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    Trump Softens Tone on Inflation After Pledging to Lower Prices

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    President Trump pledged to lower costs on “Day 1” as a candidate. His administration now acknowledges it will take more time.President Trump promised voters that, if elected, he would enact policies that would bring prices down on “Day 1” in office.But three weeks into his term, Mr. Trump and White House officials have become more measured in how they discuss their efforts to tame inflation. They have begun downplaying the likelihood that consumer costs like groceries will decline anytime soon, reflecting the limited power that presidents have to control prices. Those are largely determined by global economic forces.The shifting tone could allow Mr. Trump to reset expectations about how fast prices will come down as he pursues policies like tariffs and tax cuts, which economists say could exacerbate inflation.Mr. Trump and his advisers believe that expanding American energy production and rolling back regulations will reduce costs. They also argue that some of Mr. Trump’s tax proposals, such as eliminating taxes on overtime, would curb inflation by giving workers more incentives to work longer hours, therefore expanding the labor force.But in an interview this week, Mr. Trump demurred when pressed about when families struggling with high prices would start to feel some relief. He suggested that his policies would make America a rich country, which would reduce the burden on consumers by, in theory, increasing their earnings.“I think we’re going to become a rich — look, we’re not that rich right now,” Mr. Trump said on Fox News. “We owe $36 trillion. That’s because we let all these nations take advantage of us.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Solid Labor Market Gives Fed Cover to Extend Rate Pause

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    Less than six months ago, Federal Reserve officials were wringing their hands about the state of the labor market. No major cracks had emerged, but monthly jobs growth had slowed and the unemployment rate was steadily ticking higher. In a bid to preserve the economy’s strength, the Fed took the unusual step of lowering interest rates by double the magnitude of its typical moves.Those concerns have since evaporated. Officials now exude a rare confidence that the labor market is strong and set to stay that way, providing them latitude to hold rates steady for awhile.The approach constitutes a strategic gamble, which economists by and large expect to work out. That suggests the central bank will take its time before lowering borrowing costs again and await clearer signs that price pressures are easing.“The jobs data just aren’t calling for lower rates right now,” said Jon Faust of the Center for Financial Economics at Johns Hopkins University, who was a senior adviser to the Fed chair, Jerome H. Powell. “If the labor market seriously broke, that may warrant a policy reaction, but other than that, it takes some progress on inflation.”Across a number of metrics, the labor market looks remarkably stable even as it has cooled. Monthly jobs growth has stayed solid and the unemployment rate has barely budged from its current level of 4.1 percent after rising over the summer. The number of Americans out of work and filing for weekly benefits remains low, too.“People can get jobs and employers can find workers,” said Mary C. Daly, president of the San Francisco Fed, in an interview earlier this week. “I don’t see any signs right now of weakening.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What Privatization of Fannie Mae and Freddie Mac Means

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    Fannie Mae and Freddie Mac were bailed out by the government during the housing crisis nearly 17 years ago. The Trump administration is considering letting them go private again.Fannie Mae and Freddie Mac, two giant mortgage finance firms, have been controlled by the federal government for nearly 17 years, but a long-dormant idea of making them private businesses is starting to make the rounds in Washington again.Scott Turner, the secretary of Housing and Urban Development, said in an interview this week that coordinating the effort to privatize the two firms would be his priority. One of President Trump’s backers, the hedge fund investor William A. Ackman, is calling on the president to quickly move forward on the privatization.But Fannie and Freddie underpin the nation’s $12 trillion mortgage market, so they need to be handled with care. Scott Bessent, the Treasury secretary, said last month that any plan for ending the so-called conservatorship of the two firms “should be carefully designed and executed.”The last time Mr. Trump was president, a number of his advisers took steps toward coming up with a plan for releasing Fannie Mae and Freddie Mac from government control. In the end, the first Trump administration took no action, and the Biden administration put the issue on the back burner.Here is a quick primer on why Fannie and Freddie are so critical to the mortgage market and some of the issues likely to come up in the debate over how to end the conservatorship.What do Fannie and Freddie do?“No conservatorship should be indefinite,” Scott Bessent, the Treasury secretary, wrote in a response to questions before his confirmation.Haiyun Jiang for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    What to Watch at the Federal Reserve’s First Meeting of 2025

