Fed Chair Powell says ‘time has come’ for shift toward interest rate cuts
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(WASHINGTON) — Federal Reserve Chair Jerome Powell on Friday indicated that the central bank would soon begin cutting interest rates.
Speaking at an annual gathering in Jackson Hole, Wyoming, Powell said the “time has come” for the Fed to adjust its interest rate policy. The announcement comes after a yearslong effort to fight inflation with highly elevated interest rates.
At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. On Friday, Powell appeared to indicate that the Fed had achieved that objective.
“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.
Price increases have slowed significantly from a peak of more than 9%, but inflation remains nearly a percentage point higher than the Fed’s target rate of 2%.
In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
Recent economic developments have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said. The unemployment rate has ticked up this year from 3.7% to 4.3%.
“A cooldown in the labor market is unmistakable,” Powell said.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.
“Powell has rung the bell for the start of the cutting cycle,” Seema Shah, chief global strategist at investment firm Principal Asset Management, told ABC News in a statement. “Make no mistake, if the labor market shows signs of further cooling, the Fed will cut with conviction.”
Wall Street rallied in early trading on Friday after the remarks from Powell. Each of the major stock indexes climbed more than half a percentage point on the news.
(WASHINGTON) — Amid escalating rhetoric from former President Donald Trump threatening to prosecute his enemies should he win the 2024 election, Attorney General Merrick Garland will deliver remarks to the Justice Department workforce Thursday urging they continue to adhere to longstanding principles intended to protect DOJ from improper politicization.
“Our norms are a promise that we will fiercely protect the independence of this Department from political interference in our criminal investigations,” Garland will say, according to excerpts of his prepared remarks provided to reporters.
Garland will add, “Our norms are a promise that we will not allow this Department to be used as a political weapon. And our norms are a promise that we will not allow this nation to become a country where law enforcement is treated as an apparatus of politics.”
The remarks come as Garland has sought to refute allegations from Trump and his allies of weaponization of the department through its prosecution of individuals involved in the Jan. 6 attack on the U.S. Capitol, as well as Special Counsel Jack Smith’s dueling prosecutions of Trump himself for his alleged mishandling of classified documents and his efforts to overturn the 2020 election.
Those close to Garland have disputed those accusations as baseless — pointing in part to DOJ’s prosecution and conviction of Democrats like disgraced New Jersey Sen. Bob Menendez on corruption charges as well as the separate Special Counsel prosecutions of President Joe Biden’s son, Hunter Biden.
Trump and his allies, in turn, have ramped up in recent months their promises to use the Justice Department as a tool of retribution against his political enemies — with Trump in a Truth Social post over the weekend threatening “long term prison sentences” for “Lawyers, Political Operatives, Donors, Illegal Voters, & Corrupt Election Officials” he baselessly accused of being involved in “cheating” in the 2020 and 2024 elections.
According to the excerpts, Garland will forcefully rebuke what he describes as a “dangerous — and outrageous” spike in threats targeting DOJ employees under his tenure.
“Over the past three and a half years, there has been an escalation of attacks on the Justice Department’s career lawyers, agents, and other personnel that go far beyond public scrutiny, criticism, and legitimate and necessary oversight of our work,” Garland will say. “These attacks have come in the form of conspiracy theories, dangerous falsehoods, efforts to bully and intimidate career public servants by repeatedly and publicly singling them out, and threats of actual violence.”
Garland will use his remarks specifically to point to steps taken during his tenure he says have been aimed at isolating the department from allegations of politicization, such as re-implementing policies intended to limit contacts with the White House.
Those policies, however, were complicated by the Supreme Court’s July ruling that effectively granted Trump immunity in his federal election subversion case over his alleged efforts to use the Justice Department to overturn the election. The court’s conservative majority determined that Trump and other presidents should be shielded from any criminal liability for contacts with the DOJ, that they said clearly fall within the chief executive’s core powers.
