It is not difficult to spot the change. Bookshops now dedicate entire sections to financial guides. Trains are plastered with advertisements for investing seminars. Financial influencers command enormous online audiences with tutorials on how to build a portfolio or open a brokerage account. As Ponchiyo, a 31-year-old YouTuber with almost 500,000 subscribers, puts it: “People are realising it is wasteful to leave money sitting in savings.” More
Fed officials diverged at their June 17-18 meeting about how aggressively they would be willing to cut interest rates.
They were split between concerns over tariff-fueled inflation and signs of labor market weakness and economic strength.
Chair of the US Federal Reserve Jerome Powell speaks during a press conference following the Federal Open Market Committee meeting in Washington, DC, on June 18, 2025.
Saul Loeb | Afp | Getty Images
Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates, split between concerns over tariff-fueled inflation and signs of labor market weakness and economic strength.
Minutes from the June 17-18 meeting released Wednesday showed that policymakers largely held to a wait-and-see position on future rate moves. The meeting ended with Federal Open Market Committee members voting unanimously to hold the central bank’s key borrowing rate in a range between 4.25%-4.5%, where it has been since December 2024.
However, the summary also showed a growing divide over how policy should proceed from here.
“Most participants assessed that some reduction in the target range for the federal funds rate this year would likely be appropriate,” the minutes said, as officials saw tariff-induced inflation pressures as potentially “temporary and modest” while economic growth and hiring could weaken.
How far the cuts could go, though, was a matter of debate.
Opinions ranged from a “couple” officials who said the next cut could come as soon as this month to “some” who thought no reductions this year would be appropriate. Though the minutes do not mention names, Fed Governors Michelle Bowman and Christopher Waller have gone on record saying they could see their way to cutting rates as soon as the July 29-30 Fed meeting if inflation stays under control.
At the same time, “several” officials said they thought the current overnight funds rate “may not be far” from a neutral level, meaning only a few cuts may be ahead. Those officials cited inflation still above the 2% goal amid a “resilient” economy.
In Fed parlance, some is more than several.
Officials at the meeting updated their projections for rate cuts, expecting two this year followed by three more over the next couple years. However, the “dot plot” of individual members’ outlooks reflected division over the extent of cuts.
The release comes with President Donald Trump ramping up pressure on Fed Chair Jerome Powell and his cohorts to cut aggressively. In public statements and on his Truth Social site, Trump has lambasted Powell, going as far to call for his resignation.
Powell has said repeatedly that he won’t bow to political pressure when it comes to setting monetary policy. For the most part, he has joined the cautious approach, insisting that with a strong economy and uncertainty over inflation, the Fed is in a good position to stay on hold until it has more information.
The minutes largely reflect that stance that policy is currently well positioned to respond to changes in the data.
“Participants agreed that although uncertainty about inflation and the economic outlook had decreased, it remained appropriate to take a careful approach in adjusting monetary policy,” the document stated.
Officials also noted that they “might face difficult tradeoffs if elevated inflation proved to be more persistent while the outlook for employment weakened.” In that case, they said they would weigh which side was further from its goal in formulating policy.
Since the meeting, Trump has continued negotiations with key U.S. trading partners, with the tariff ground shifting on a near-daily basis. Trump initially announced tariffs on April 2, and then has altered deadlines for agreements, most recently ticking off a series of letters to foreign leaders notifying them of looming levies should they not act.
Recent data indicate that Trump’s tariffs have not fed into prices, at least on a large scale.
The consumer price index showed an increase of just 0.1% in May. While inflation gauges are still mostly above the Fed’s 2% target, recent sentiment surveys show the public is growing less fearful of inflation further down the road.
“Many participants noted that the eventual effect of tariffs on inflation could be more limited if trade deals are reached soon, if firms are able to quickly adjust their supply chains, or if firms can use other margins of adjustment to reduce their exposure to the effects of tariffs,” the minutes stated.
At the same time, job gains have slowed considerably, though the rate of nonfarm payrolls growth has consistently surprised economists. June showed an increase of 147,000, against the consensus forecast for 110,000, while the unemployment rate unexpectedly fell to 4.1%.
Consumer spending has slowed considerably. Personal expenditures declined 0.1% in May, while retail sales tumbled 0.9%.
