Where the Real Power in Finance Sits

Why the NYSE might have more influence over rates than the White House.

The tug-of-war between the White House and the Fed over interest rates is reaching a breaking point. Despite the President’s public push for cuts, Jerome Powell and his eleven FOMC votes hold exclusive control over the Fed Funds Rate. For now, Powell is sticking to the “data-dependent” script—but that data is shifting.

Employment has weakened meaningfully, with three straight months of downward revisions to hiring. This challenges the Fed’s healthy jobs mandate and gives them political and market cover to ease policy. Inflation tells a more nuanced story. Core goods prices, where tariff impacts show up, have risen to 1.17% year-over-year, but the climb has been gradual. Yesterday’s CPI print of 2.7% came in below expectations, sparking a rally and pushing September cut odds to 96%. Markets now expect two cuts by year-end, with nearly a coin-flip chance of a third.

The Fed’s next move will hinge on the final employment and inflation reports before September’s meeting. If they hold steady, Powell may have little choice but to follow the market’s lead. The real signal isn’t coming from Pennsylvania Avenue—it’s coming from 11 Wall Street, and it’s loud: cut rates now.

KEY TAKEAWAYS

• The Fed, not the President, controls interest rates

• Employment data has weakened with three months of downward revisions

• Core goods inflation is rising slowly but steadily

• Markets are pricing in two rate cuts by year-end, with high odds of one in September

• The Fed may be forced to follow the market’s lead

MY HOT TAKES

• Powell’s independence is under maximum political pressure

• Tariff-driven inflation is on the Fed’s radar but not yet an emergency

• The labor market’s weakness gives the Fed cover to cut

• Market expectations are boxing the Fed into action

• Wall Street, not Washington, is setting the tone for rates

• You can quote me: “In 2025, the strongest signal to the Fed is coming from 11 Wall Street, not the White House."