As a result, Special Counsel Smith returned a superseding indictment two weeks ago against Trump that stripped out any mentions of the alleged DOJ plot.
(WASHINGTON) — Special counsel Jack Smith has charged former President Donald Trump in a superseding indictment in his federal election interference case.
“Today, a federal grand jury in the District of Columbia returned a superseding indictment, ECF No. 226, charging the defendant with the same criminal offenses that were charged in the original indictment,” a Justice Department spokesperson said Tuesday.
“The superseding indictment, which was presented to a new grand jury that had not previously heard evidence in this case, reflects the Government’s efforts to respect and implement the Supreme Court’s holdings and remand instructions,” the spokesperson said.
Trump last August pleaded not guilty to federal charges of undertaking a “criminal scheme” to overturn the results of the 2020 election to remain in power. Last month, in a blockbuster decision, the U.S. Supreme Court ruled that Trump is entitled to immunity from criminal prosecution for official acts undertaken while in office, and sent the case back to the trial court to sort out which charges against him can stand.
The superseding indictment retains the four original charges against Trump from the special counsel’s original indictment — but is pared down to adjust to the Supreme Court’s ruling.
While the original indictment laid out five ways Trump allegedly obstructed the function of the federal government — having state election officials change electoral votes, arranging fraudulent slates of electors, using the Department of Justice to conduct “sham” investigations, enlisting the Vice President to obstruct the certification of the election, and exploiting the chaos of the Jan. 6 riot — the new indictment removes mention of his use of the Department of Justice, which was explicitly mentioned in the Supreme Court’s ruling as falling within his official duties.
While the original indictment mentions the Justice Department on over 30 occasions, the new indictment makes no mention of the DOJ. It also reframes the portion of the original indictment outlining that Trump allegedly knew his claims of election fraud were false.
The superseding indictment identifies Trump as “a candidate for President of the United States … who was also the incumbent President” and says that he “had no officials responsibilities related to any state’s certification of the election results.”
The new indictment is 36 pages, while the original indictment was 45.
It comes just days after Smith, in a filing, urged the Eleventh Circuit Court of Appeals to reverse a federal judge’s surprise dismissal of Trump’s classified documents case.
(WASHINGTON) — In Vice President Kamala Harris’ bid for the White House, her pathway to the coveted 270 electoral votes has evolved now that she is the Democratic Party’s nominee — as she can potentially fare better than President Joe Biden in regions like the Sun Belt.
Biden’s decision to leave the 2024 race last month and Harris’ ascension to the top of the ticket has injected fresh enthusiasm into the contest — and the Harris campaign is looking to capitalize on that during a tour of battleground states this week with her newly minted running mate, Minnesota Gov. Tim Walz, which includes stops in the Sun Belt states of Arizona on Friday and Nevada on Saturday.
The Sun Belt — which includes states in the South and West, ranging from Florida and Georgia through the Gulf states into California — contains several 2024 battleground states that both Harris and former President Donald Trump will target in their effort to win in November.
Biden’s campaign, focused on saving democracy and the threat Trump poses in the effort, struggled to capture the energy needed to mobilize voters in the Sun Belt states he narrowly won during the 2020 election — including Arizona and Georgia, experts told ABC News. Now Harris’ campaign is working to appeal to the coveted Sun Belt voters who could help her win the White House.
Broadening Harris’ base
Republican and Democratic strategists both agree that the momentum Harris has been able to garner has paved new lines in the Sun Belt that the campaign can now realistically cross.
Chuck Coughlin, a longtime Republican consultant in Arizona, said Harris can make inroads in Arizona where Biden was not able to.
“Harris seems to have grasped the ‘I’m looking forward, they’re looking backward’ narrative and Arizona is a forward-looking state,” said Coughlin, who is now registered as a “PND” or “Party Not Designated” after leaving the party in 2017.