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In a more predictable world, stocks would be easy to price. A share gives its owner claim to a series of cash flows, such as dividends and earnings. Investors would forecast the future value of each, then discount it to a present value based on prevailing interest rates, the riskiness of the cash flow and their own risk appetite. Add them all up, and that would be the stock’s price. More
The next Fed chair faces an additional burden: credibility issues now that President Donald Trump has stepped up efforts to exert a heavy hand on monetary policy.
Trump reportedly is considering naming a “shadow chair” until the current occupant, Jerome Powell, leaves office next year, in an attempt to pressure the Fed into cutting rates.
“The real loser here is not Jay Powell but his successor,” TS Lombard economist Dario Perkins wrote. “We don’t even know who that person is, and already there are strong doubts about their integrity and what sort of ‘deal’ they have made to secure the position.”
The silhouette of a pedestrian is seen walking past the Marriner S. Eccles Federal Reserve building in Washington, D.C
Andrew Harrer | Bloomberg | Getty Images
If leading the Federal Reserve isn’t challenging enough, the next central bank chair faces an additional burden: credibility issues now that President Donald Trump has stepped up efforts to exert a heavy hand on monetary policy.
Whoever the successful candidate is could carry the specter of being there simply to do Trump’s bidding on interest rates, violating the Fed’s traditionally apolitical veneer.
To exert more influence in the near term, Trump reportedly is considering naming a “shadow chair” until the current occupant, Jerome Powell, leaves office next year, in an attempt to pressure the Fed into cutting rates.
The prospect leaves a series of thorny questions.
Beyond the awkward logistics of such an arrangement, there are potentially troublesome implications both institutionally for the Fed and for financial markets that count on it to make data-driven decisions free of outside influence.
“Naturally, this is an idea that leaves many investors feeling uneasy,” Dario Perkins, senior European economist at TS Lombard, said in a note Tuesday titled “Can We Trust the Next Fed Chair?” “Suddenly all the talk is of the Fed ‘losing independence’ and of there being a new era of ‘fiscal dominance’ – not helped by the fact that Trump is explicitly linking his demand for lower rates to reducing debt-servicing costs.”
Indeed, Fed officials generally make decisions in service to their twin goals, or “dual mandate,” namely to promote stable inflation or full employment.
What Trump has been demanding is different — he has been hectoring Powell and his fellow Federal Open Market Committee officials, in increasingly belligerent terms, to cut rates to lower financing costs for the government’s ever-burgeoning debt load. Trump insists the Fed could save taxpayers some $800 billion by aggressively lowering its overnight funds rate, which currently sits at 4.33%.
Powell and his predecessors have repeatedly held the line that the public fiscal situation does not and will not play a role in rate decisions. Veering outside the traditional Fed decision-making parameters would pose further questions for the next chair’s credibility.
Advantages and disadvantages
“The real loser here is not Jay Powell but his successor,” Perkins wrote. “We don’t even know who that person is, and already there are strong doubts about their integrity and what sort of ‘deal’ they have made to secure the position. But it seems pretty clear that Powell’s replacement will come with a ‘tacit understanding’ to cut rates.”
To be sure, central bank experts acknowledge that there is some benefit to Trump wanting to get ahead of the game in naming the next Fed chair.
In fact, there usually is some lead time between when presidents announce chair nominees and when they are actually seated. For instance, Powell was nominated in November 2017 while Janet Yellen was still chair, then confirmed the following February.
Powell’s term as chair ends in May 2026, so nominating a successor perhaps a few months early would give the prospective nominee the chance to get through the Senate confirmation process and bone up on the myriad responsibilities that the position carries.
But Trump’s idea is different.
Such a “shadow chair,” under the market’s understanding and in conjunction with statements that Trump and his lieutenants have made on the matter, would be in place almost explicitly to undermine Powell. Should Powell not budge on pushing for rate cuts, the shadow chair could simply make public statements contrary to that position.
However, finding a candidate to fill that role might not be so easy considering the reputational risks.
“From the perspective of the nominee, there’s nothing good about being nominated far out in advance and being expected to serve as a shadow Fed chair. That can only end poorly,” said Lev Menand, an associate professor of law at Columbia Law School and author of the 2022 book, “The Fed Unbound: Central Banking in a Time of Crisis.”
