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Good morning and welcome back to FirstFT. On today’s agenda:
Trump fires Fed governor
Musk sues Apple and OpenAI
China’s ace in the trade war
Bethlehem reporting project launches
In an extraordinary assault on the independence of the US central bank, Donald Trump last night said he was firing Federal Reserve governor Lisa Cook “effective immediately”. The move led to stock market falls around the world, dollar declines and a sell-off of US government bonds.
The stand-off: In a letter addressed to Cook and posted on social media last night, Trump said there was “sufficient reason” to believe she had made false statements on mortgage agreements, giving him cause to fire her. Cook responded by saying she would not resign and appointed star lawyer Abbe Lowell, who has represented Jared Kushner and Hunter Biden, to defend her.
Why it matters: The move against Cook, the first Black woman to serve on the Fed’s board of governors, follows months of attacks on the central bank’s chair Jay Powell. It also comes weeks after Trump fired the head of the Bureau of Labor Statistics in the wake of a weak jobs report. US presidents have sparred with the central bank since the institution gained independence from government in 1951, but the scale and vigour of Trump’s blitz is without precedent. Read more on the escalating row.
Here’s what else we’re keeping tabs on today:
Central banks: Catherine Mann, Bank of England Monetary Policy Committee member, and Tiff Macklem, governor of the Bank of Canada, speak at a Bank of Mexico conference.
Economic data: The US Census Bureau is to publish July durable goods orders, while Brazil’s statistics agency publishes inflation figures for the first half of August.
Companies: Dollar General is expected to post a rise in second-quarter earnings.
France: French borrowing costs jumped to their highest since March after Prime Minister François Bayrou called a confidence vote for September 8.
Five more top stories
1. Elon Musk’s xAI has sued Apple and OpenAI alleging they broke antitrust rules by thwarting competition in artificial intelligence, opening a new front in the billionaire’s feud with the two companies. The blockbuster lawsuit deepens one of Silicon Valley’s bitterest feuds between Musk and his former ally Sam Altman, OpenAI’s chief executive.
2. Banks are pushing to change new US stablecoin rules over fears they will spark trillions of dollars’ worth of outflows, underlining growing competition between Wall Street and the cryptocurrency industry. Banks fear new rules will create an uneven playing field but crypto companies are fighting back.
More crypto news: Bitpanda, a crypto exchange backed by billionaire investors Peter Thiel and Alan Howard, has ruled out listing in London due to a lack of liquidity in share trading.
3. Trump said he would like to meet North Korean leader Kim Jong Un this year as South Korea’s leftwing President Lee Jae Myung visited the White House against a backdrop of tensions between Washington and Seoul. Read more on yesterday’s meeting.
4. The Australian government has accused Iran of being behind a spate of violent antisemitic attacks in the country and ordered the expulsion of its ambassador from Canberra. Australia blamed Iran’s elite Islamic Revolutionary Guard Corps for being involved in at least two antisemitic attacks last year, including the firebombing of a synagogue in Melbourne and an arson attack on a delicatessen in Bondi, Sydney.
5. Low-cost ecommerce platform Temu has resumed shipping goods from Chinese factories directly to US consumers and increased its ad spending in the country, following a trade truce between Washington and Beijing. Multiple Temu suppliers and investors said the company had restored so-called fully managed shipments in July. Read the full report.
More trade news: Trump, in a social media broadside, has threatened tariffs and export controls on countries whose taxes, rules or laws on tech companies “discriminate” against the US.
News in-depth
Bethlehem Steel Corporation was once one of the largest companies in the US. Its output girded the Empire State Building, the Golden Gate Bridge and the Hoover Dam, and helped fuel victories in two world wars. The city of Bethlehem, Pennsylvania, is a reminder of a prosperous industrial past but also a case study in a successful transition to a productive present. The Financial Times visited Bethlehem this summer to try to understand the rightward shift at last year’s election and will report extensively from the area between now and November 7 2028, when the US will pick its next president. Oliver Roeder sets the scene.
We’re also reading . . .
Graphic of the day
Recent disruption to seabed gas pipelines and telecoms cables has focused military planners’ minds on finding ways to protect underwater assets that are crucial to modern economies. Narrowing the gap are some of the world’s best-known defence companies, which are investing heavily in cutting-edge technologies for navies around the world.
Take a break from the news . . .
Should I be taking creatine? HTSI speaks to experts who weigh in on the wellness buzz surrounding the compound that supplies energy to our muscles.
