Finance

When President Donald Trump fired Erika McEntarfer, America’s labour statistician, he achieved something supposedly rare: he got economists to unite. In a survey by the University of Chicago’s Clark Centre for Global Markets, 100% of the discipline’s most prominent practitioners agreed that there was no evidence the Bureau of Labour Statistics (BLS) was biased. More

Picture a country where renewables are being rapidly rolled out and electric-vehicle sales are surging, and you will probably have in mind somewhere smug and northern European; a place with tall people, coalition governments and a yen for cycling holidays. Or perhaps the first thing that pops into your head is the sheer scale of China, which manufactures the bulk of such equipment and last year contributed more than half of the global increase in solar and wind installation. More

Amid all the trouble facing China—trade war, covid-19, a property slump—the country’s leaders have remained confident about the source of future economic growth. In their view, the country’s manifest destiny lies in high-tech manufacturing. Their “Made in China 2025” plan, released ten years ago, aimed to turn China into a leading factory “powerhouse” by mid-century. The government covets what it calls a “complete” industrial system, which will reduce China’s reliance on foreigners and raise their reliance on it. Xi Jinping, China’s ruler, wants to cultivate “new productive forces” by applying cutting-edge technology to emerging industries, and some traditional ones, too. More

The meeting summary depicted a divergence of opinion among the central bankers, whose vote to hold their key rate steady came despite objections from two Fed governors who argued in favor of cutting.
“Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” the minutes noted.

U.S. Federal Reserve Chair Jerome Powell speaks during a press conference following the issuance of the Federal Open Market Committee’s statement on interest rate policy in Washington, D.C., U.S., July 30, 2025.
Jonathan Ernst | Reuters

Federal Reserve officials worried at their July meeting about the state of the labor market and inflation, though most agreed that it was too soon to lower interest rates, minutes released Wednesday showed. The meeting summary depicted a divergence of opinion among the central bankers, whose vote to hold their key rate steady came despite objections from two Fed governors who argued in favor of cutting.
Policymakers noted rising threats to the economy that would warrant monitoring, though they largely agreed that their current stance was the appropriate way to go.

“Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” the minutes noted. While “a majority of participants judged the upside risk to inflation as the greater of these two risks” a couple saw “downside risk to employment the more salient risk.”
Governors Christopher Waller and Michelle Bowman voted against the decision to hold rates steady, preferring instead that the Federal Open Market Committee start lowering its key rate. The fed funds rate, which sets what banks charge each other for overnight lending but is used as a benchmark for other consumer rates, has been targeted between 4.25%-4.5% since December.
This was the first time that multiple governors voted against a rate decision in more than 30 years.
President Donald Trump’s tariffs were a central part of the discussion.
“Regarding upside risks to inflation, participants pointed to the uncertain effects of tariffs and the possibility of inflation expectations becoming unanchored,” the minutes said. The document also noted “considerable uncertainty remained about the timing, magnitude, and persistence of the effects of this year’s increase in tariffs.”

Coming against an increasingly heated political backdrop, the meeting saw officials express varying opinions on where they see the economy and policy headed. A staff assessment saw economic growth as “tepid” in the first half of the year though unemployment remained low.
Various participants expressed uncertainty over the impact that tariffs would have on inflation while others worried that the jobs picture was starting to show cracks and would need a policy boost to prevent further damage.
“Participants noted that the Committee might face difficult tradeoffs if elevated inflation proved to be more persistent while the outlook for the labor market weakened,” the summary said. Decisions on rates would depend on “each variable’s distance from the Committee’s goal and the potentially different time horizons over which those respective gaps would be anticipated to close.”
The meeting came just two days before a Bureau of Labor Statistics release showing that nonfarm payrolls growth had not only remained weak in July but also that June and May had seen much weaker growth than originally reported.
Even without that information in hand, Fed officials noted that “downside risk to employment had meaningfully increased with the slowing of the growth of economic activity and consumer spending, and that some incoming data pointed to a weakening of labor market conditions.”
The minutes were released two days ahead of the main event for the Fed this week: Chair Jerome Powell delivers his keynote address Friday morning during the central bank’s annual symposium at Jackson Hole, Wyoming.
Powell is expected to use the speech to indicate at least a short-term direction for the Fed regarding rates as well as a longer-term view on policy.
Trump has exerted fierce political pressure on the Fed to cut rates. The president has berated Powell as “stupid,” “a loser” and other invectives while also criticizing the board.
With the resignation earlier this month of Governor Adriana Kugler, Trump will get to appoint another of his own candidates to the seat. Powell’s term as chair expires in May 2026, though he can stay on as governor if he wishes through 2028. In the latest wrinkle, Trump has demanded the resignation of Governor Lisa Cook amid claims that she committed mortgage fraud regarding federal loans she received for properties in Georgia and Michigan.
In the case of the Powell seat, the White House has identified 11 potential candidates, including several current and past Fed officials along with economists and Wall Street strategists.
Correction: This article has been updated to correct the spelling of Adriana Kugler’s name.

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The U.K. should form a national stablecoin strategy to avoid falling behind the U.S., several crypto firms said.
In an open letter, representatives from Coinbase, Kraken and Copper said the U.K. “must act now to avoid being a rule-taker rather than a rule-maker in the digital asset era.”
While the entire stablecoin market is worth over $280 billion, tokens pegged to the British pound have a combined value of just £461,224 ($621,197), according to CoinGecko.

Stablecoin Tether and Circle’s USDC dominate the market.
Justin Tallis | Afp | Getty Images

The U.K. should establish a national stablecoin strategy to enable adoption of the tokens and avoid falling behind the U.S. on the disruptive new technology, several major crypto firms said Wednesday.
In an open letter addressed to Finance Minister Rachel Reeves, 30 crypto industry figures said that the U.K. “must act now to avoid being a rule-taker rather than a rule-maker in the digital asset era.”