“It could lead to reputational harm. It could lead to pressure on you to say or do things in the run-up to actually taking office that you don’t want to say or do,” he added. “It could lead to your nomination being yanked. It could lead to all sorts of bad things. So there’s nobody who’s seeking the Fed chair job who’s going to want to be put up early, except someone who’s told you won’t otherwise get it.”
Markets might not like it
Treasury Secretary Scott Bessent has been mentioned prominently as a potential Powell replacement, along with several others.
In an Oct. 9, 2024, interview with Barron’s, less than a month before Trump’s election victory, Bessent said, “You could do the earliest Fed nomination and create a shadow Fed chair.” In such a case, “no one is really going to care what Jerome Powell has to say anymore.”
How financial markets would react to such a scenario is unclear. Wall Street is notorious for disliking uncertainty, especially with something as sensitive as monetary policy.
The last time the Fed cut rates, in late 2024, stocks rose but so did Treasury yields while the dollar fell. Rate cuts on the scale Trump is seeking — 2 percentage points or even more — could stoke inflation fears and send Treasury yields higher again.
“A good case could be made for nominating the next Fed chair a few months before the handover in May 2026,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a recent note. “But nominating the next Fed chair now with the expectation that this person would be an active alternative voice on monetary policy for the best part of year would confuse the market, making it harder for the Fed to shape rate expectations and potentially … in ways that would not help advance rate cuts.”
Trump has a further set of logistics to navigate as he pushes his desire for lower rates.
Rate cuts aren’t certain
There is only one upcoming vacancy on the board of governors, with Adriana Kugler’s term up at the end of January 2026.
Powell’s time as chair runs out in May 2026, but he can stay on as governor until 2028. In the past, most Fed chairs have stepped down after the time at the helm ended; should Powell not go that route, he would then force Trump to name a current sitting governor as his successor, eliminating presumptive candidates such as Bessent, former Governor Kevin Warsh and current National Economic Council leader Kevin Hassett.
Moreover, the chair is just one voter out of 12 on the Federal Open Market Committee. While there currently are disparate views from policymakers on how quickly rates should come down, there are no members who have indicated they support the kind of cuts Trump seeks.
Investors will get a further peek into the Fed’s thinking when minutes of the June FOMC meeting are released Wednesday.
“This is all somewhat unprecedented how things would develop,” Menand said. “But I think that it’s safe to say that depending on how it’s rolled out, it could really ultimately unsettle expectations and change how some of these dynamics unfold in the fall.”
Markets expect the Fed will start cutting again in September, but the path from there is unclear. Should Trump name the shadow chair in the fall, it comes with the risk of both unsettling markets, and of causing problems for whomever he picks.
“Depending on who it is, it could have no effect, really at all, on Powell’s ability to govern for the remainder of his term, or it could actually be quite disruptive,” Menand added. “What would actually happen if the person was named in advance? The devil would be in the details.”
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Top executives from tech, media and finance gathered in Sun Valley, Idaho, for Allen & Co.’s annual conference this week.
The gathering is often referred to as “summer camp for billionaires.”
Apple CEO Tim Cook, Walmart CEO Doug McMillon, Disney CEO Bob Iger and OpenAI CEO Sam Altman were pictured entering the lodge.
Top executives from tech, media and finance gathered in Sun Valley, Idaho, for Allen & Co.’s annual conference this week, an event that is often referred to as “summer camp for billionaires.”
Apple CEO Tim Cook, Walmart CEO Doug McMillon, Disney CEO Bob Iger and OpenAI CEO Sam Altman were all pictured entering the lodge.
Wednesday’s agenda includes interviews with Amazon CEO Andy Jassy, Treasury Secretary Scott Bessent and IAC Chairman Barry Diller, sources told CNBC’s Julia Boorstin.
When he arrived on Tuesday, Altman said he is not concerned about the artificial intelligence talent war and that he would talk to Meta CEO Mark Zuckerberg this week.
Scroll down to see the tech and media moguls arriving at the exclusive event.
