Stay informed with live updates on tariffs, the trade conflict, and massive layoffs as the US economy experiences a hectic day.
Interest rate decision approaches as Fed examines tariff and trade war effects
Experts warn of rising consumer prices as the Federal Reserve meets to discuss the economic repercussions of looming tariffs. (Scripps News)
Scripps News
Interest rates are set to be a focal point on Wednesday as President Donald Trump takes significant risks to reshape the US economy through tariffs aimed at protecting domestic businesses and laying off thousands of federal employees to reduce government expenses.
Additionally, Trump will meet with leading oil industry executives at the White House on Wednesday to deliberate his strategy for enhancing domestic energy production amidst declining crude oil prices and the threat of trade wars.
The Federal Reserve is anticipated to announce on Wednesday that it will maintain its current key interest rate for the time being. Nonetheless, uncertainty looms over its future projections regarding possible rate cuts.
Trump’s stringent tariffs are expected to spur inflation and hinder economic progress, posing a dilemma for the Fed, which typically raises rates to combat inflation but reduces them to revive a sluggish economy.
The Fed’s predictions on rate cuts could influence its outlook on the economic trajectory in the upcoming months.
Both Trump and Treasury Secretary Scott Bessent have not ruled out the possibility of a recession. However, Bessent asserted on Tuesday that the economy is performing better than media reports suggest, with no imminent recession expected.
In recent years, public support for federal employees has diminished. A 2022 Pew survey revealed that confidence in career civil servants has dropped, with only 52% of Americans expressing a “great deal” or “fair amount” of confidence in these workers, a decrease from 61% in 2018.
From the conservative grassroots Tea Party to the MAGA movement, citizens have voiced a strong resentment towards government authority over their lives. Consequently, federal employees and their accompanying benefits have become symbols of taxpayer dissatisfaction regarding government overspending and inefficiency.
“Federal employees enjoy job security, higher wages, student loan support, superior insurance, and pensions,” remarked one Reddit user. “They also look down on the rest of us.” Read more here.
− Jessica Guynn and Bailey Schulz
The Trump administration was set to continue the reinstatement of over 24,000 recently dismissed probationary employees following a pair of court rulings last week that deemed the firings unlawful. These reinstatements, covering 18 departments, were detailed in a Monday filing by the Department of Justice in federal court in Maryland after a judge requested an update on efforts to restore the employees.
The Trump administration, which is contesting the court decisions, noted that the reinstatement process would be lengthy and complex. All employees offered reinstatement to their original roles would undergo a new onboarding process, which includes retraining, completing HR paperwork, securing new security badges, re-enrolling in benefits programs, restoring required security clearances, and receiving government-provided equipment. They could also be terminated again in the future. Read more here.
− Joey Garrison
An independent nonprofit organization, funded by Congress to promote conflict prevention and resolution globally, is currently embroiled in a dispute with Trump and DOGE. DOGE staff, assisted by the Washington Metropolitan Police Department, entered the U.S. Institute of Peace building during a dramatic confrontation after being denied entry on Friday and informed that the agency does not fall under the executive branch.
Trump aims to dismantle the institute, founded by Congress in 1984 with the mission of “protecting U.S. interests by assisting in the prevention of violent conflicts and facilitating peace initiatives abroad,” according to its website.
After the DOGE personnel returned on Monday with law enforcement and evacuated USIP officials, employees called the police to report a break-in. White House spokesperson Anna Kelly stated USIP has not complied with Trump’s reduction order issued in February.
The majority of the USIP board and CEO George Moose were dismissed by the Trump administration, a termination that Moose is challenging. He informed reporters that his organization has been in discussions with administration officials for weeks, emphasizing that the agency is not subject to their control.
Although tariffs are generally levied on imports, they can also apply to exports to protect domestic industries. Tariffs increase the cost of imports, rendering local products comparatively cheaper. These tariffs can generate revenue, which can be utilized to support local industries, fund public initiatives, or address government expenses.
Furthermore, they can act as leverage in negotiations for concessions from trading partners.
“While tariffs may appear to penalize foreign producers by making their goods or services less competitive, the truth is that the financial burden falls ultimately on U.S. consumers and businesses,” asserted Wilson Center scholars Diego Marroquín Bitar and Valeria Moy in a “Tariffs 101” analysis.
Contributing: Paul Davidson
