A Divided Fed

Plus: Cocaine and mustard gas, U.S. seizes oil tanker, billionaires in the White House, and more...

Yesterday, Fed officials lowered interest rates by a quarter-point, roughly in line with people's expectations. "The decision to cut for a third meeting in a row shifted interest rates to a new range of 3.5 percent to 3.75 percent," reports The New York Times. "It marked the fourth straight vote that was not backed by all members of the 12-person Federal Open Market Committee, demonstrating how fractured the central bank has become as it balances risks of rising unemployment and sticky inflation."

The rate cut was controversial among members of the Federal Reserve Board, who voted 9–3 in favor. (Two regional Fed presidents voted to leave rates unchanged and one board member opted for a larger cut.) The labor market keeps weakening, but inflation remains above the target. Board members are thus divided on how to tackle the situation.

"Our rates should be the lowest rates in the world," said President Donald Trump, who is interviewing Kevin Warsh today to succeed Jerome Powell as Fed chair. Trump seems poised to more explicitly pressure the Federal Reserve to do his bidding (though the idea of a wholly unpoliticized Fed was always a myth), especially once Powell has been replaced.

In his press conference, Powell basically fielded the same types of questions he's received a lot of in recent months—lots about coming disruption from the artificial intelligence sector—and repeated things we already know: that wealthy households are responsible for the still-elevated levels of consumer spending, effectively obscuring a bit of the economic pain felt by the middle and lower classes; that the immigration crackdown is responsible for low job growth numbers; and that official Bureau of Labor Statistics numbers are probably off, possibly overstating how much job growth there's been (when the reality is bleaker).

"If you get away from tariffs, inflation is in the low twos," said Powell, rightly placing blame at Trump's feet. "It's really tariffs."

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QUICK HITS

• "The United States has seized an oil tanker off the coast of Venezuela, President Trump announced on Wednesday, an escalation in his administration's pressure campaign against Nicolás Maduro, the leader of Venezuela," reports The New York Times. "The officials, who spoke on the condition of anonymity to describe a military operation, said that the seizure came after 'deliberate planning' and that there was no resistance from the crew. There were no casualties as part of the operation, the officials said."
• "Cocaine is not mustard gas," writes Jonah Goldberg for The Dispatch. "There's a reason presidents need authorization from Congress to launch a war."
• Speaking of: "The House on Wednesday approved a $900 billion defense policy bill that would codify much of President Trump's national security agenda but seek to curb his move to withdraw from Europe and to mandate more Pentagon consultation with Congress," reports The New York Times.
• "The Justice Department on Tuesday moved to end long-standing civil rights policies that prohibit local governments and organizations that receive federal funding from maintaining policies that disproportionately harm people of color," reports Politico. "The Civil Rights Act of 1964 prohibits discrimination on the basis of 'race, color, or national origin.' The Justice Department and the courts have historically interpreted the law as a ban on intentional discrimination as well as policies that, in practice, have a 'disparate impact' on one group of people. President Donald Trump signed an executive order in April that directed agencies to eliminate disparate-impact liability wherever possible." ("The prior 'disparate impact' regulations encouraged people to file lawsuits challenging racially neutral policies, without evidence of intentional discrimination," said Harmeet Dhillon, the Justice Department's civil rights chief. "Our rejection of this theory will restore true equality under the law by requiring proof of actual discrimination, rather than enforcing race- or sex-based quotas or assumptions.")
• "The world's richest man. The owner of the Houston Rockets. The former CEO of World Wrestling Entertainment. These are just some of the 12 billionaires—not including Trump—who have held roles in the Trump administration this year," reports The Washington Post, with palpable distaste. ("While previous administrations have included the ultrarich, the wealth held by this group is larger than even the first Trump administration, previously the wealthiest in U.S. history," adds the paper.) I, for one, am not triggered by wealthy, accomplished people doing things in government (more than I am triggered by anyone doing things in government), but enjoy your investigation, WaPo.
• They're trying to get him but they can't!

"Who said I didn't pray? They said I didn't, but I already explained on the plane—I mentioned a book ('The Practice of the Presence of God' by Brother Lawrence)—and perhaps I am praying even now."

— Christopher Hale (@chrisjollyhale) December 9, 2025