Apple CEO Tim Cook
Tim Cook arrives for the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David Grogan | CNBC
Comcast CEO Brian Roberts and Disney CEO Bob Iger
Brian Roberts, CEO of Comcast, and Bob Iger (R), CEO of Walt Disney Co., attend the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
TV host Gayle King
Gayle King attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
OpenAI CEO Sam Altman
Sam Altman, CEO of OpenAI, attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
GM CEO Mary Barra
Mary Barra, CEO of General Motors, attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Spanx founder Sara Blakely
Sara Blakely, founder of Spanx, arrives for the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Walmart CEO Doug McMillon
Doug McMillon, CEO of Walmart, arrives for the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Entertainment executive Casey Wasserman
Casey Wasserman, CEO of Wasserman Media Group, arrives for the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Boston Red Sox and Liverpool FC owner John Henry
John Henry attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
OpenAI Chair Bret Taylor
Bret Taylor, chairman of the board of directors of OpenAI, attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Warner Bros. Discovery CEO David Zaslav
David Zaslav, CEO of Warner Bros. Discovery, attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Home Depot co-founder Ken Langone
Ken Langone attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC
Billionaire investor Stanley Druckenmiller
Stanley Druckenmiller attends the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.
David A. Grogan | CNBC More
President Trump signed a so-called big beautiful bill on July 4 that nearly halves annual funding for the Consumer Financial Protection Bureau.
CFPB funding would fall to 6.5% of the annual operating expenses of the Federal Reserve, down from 12%. That’s the lowest share in agency history.
Consumer advocates say the funding will weaken the bureau’s ability to police financial firms and consumer financial laws.
A view of the Consumer Financial Protection Bureau headquarters in Washington.
Saul Loeb | Afp | Getty Images
A massive tax and spending law that President Donald Trump signed last week slashes the Consumer Financial Protection Bureau’s annual budget — and critics of the move say they fear it may lead to less oversight of financial firms and bring more harm to consumers.
“There’s no way to paint a positive picture about it,” said Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group.
The CFPB was created in the wake of the 2008 financial crisis to serve as a single agency policing the financial ecosystem for consumer harm, a function previously scattered among multiple regulators.
The watchdog has overseen banks, payday lenders, credit bureaus, debt collectors, student loan servicers, private student lenders and other financial firms.
‘Half a David’ versus Goliath
Unlike most federal agencies, the CFPB’s budget isn’t provided by congressional appropriations. The structure — the constitutionality of which was upheld by the Supreme Court last year — was meant to insulate it from politics.
Instead, the CFPB is funded via the Federal Reserve.
The CFPB’s annual funding for the 2025 fiscal year is capped at 12% of the operating expenses of the Federal Reserve System. This fixed percentage has been in place since the 2013 fiscal year.
The so-called big beautiful bill that Trump signed into law on July 4 nearly halves that cap, lowering it to 6.5%.
Activists participate in a rally outside the Consumer Financial Protection Bureau on March 24, 2025 in Washington. Activists held a rally to support federal workers affected by DOGE cuts.
Alex Wong | Getty Images News | Getty Images
The CFPB’s funding limit, which is adjusted each year for inflation, is $823 million for the 2025 fiscal year, which ends Sept. 30, according to the Congressional Research Service. (It has risen from $598 million in 2013.)
With a 6.5% cap, the CFPB’s funding would have been maxed out at $446 million this year, a roughly 46% reduction.
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Chi Chi Wu, director of consumer reporting and data advocacy at the National Consumer Law Center, said a slimmer budget would likely mean greater challenges with policing financial firms, especially large institutions.
“It takes a lot of resources to go after the big dogs,” Wu said.
“It was already David and Goliath,” she said. “This just makes the situation worse. Now you have half a David.”
The CFPB didn’t return a request for comment.
Same watchdog duties, less money
The CFPB has three primary functions, Wu said: enforcement of laws on the books; supervising financial firms (kind of like a bank examiner, but with a consumer protection mission); and fielding consumer complaints.
The agency recouped $21 billion in relief for more than 205 million consumers since its inception, according to CFPB data as of Dec. 3.
Over that time it had imposed more than $5 billion of penalties on financial firms and fielded about 7 million consumer complaints, the majority of which were about credit reports, according to agency data.
“The agency is still seemingly going to have the same responsibilities, just with less money to carry them out,” said Eamonn Moran, a financial services attorney at law firm Holland & Knight and former CFPB counsel during the Obama administration.
