launch an investigation into this grave lapse in protocol and national trust.”

“The use of Signal to communicate this information embarrassed our adversaries by exposing the careless behavior of our nation’s senior leaders.” “The use of Signal jeopardized the lives of men and women in the military.

The Pentagon’s acting inspector general, Steven Stebbins, responded to the outcry on April 3. He explained that the Senate Armed Services Committee’s leadership had prompted him to launch a probe.

In a brief, one-page memo, Stebbins wrote, “The purpose of this evaluation is to find out how closely the Secretary of Defense and other DoD [Department of Defense] personnel adhered to DoD policies and procedures for the use of a commercial messaging application for official business.”

Additionally, we will examine whether the classification and records retention requirements are met.

In January, Stebbins took over the position of acting inspector general under Trump’s leadership of a government watchdog purge.

More than a dozen inspectors general, the nonpartisan officials tasked with overseeing various executive agencies, were fired on January 24 just before the start of his second term.

The last surviving Native American World War II D-Day veteran, Charles Shay, passed away on Wednesday at his French residence. He patched up US soldiers in Normandy’s beaches in 1944 while serving as an army medic. He was given three Bronze Stars and three Silver Stars. He was 101.

President Trump has proposed a proposal to ease regulations governing car manufacturers’ ability to regulate pollution from gasoline-powered vehicles and trucks.

On Wednesday, the plan was revealed. The 2031 model year’s fuel economy requirements, which establish guidelines for how far new cars must travel on a gallon (3. 8 litres) of gasoline, would be significantly reduced if finalized next year.

According to officials, the regulations will give Americans more access to the full line of gasoline vehicles they need and can afford. According to the administration, the new standards will set the average mileage for light-duty vehicles in the fleet for the model year 2031 set at roughly 34.5 miles (65. 5 km/gallon). That frees up car manufacturers to produce more profitable vehicles, such as sports utility vehicles.

The Trump administration’s latest move is to reverse policies that promoted cleaner-running vehicles, including electric vehicles (EVs), from the era of former Democratic President Joe Biden. The US has the highest level of greenhouse gas emissions emissions, followed by burning gasoline in vehicles.

Top executives from the three largest US automakers, who have praised the planned changes, were present for Trump’s announcement at a White House event. The Biden-era rules have been challenging to adhere to, according to the auto industry.

Trump has repealed fines for automakers who do not adhere to federal mileage standards, as well as repealing consumer credits worth up to $7,500 for purchases of electric vehicles since taking office in January.

split response

The planned rollback was “a win for customers and common sense,” according to Ford CEO Jim Farley in a statement.

We applaud President Trump’s efforts to align market realities with fuel economy standards as America’s largest auto producer. While still giving customers choice and affordability, Farley claimed that we can make real progress in carbon emissions and energy efficiency.

Antonio Filosa, the automaker’s CEO, expressed gratitude for the administration’s efforts to “realign” the standards “with real-world market conditions.”

Environmentalists decried the choice.

The Center for Biological Diversity’s Safe Climate Transport Campaign director, Dan Becker, claimed that Trump is “in one stroke worsening three of our nation’s most perplexing issues: the need for oil, high gas prices, and global warming.”

According to Katherine Garcia, director of the Sierra Club’s Clean Transportation for All program, “Gutting the]petrol-mileage program will make American families burn more cash and cars burn more gas.”

She said, “This rollback would move the auto industry backwards, keeping polluting cars on our roads for years to come, and putting a health risk on millions of Americans, especially children and the elderly,” in danger.

According to the Trump administration, major carmakers will reduce their technology costs by more than $35 billion through 2031 as a result of a general rollback of standards for fuel economy.

According to the National Highway Traffic Safety Administration (NHTSA), General Motors would save $8.7 billion between 2027 and 2031, while Stellantis, owned by Ford and Chrysler, would each save more than $5 billion. Hyundai would save $4.6bn, Subaru $3.8bn, and Toyota $2.3bn, it said.

However, according to the NHTSA, fuel costs for drivers are expected to rise, and US drivers are projected to spend up to $85 billion more through 2050.

False EV claims

Trump has repeatedly pledged to end what he falsely calls an “EV mandate,” incorrectly referring to Biden’s goal of having half of all new car sales by 2030. In the US in 2024, EV sales accounted for roughly 8% of new vehicle sales, according to Cox Automotive.

Although California and other states have passed laws mandating that all new passenger vehicles sold in the state be zero-emission by 2035, no federal policy has ever required auto companies to sell EVs. Trump and congressional Republicans earlier this year blocked the California law.

Soon after taking office, Transportation Secretary Sean Duffy urged his organization to revers the corporate average fuel economy requirements that are currently in place. He claimed in June that the calculations that were made under Biden included using electric vehicles. EVs don’t use gasoline. The traffic safety agency was given the authority to change the requirements after the June rule revision.

By 2031, automakers would be required to travel an average of 50 miles (81 kilometers) per gallon of gasoline, compared to the current average of about 39 miles (63 kilometers) per gallon.

Additionally, the Biden administration increased the fuel economy requirements for light-duty vehicles from 2027 to 2031 by 2 percent annually, and for SUVs and other light trucks from 2029 to 2031. It called for stringent tailpipe regulations to encourage the adoption of electric vehicles at the same time.

According to the NHTSA’s calculations for 2024, 14 billion gallons of gasoline would have been saved from burning by 2050.

Cars could produce 22, 111 more tonnes of carbon dioxide annually than they could before, according to the Biden-era regulations, if they were to be abandoned in 2035. Additionally, there will be an additional 90 tons of deadly soot particles and more than 4,870 tons of volatile organic carbons entering the air in the upcoming years.

Since the energy crisis of the 1970s, mileage regulations have been in place, and automakers have gradually increased their vehicles’ average efficiency.

In an effort to update outdated laws, India introduces simplified labor codes.