Lorna Romero, an Arizona GOP strategist, told ABC News that the campaign’s “forward looking” messaging is what a lot of voters are looking for in a candidate. However, she said she thinks Harris will have to do a lot more if she wants to win over Republicans in the state that Biden narrowly won in 2020 by roughly 10,000 votes.
“I think Harris really needs to separate herself from the Biden administration because what Republicans have been doing has been pointing out the failures under Biden like the border,” Romero said of Arizona, a state where the immigration and border debate — a key voter issue in 2024 — has raged.
And Harris’ campaign is working to sway some of those Republican voters. In order to win the Sun Belt states, Harris will not only have to appeal to her base, but also woo moderate and Republican voters. The campaign has launched a grassroots organizing program nationwide to attract Republicans called “Republicans for Harris.”
No matter the party, issues such as immigration and the economy are top of mind for Arizona residents, according to Coughlin. But issues such as abortion have galvanized voters on both sides of the aisle to head to the polls.
In Arizona, abortion will appear on the ballot in November after an Arizona Supreme Court decision revived an 1864 near-total abortion ban, which could potentially punish providers who provide an abortion. Before the Arizona Supreme Court decision, the state had a 15-week abortion ban in place.
Coughlin said he thinks abortion on the ballot could be a major “turnout mechanism” in the state.
Romero says these issues will make for a tough balancing act for Harris over these next few months between “alienating” swing voters and keeping progressives “happy.”
Morgan Jackson, a Democratic strategist from North Carolina, said she thinks Harris’ chances of winning over that battleground Sun Belt state will be a lot simpler.
Although Biden lost North Carolina in 2020 by some 90,000 votes, Jackson said she thinks the state’s rapidly growing population of young, college-educated adults who prioritize issues such as abortion will help to flip the state.
In 2023, Raleigh — which is home to a consortium of colleges and universities — was America’s third fastest-growing city, according to the Census bureau.
“The way you win North Carolina is you run up the score in the urban and suburban areas, and just try to limit your losses in the rural areas, and I think Kamala Harris is well positioned to do so,” Jackson said.
In Georgia, which played a crucial role in Biden’s 2020 victory after it went blue for the first time since 1992, strategist Amy Morton said she is already seeing the effects of Harris leading the party’s ticket.
“For all of our clients, we will need to revise our projections for turnout upward,” Georgia Democratic strategist Amy Morton told her team after a flood of Harris endorsements when Biden dropped out of the race. “That’s the impact Harris will have on the ticket.”
Voter enthusiasm in the Sun Belt
Harris is doing better than Biden in the Sun Belt’s swing states, according to 538’s polling average.
For example, in Arizona, Trump leads only by a half point margin — 44.8% to Harris’ 44.4%, according to 538’s polling average. Biden left the race polling at 39.5%. In Georgia, 538’s polling average shows Trump leads by a small and similar margin — 45.8% compared to 45.2% for Harris; Biden polled at 39.2% before leaving the race.
Loomis Henry, an independent voter and Arizona native, plans to attend the rally Harris and Walz are hosting in Phoenix on Friday.
“I’m completely blown away. And it’s the first time I have felt invigorated and excited about politics,” Henry said.
Although previously unfamiliar with Walz, the governor’s “Minnesota nice” persona has won him over, Henry said.
“I’m like, where’s this guy been hiding? He seems like he’s really a working-class guy and authentic. And I think that has been lacking from politics for so long,” Henry said.
Stephanie Munoz, a 35-year-old from Phoenix, who also plans to attend Friday’s rally approved of the addition to the Harris ticket, too.
“A lot of people criticize Kamala Harris for being like a prosecutor and too uptight and I feel like he brings in more of that warmth feeling, and they play off each other very well,” Munoz said.
Henry told ABC News that regardless of party, the country is ready to move on from its “divisions,” and he thinks Harris will help to ease those tensions.
“I think she just needs to be herself,” said Henry. “I think she’s likable, and I think if she just has more direct dialogue with our country, people will see this and a lot of this ugly right and left, and division — I think she can slowly thaw that out a little bit.”