Senate Republicans had initially sought to cut the CFPB’s budget to zero, a move the Senate parliamentarian deemed a violation of the chamber’s rules.
Sen. Tim Scott, R-S.C., chair of the Senate Banking, Housing, and Urban Affairs Committee, said in a June 26 statement that reducing the CFPB’s budget cap helps “reduce waste and duplication in financial regulation” without affecting its “statutory functions.”
Rust, of the Consumer Federation of America, questioned whether the CFPB would be able to fulfill its core functions in a “weakened state.”
May not be much difference under Trump
CFPB officials haven’t ever maxed out their annual spending limit, though funding requests generally wax and wane with changing leadership, the Congressional Research Service wrote on June 16.
For example, the largest shortfall was $282 million during the 2018 fiscal year, during Trump’s first term in office, while the lowest was $30 million in 2023 under former President Joe Biden, CRS said.
Some experts say they think a reduced funding amount may not matter much during Trump’s second term.
“It’s not really, in my view, going to be a notable departure from what we’ve seen since the end of January,” Moran said.
For example, acting CFPB Director Russell Vought proposed cutting staff from 1,700 to 200 people, both reducing its budget and possibly agency operations, CRS wrote in June.
That move is currently being weighed in federal court. The Supreme Court on Tuesday allowed the Trump administration to move forward with mass layoffs across government, but said the high court wasn’t expressing its legal views on any specific agency’s cuts. It’s unclear what this means for the CFPB case.
“People aren’t expecting anything big regulatory-wise coming out of the CFPB for the next few years,” Moran said.
However, funding could matter more during future administrations, experts said.
“This is a funding cut that goes beyond the next 3½ years,” Wu said. More
Investors may want to consider bracing for a weaker stock market performance over the next six months.
According to Vanguard’s Roger Hallam, it’s prudent for long-term investors to have sufficient exposure to fixed income in this environment.
“Our outlook for the second half of this year is that growth will slow,” the firm’s global head of rates told CNBC’s “ETF Edge” on Monday.
Hallam predicts the labor market will continue to gradually cool while inflation rises. Hallam expects the Federal Reserve will ultimately prioritize jobs and cut interest rates toward the end of this year to provide insurance.
“We think that will provide a tailwind for bonds,” he said. “So, we’re confident in the outlook for fixed income, and we think… clients should be allocating to fixed income.”
Vanguard is behind three U.S. government bond exchange-traded funds debuting this week. The launch includes the Vanguard Government Securities Active ETF (VGVT).
Arrows pointing outwards
The firm’s prospectus shows U.S. Treasurys hold the largest exposure in the new ETF. The benchmark 10-year Treasury note yield started 2025 at about 4.57% and has since fallen to roughly 4.4% as of Tuesday.
Meanwhile, BlackRock’s Jay Jacobs sees a barbell approach as a valuable second-half strategy as a hedge against economic slowdown risks.
“I think we’re still going to see a lot of money that’s been in cash for a long time … start to inch their way back into the equity markets,” the firm’s U.S. head of equity ETFs said in the same interview.
He expects buffer ETFs, which are designed to protect against the downside and still give a measure of upside performance, to benefit from the risk backdrop.
BlackRock offers six buffer ETFs, according to the firm’s website, including iShares Large Cap Max Buffer Jun ETF (MAXJ). The fund is up 5% so far this year and tracks the share price return of the iShares Core S&P 500 ETF.
“Our fund MAXJ recently reset, giving a cap of up to 7% exposure to the S&P over the next year. A tool like that is going to be very much in vogue for investors looking to get back into the markets,” Jacobs said, adding investors will likely play offense and will continue to migrate toward strong macro themes such as artificial intelligence.
Jacobs also lists infrastructure as a key group.
“As we continue to see geopolitics and fragmentation around the world impact markets, I think people are going to be looking at really powerful macro trends like the growth of infrastructure in the United States as a way to place their bets in the equity markets,” Jacobs said.
Disclaimer More
In the first cold war between America and the Soviet Union, the two superpowers fought each other by proxy. Something similar is happening in America’s trade war with China. After conciliatory talks in Geneva and London, the two sides are no longer bashing each other with new tariffs. Instead, America is waging its war indirectly, through unfortunate third countries. More