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    The U.S. central bank is expected to hold interest rates steady as officials weigh a solid economy and rising inflation risks.The Federal Reserve is set to stand pat at its first gathering of 2025, pressing pause on interest rate cuts as policymakers take stock of how the world’s largest economy is faring.After lowering interest rates by a full percentage point last year — starting with a larger-than-usual half-point cut in September — central bank officials are at a turning point.A strong labor market has afforded the Fed room to move more slowly on reducing rates as it seeks to finish off its fight against high inflation. Officials see the economy as being in a “good place” and their policy settings as appropriate for an environment with receding recession risks but nagging concerns about inflation.Stoking fears are a spate of economic policies in the pipeline from President Trump, which include sweeping tariffs, mass deportations, widespread deregulatory efforts and lower taxes. The economic impact of those policies is unclear, but policymakers and economists appear most wary about the possibility of fresh price pressures at a time when progress on taming inflation has been bumpy.The Fed will release its January policy statement at 2 p.m. in Washington, and Jerome H. Powell, the Fed chair, will hold a news conference right after.Here is what to watch for on Wednesday.A prudent pauseA pause on interest rate cuts from the Fed has been an a highly expected outcome ever since Mr. Powell stressed this fall that the central bank was not “in a hurry” to bring them down.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Howard Lutnick, Trump’s Commerce Nominee, Discloses Business Interests

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    Howard Lutnick, the wealthy Wall Street executive whom President Trump has tapped to lead the Department of Commerce, detailed a complex network of financial holdings on Friday as he prepared to face scrutiny from lawmakers during a confirmation hearing next week.The financial disclosures showed that Mr. Lutnick, who has built a fortune in brokerages, real estate and financial services, holds at least $800 million in assets, though he is very likely wealthier than the disclosures reveal.They also laid out executive positions he has held or holds in more than 800 individual firms, and showed that he received in excess of $350 million in income, distributions and bonuses in the past two years from his network of financial services and real estate firms.In an ethics form filed with the government, Mr. Lutnick said he would divest stakes in the brokerage and real estate firms that have generated his wealth. But his network of business ties could still raise concerns about potential conflicts of interest, as he leads the way on government policies that could have significant effects on businesses and markets, potentially enriching former customers or business partners.As commerce secretary, Mr. Lutnick would take the lead on carrying out Mr. Trump’s trade plans, which include proposals to impose tariffs on a wide variety of countries. He would oversee an agency with an $11 billion budget and roughly 51,000 workers. Commerce has a vast mandate that includes promoting businesses abroad, restricting U.S. technology exports for national security concerns, along with investing in broadband infrastructure and semiconductor factories around the United States and many other responsibilities.Mr. Lutnick had worked on Wall Street for decades. He gained national attention when many of the employees at Cantor Fitzgerald, the brokerage firm where he was president and chief executive, died in the 2001 terrorist attack on the World Trade Center. Mr. Lutnick joined Cantor Fitzgerald in 1983, shortly after graduating college, and took over as president and chief executive in 1991.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Chose 8 Economic Experts Who Will Defend Tariffs and Lower Taxes

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    President-elect Donald J. Trump has moved beyond the team-of-rivals approach from his first term and chosen economic aides who will defend tariffs and tax cuts.Alan RappeportAna Swanson and President-elect Donald J. Trump put economic policy at the center of his campaign and, in assembling his economic team, has turned to a group of Wall Street executives, economists, lawyers and academics to help carry out his plans to cut taxes, impose tariffs and slash regulations.In contrast to his first term, when Mr. Trump installed advisers who had disparate views about areas like free trade and tariffs, the men the president-elect has selected this time around have, at least for now, professed to be in sync with his agenda.Still, it remains to be seen how well his advisers work together and whether those with more traditionally conservative views will be willing to go along with Mr. Trump’s unconventional approach to economic policy.Scott BessentTreasury SecretaryStefani Reynolds/BloombergWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Banks Are Racking Up Wins Even Before Trump Is Back in White House

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    Banks are on a winning streak, one that’s poised to intensify as President-elect Donald J. Trump takes office.Biden-appointed regulators at the Federal Reserve and other agencies presided over a relatively fruitless era of bank oversight. They tried to enact stricter rules for the nation’s biggest banks, hoping to create a stronger safety net for the financial system even if it cut into bank profits.But the rules were considered so onerous — including by some top Fed officials — that they died of their own ambitions.As proposals stalled, the foundation for existing bank oversight became increasingly shaky thanks to bank-friendly courts. During his first term, Mr. Trump appointed a slate of conservative judges who then slowly but significantly shifted the legal environment against strict federal oversight.The result? Big banks have been notching major victories that could allow them to avoid regulatory checks that were drawn up after the 2008 financial crisis, when weaknesses at the world’s largest lenders nearly toppled the global economy.And with Mr. Trump once again poised to run the White House, analysts predict that the regulations and supervisory practices that are supposed to prevent America’s biggest and most interconnected financial institutions from making risky bets could be further chipped away in the months ahead.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More