“To ensure the UK is at the forefront, we believe a proactive, coordinated national strategy is needed – one that positions stablecoins not as a risk to be contained, but as a financial infrastructure to be responsibly embraced,” the letter said.
The U.K. Treasury department was not immediately available for comment when contacted by CNBC.
Stablecoins are a type of cryptocurrency that is pegged to an existing government-backed currency. There are several stablecoins in issuance, however the most commonly known are Tether’s USDT and Circle’s USDC — both of which are tied to the U.S. dollar.

The entire stablecoin market is worth over $280 billion, according to CoinGecko data. But for stablecoins pegged to the British pound, their combined market capitalization stands at just £461,224 ($621,197).
Crypto industry insiders have taken issue with Britain’s regulatory stance on stablecoins, saying it puts the nascent industry — and, in turn, the U.K.’s financial services landscape — at a disadvantage.

One aspect of the U.K.’s approach that worries the industry is the legal definition of stablecoins as “crypto-assets with reference to fiat currency.”
“This definition focuses on form rather than function,” they said in the open letter Wednesday. “This is akin to defining a cheque as paper with reference to currency, when both are essentially negotiable instruments backed by regulated issuers.”
A national stablecoin strategy would strengthen the U.K.’s role as a global financial center, generate new fee and foreign exchange revenue streams and support demand for gilts through new digital channels, the signatories to the letter said.
The letter was signed by industry executives from Coinbase, Kraken, Copper, Fireblocks, BitGo and VanEck.
Still, stablecoins are not without their concerns.
In 2022, a stablecoin named terra and its sister token luna both collapsed to $0 after a failure in the cryptocurrencies’ underlying technology. That also caused the value of USDT to temporarily fall below its $1 peg. USDT is currently worth $1.
In a research note published Wednesday, HSBC’s head of digital assets research, Daragh Maher, wrote that stablecoins could help bridge the gap between traditional finance and digital assets.
“They are basically the cash equivalent of digital assets,” Maher argued. “They are the reference or base currency for nearly every crypto asset. They can also be used for transferring money using blockchain pay rails rather than traditional banking methods.”
However, he added that regulatory issues remain the biggest hurdle to stablecoin adoption. “The key to capitalising on the potential of stablecoins lies in creating an appropriate regulatory environment for the sector,” said Maher. More

The “Trump Round” of trade negotiations, as Jamieson Greer, America’s trade representative, calls it, was meant to reassert American primacy. Peter Navarro, a longtime adviser to Donald Trump, even suggested that the president deserved a Nobel prize in economics for showing how the world’s biggest market can bend global commerce to its will. The White House’s bet is that dismantling the old order, once policed—however fitfully—by the World Trade Organisation, will usher in a new one with America at its centre. More

Treasury Secretary Scott Bessent said he will begin interviewing candidates for Fed chair soon as the White House whittles down what has suddenly become a crowded field of 11 candidates.
In a CNBC “Squawk Box” interview, Bessent repeated the administration’s desire for easing, saying it would help the moribund U.S. housing market.

Treasury Secretary Scott Bessent said Tuesday he will begin interviewing candidates for Federal Reserve chair as soon as the White House whittles down what has suddenly become a crowded field.
In a CNBC “Squawk Box” interview, Bessent confirmed the race to replace current Chair Jerome Powell is between 11 candidates, an array that includes past and present central bank officials as well as economists, a White House advisor and a few Wall Street market experts.

“In terms of the interview process, we’ve announced 11 very strong candidates. I’m going to be meeting with them probably right after, Labor Day, and to start bringing down the list to present to President Trump,” he said. “It’s an incredible group.”
That list is believed to include current governors Michelle Bowman and Christopher Waller, Dallas Fed President Lorie Logan, White House economist Kevin Hassett and former governor Kevin Warsh. Strategists Rick Rieder of BlackRock and David Zervos of Jefferies also are part of the group, as well as economist Marc Sumerlin, former governor Larry Lindsey and former St. Louis Fed President James Bullard.
Though Powell’s term does not end until May 2026, the White House is keen to get the process moving as it pushes an urgent need for interest rate cuts.
Bessent repeated the administration’s desire for easing, saying it would help the moribund U.S. housing market. Sales and new building have been weak, with low inventory pushing prices higher.
“If we keep constraining home building, then what kind of inflation does that create one or two years out?” he said. “So a big cut here could facilitate a boom or a pickup in home building, which will keep prices down one two years down the road.”

The Fed does not have a policy meeting again until Sept. 16-17, where it is widely expected to approve its first quarter percentage point reduction since December 2024. Bessent said he was not concerned about a producer price index reading for July that showed the largest monthly increase in three years, as he attributed much it to a rise in portfolio fees tied to higher stock market values.
Before then, Powell on Friday will give what is likely his final keynote address at the Fed’s annual symposium in Jackson Hole, Wyo. That speech could focus on a review the Fed does every five years of its policy, but Powell also may choose to tip the Fed’s hand on the September vote. More

Occam’s Razor is a cornerstone of the social sciences, and for financial economists it is almost an article of faith. The principle is named after William of Ockham, a 14th-century monk. It holds that the simplest explanation for any phenomenon is the best. Financial analysts today live in fear of “overfitting”: producing a model that, by dint of its complexity, maps onto existing data well, while predicting the future poorly. Now, though, Ockham is on trial. New research suggests that, when it comes to big machine-learning models, parsimony is overrated and complexity might be king. If that is true, the methods of modern investing will be upended. More