Vegetables on display in a grocery store on August 15, 2025 in Delray Beach, Florida. Joe Raedle/Getty Images
(NEW YORK) — Consumer confidence worsened slightly in August, erasing some gains from the previous month and resuming a downward trend suffered at the outset of 2025, the Conference Board said on Tuesday.
The souring of shopper attitudes followed a weak jobs report and a set of sweeping new tariffs issued by President Donald Trump. A lower-than-expected inflation report this month eased some concerns about significant tariff-induced price increases, though a measure of underlying inflation ticked up.
The consumer confidence index declined 1.3 points to 97.4 in August, the Conference Board said. The figure came in higher than economists expected. The index has hovered around the same level over the past three months.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key bellwether for the outlook of the nation’s economy.
The measure of consumer confidence arrived hours after Trump moved to fire Federal Reserve Governor Lisa Cook, alleging that she had committed mortgage fraud.
In a statement to ABC News, Cook said Trump “has no authority” to fire her. Cook said she would not resign, instead vowing to “continue to carry out my duties to help the American economy.”
The Fed is an independent agency established by Congress. Federal law allows the president to remove a member of the Fed board for “cause” — though no precedent exists for such an ouster.
Some recent indicators have suggested the onset of an economic slowdown. A report on gross domestic product late last month indicated average annualized growth of 1.2% over the first half of 2025, well below 2.5% growth last year.
A jobs report released by the U.S. Bureau of Labor Statistics on Aug. 1 revealed a sharp cooldown of the labor market.
Still, some facets of the economy have proven resilient. The overall inflation rate stands at 2.7%, below the 3% rate in January, before Trump took office.
The U.S. has largely averted the type of widespread job losses that often accompany a recession. Consumer spending ticked higher over the three months ending in June. Corporate earnings have remained robust.
Federal Reserve Chair Jerome Powell last week said the central bank faces a “challenging situation” as a hiring slowdown coincides with tariff-driven price increases, putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.
Powell said the Fed would “proceed carefully” but he hinted at the possibility of an interest rate cut, saying “the shifting balance of risks may warrant adjusting our policy stance.”
(NEW YORK) — The Federal Reserve cut its benchmark interest rate a quarter of a percentage point on Wednesday, opting for its first interest rate cut this year in an effort to revive the flagging labor market.
The central bank delivered a policy long-sought by President Donald Trump, though the size of the rate cut all but certainly fell short of Trump’s desired outcome. The Federal Open Market Committee (FOMC), a policymaking body at the Fed, projected two additional quarter-point rate cuts over the remainder of the year.
Five meetings and nine months have elapsed since the Fed last cut interest rates. The federal funds rate stands between 4% and 4.25%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In a statement on Wednesday, the FOMC indicated greater concern for slowing employment growth than for rising inflation.
“The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen,” the FOMC said.
The high-stakes announcement marks a flashpoint in the monthslong pressure campaign directed at the Fed by Trump.
In recent weeks, Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. Both officials were on track to be among the 12 policymakers who cast votes on the interest-rate decision, though their status remained uncertain days before the Fed meeting.
The race to reshape the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates. In July, Powell stressed the importance of political independence, saying it allows central bankers to make “very challenging decisions” based on “data.”
In a social media post on Monday, Trump reiterated his criticism of Powell, saying the Fed chair “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.”
In recent months, the economy has suffered a sharp hiring slowdown alongside an uptick of inflation, setting the conditions for what economists call “stagflation.”
The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.
Last month, Powell said the central bank faces a “challenging situation,” putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.
Still, Powell said, the “balance of risks appears to be shifting” in light of a hiring slowdown made clear in a weak jobs report earlier this year that included sharp downward revisions of job gains over recent months.
Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.
Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.
Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts.
Days later, the Trump administration filed a request with an appeals court asking to remove Cook by Monday, before the scheduled vote on interest rates. That day, an appeals court rejected Trump’s bid, clearing the path for Cook to vote at the Fed meeting. Trump may appeal the ruling to the Supreme Court.
Last month, Trump called on Cook to resign on the same day that Bill Pulte, the director of the Federal Housing Finance Agency, posted on X part of an Aug. 15 letter sent to U.S. Attorney General Pam Bondi accusing Cook of falsifying bank documents and property records to acquire more favorable loan terms, “potentially committing mortgage fraud,” the letter stated.
In a statement provided to ABC News at the time, Cook said she learned from the media about Pulte’s letter seeking a criminal referral over the mortgage application, which predated her time with the Federal Reserve.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in the statement last week. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
The Senate voted 48-47 on Monday to confirm White House economic adviser Stephen Miran’s nomination to serve as a member of the Board of Governors of the Federal Reserve, paving the way for Miran to cast a vote on interest rates.
Miran has vowed to safeguard central bank independence but said earlier this month that he does not plan to resign from his position within the Trump administration. Miran is filling a vacancy created by the early retirement of Fed board member Adrianna Kugler, whose term was set to end in January.
Miran said he plans to take an unpaid leave of absence from his current role. Miran reached the decision after “advice from counsel,” since his term on the Fed board would last four months, Miran said at a Senate hearing this month.
(WASHINGTON) — Private spaceflight is transforming from joy rides for billionaires into a gateway for nations to establish their space presence, one expert says, as the latest Axiom Space mission returned to Earth on Tuesday.
The mission marked a historic moment for India, Poland and Hungary, who sent astronauts to the International Space Station (ISS) for the first time in decades. Rather than waiting for traditional space programs, these nations booked private flights through Axiom Space, which aims to build the world’s first commercial space station, and SpaceX, which provided the spacecraft the astronauts traveled on.
“This is huge,” said ABC News contributor and astrophysicist Hakeem Oluseyi. “These nations didn’t go through NASA or wait for Russia. They booked the private flight and brought their own experiments. That is a global power flex.”
The mission serves as more than just a demonstration of private space capabilities, Oluseyi said. With NASA planning to decommission the ISS by the end of 2030, Axiom Space, headquartered in Houston, is positioning itself to become “the new landlord of low Earth orbit,” according to Oluseyi. The company has already secured agreements with multiple countries for its own planned space station.
However, the increasing privatization of space access raises questions about America’s future role in space exploration. While another private company, SpaceX, currently provides the only means for launching astronauts from U.S. soil, Oluseyi emphasized the importance of maintaining both public and private investment in space.
“We perform best when there is a combination of both public and private investment,” Oluseyi said, noting current federal budget pullbacks in space and science funding. “Strategically, America needs both public and private to maintain leadership… This is a time not to pull back, but to invest ever more aggressively.”
As space becomes more accessible to new participants, Oluseyi said continued investment and innovation are crucial for maintaining U.S. leadership in space exploration — even as private spaceflight takes off.
“You can’t stop that cat out of the bag, but you can maintain leadership, you can be the one to innovate and take us to the next level,” he said.
(NEW YORK) — Mortgage rates have fallen rapidly in recent months, offering homebuyers an opportunity for some borrowing relief if they move ahead with the big-ticket purchase.
The average interest rate on a 30-year fixed mortgage stands at 6.35%, dropping from 6.5% over the week ending on Thursday, which amounted to the largest one-week drop in mortgage rates this year, FreddieMac data shows. As recently as January, the average 30-year fixed mortgage rate exceeded 7%.
The sharp drop in mortgage rates owes in part to government data showing a significant decline in hiring, which has heightened expectations that the Federal Reserve will slash interest rates and in turn put downward pressure on borrowing costs, some analysts told ABC News.
Each percentage point decrease in a mortgage rate can save thousands or tens of thousands in additional cost each year, depending on the price of the house, according to Rocket Mortgage.
“This is a significant drop,” Ken Johnson, a real estate economist at the University of Mississippi, told ABC News.
The trend poses a quandary for homebuyers, the experts added: Do buyers move quickly to snap up a favorable mortgage or wait to see if interest rates fall even further?
Mortgage rates closely track the yield on a 10-year Treasury bond, or the amount paid to a bondholder annually. Bond yields are shaped in part by expectations of the benchmark interest rate set by the Fed, some experts said.
Five meetings and nine months have elapsed since the Fed last adjusted interest rates. The federal funds rate stands between 4.25% and 4.5%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.
That posture is expected to shift, however. Fed Chair Jerome Powell recently hinted at the possibility of an interest rate cut, appearing to indicate greater concern for flagging employment growth than for rising prices.
Investors peg the chances of three quarter-point rate cuts by the end of this year at about 76%, according to CME FedWatch Tool, a measure of market sentiment.
The anticipated decline of interest rates has already been priced into the level of mortgage rates, however, meaning the path of rate cuts would need to become more aggressive than expected in order to push mortgage rates down further, Lu Liu, a professor at the Wharton School at the University of Pennsylvania, told ABC News.
A further slowdown of the job market could prompt the Fed to cut interest rates more than expected, but a continued resurgence of inflation could deter central bankers from easing rates at the risk of exacerbating price increases.
“Expectations of lower near-term rates are being priced in, so current mortgage rates look a bit more attractive,” Liu said.
Julia Fonseca, a professor at the Gies College of Business at the University of Illinois at Urbana-Champaign, cautioned against homebuyers attempting to predict the level of mortgage rates.
“Trying to time the market or predict future rate movements is notoriously hard to do,” Fonseca told ABC News.
Meanwhile, the typical price of a home has fallen in recent months. The median sales price of a home in the U.S. registered at $410,800 over three months ending in June, which marked a decline from a price of $423,100 over the previous three-month period, U.S. Census Bureau data shows.
“Prices have cooled, inventory is up, time on the market is up,” Fonseca said. “All of this suggests it’s a more favorable market for buyers relative to recent years. That said, it’s really hard to predict what will happen with prices in the future.”
If homebuyers move forward with a purchase but later find that mortgage rates have continued to fall, they can opt to refinance their homes, Fonseca added. She suggested homebuyers avoid mortgage contracts that include pre-payment penalties, since such fees could add to the cost of a potential decision to refinance.
“I would be guided by your needs and your personal financial situation, rather than try to make predictions about future prices and future interest rates,” Fonseca added.
