Personal Finance
Trump promises lower interest rates, Fed chair Powell responds
Republican presidential nominee and former U.S. President Donald Trump speaks on a panel of the National Association of Black Journalists (NABJ) convention in Chicago, Illinois, U.S. July 31, 2024.
Vincent Alban | Reuters
At the National Association of Black Journalists‘ annual convention in Chicago on Wednesday, former President Donald Trump said inflation and high interest rates are “destroying our country.”
The Republican presidential nominee said if elected, he would “bring interest rates way down.”
“I bring inflation way down, so people can buy bacon again, so people can buy a ham sandwich again, so that people can go to a restaurant and afford it,” he said.
The president, however, exerts no direct control over interest rates. The Federal Reserve sets interest rates, and it operates independently of the White House.
Inflation has been a persistent problem since the Covid-19 pandemic, when price increases soared to their highest levels in more than 40 years. The Federal Reserve — which sets interest rates — responded with a series of rate hikes to effectively pump the brakes on the economy in an effort to get inflation under control.
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Now, recent economic data indicates that inflation is falling back toward the Fed’s 2% target, paving the way for the central bank to lower its benchmark rate for the first time in years. The personal consumption expenditures price index — the Fed’s preferred inflation gauge — showed a rise of 2.5% year over year in June.
The federal funds rate, which sets overnight borrowing costs for banks but also influences consumer borrowing costs, is currently targeted in a range of 5.25% to 5.50%, the result of 11 rate increases between March 2022 and July 2023.
Once that rate comes down, consumers may see their borrowing costs fall as well.
‘A highly consequential year’
A contentious history
Trump, who nominated Powell to head of the nation’s central bank in 2018, became a fierce critic of the Fed chief and his colleagues, skirting historical precedent while in office by repeatedly and publicly berating the Fed’s decision-making.
During his tenure in the White House, Trump complained that the central bank maintained a fed funds rate that was too high, making it harder for businesses and consumers to borrow and putting the U.S. at an economic disadvantage to countries with lower rates.
Ultimately, though, Trump’s comments had no impact on the Fed’s benchmark.
“Any chairman is going to remain loyal to the Fed’s mandate over any browbeating from the White House,” said Brett House, economics professor at Columbia Business School.
Earlier this year, the former president told Fox Business that he would not reappoint Powell to lead the Fed. “I think he’s political,” Trump said. “I think he’s going to do something to probably help the Democrats, I think, if he lowers interest rates.”
Trump also told Bloomberg Businessweek in an interview in July that cutting rates just weeks ahead of the presidential election in November is “something that [central bank officials] know they shouldn’t be doing.”
When asked about these comments Wednesday, Powell underscored the Fed’s singular focus on the economy. (The central bank has a few main goals with respect to the economy: to promote maximum employment, keep prices stable and ensure moderate long-term interest rates.)
“We don’t change anything in our approach to address other factors like the political calendar,” Powell said. “We never use our tools to support or oppose a political party, a politician or any political outcome.”
The central bank is an independent agency that governs decisions about monetary policy without interference from the president or any branch of government. Therefore, it is theoretically free from political pressure.
“The Fed will staunchly defend their independence regardless of who is president,” said Greg McBride, chief financial analyst at Bankrate.com.
The election effect on interest rate policy
In previous presidential election cycles, the Fed has maintained its charted course through the election, whether that was tightening as in 2004, cutting in 2008 or remaining on hold as in 1996, 2012 and 2020, according to a research report by Wells Fargo released in February.
Further, since 1994, the Fed adjusted its policy rate roughly the same number of times in presidential election years as in non-election years, the report said.
A separate research note by Barclays also found “no compelling statistical evidence that Federal Reserve policy is conducted differently during presidential elections.”
The escalating battle between the Trump administration and Harvard University over international student visas could come at a high economic cost.
Altogether, international students who studied in the U.S. contributed $43.8 billion to the U.S. economy in the 2023-24 academic year, according to the most recent data by NAFSA: Association of International Educators. In Massachusetts, alone, international students contributed nearly $4 billion and supported more than 35,000 jobs.
At Harvard, the share of international students is disproportionately high compared to most other colleges and universities. International students accounted for 27% of Harvard’s total enrollment in the 2024-25 academic year, up from 22.5% a decade earlier.
With more than 6,000 international students, Harvard supports over 1,125 local jobs and contributes $180 million to the greater Boston economy, largely through student spending, according to a new analysis by Implan, an economic software and analysis company.
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A ban on international enrollment could destabilize a vital revenue stream, said Bjorn Markeson, an economist at Implan.
“Because Harvard has a very high international student population, it’s going to have more of that impact,” Markeson said. “The economy is a network structure, so dollars flow through. They don’t just stay in one place — and when something hits Boston, it affects New England as a whole.”
A Harvard University student walks through Harvard’s campus.
Erin Clark | Boston Globe | Getty Images
Schools have increasingly sought out international students “because they compliment the student body, and that benefits all students,” said Robert Franek, The Princeton Review’s editor-in-chief.
But foreign students also typically pay full tuition, which makes international enrollment an important source of revenue for Harvard and many colleges and universities in the U.S., according to Franek.
Where the Trump, Harvard battle stands
For now, the fate of international enrollment at Harvard and elsewhere is still up in the air.
Tensions between the federal government and the Ivy League university have continued to escalate after Harvard in April refused to meet a set of demands issued by the Trump administration’s Task Force to Combat Anti-Semitism.
In May, President Donald Trump attempted to ban Harvard from enrolling international students, but a federal judge issued a temporary restraining order on Friday “to maintain the status quo.”
U.S. District Judge Allison Burroughs said the restraining order would remain in effect until June 20. Meanwhile, Harvard President Alan Garber said that “contingency plans are being developed to ensure that international students and scholars can continue to pursue their work at Harvard this summer and through the coming academic year.”
In an interview with NBC News on Friday, U.S. Secretary of Education Linda McMahon said Harvard needs to do more to combat antisemitism on campus and screen admissions of foreign students.
A sign in front of the entrance of the Security Administration’s main campus on March 19, 2025 in Woodlawn, Maryland.
Kayla Bartkowski | Getty Images
The Supreme Court on Friday granted the Department of Government Efficiency access to Social Security Administration data that includes sensitive personal information of millions of Americans.
The decision comes as the federal government sought a stay, or temporary suspension, after a federal judge blocked DOGE’s access to that data in April. The nation’s highest court granted an emergency application from the Trump administration to lift that injunction; the case is expected to proceed in lower courts.
In its decision, the Supreme Court concluded the Social Security Administration may give DOGE access to agency records while the case plays out “in order for those members to do their work.”
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Both the White House and the Social Security Administration called the Supreme Court decision a victory. In a statement, White House spokesperson Elizabeth Huston said it will allow the Trump administration to “carry out commonsense efforts to eliminate waste, fraud and abuse and modernize government information systems.”
Likewise, Social Security Commissioner Frank Bisignano in a statement said the agency “will continue driving forward modernization efforts, streamlining government systems, and ensuring improved service and outcomes for our beneficiaries.”
Yet others expressed grave concern in reaction to the decision, including Justice Ketanji Brown Jackson, advocacy groups and plaintiffs in the case against DOGE and the Social Security Administration.
“This is a sad day for our democracy and a scary day for millions of people,” said the coalition of plaintiffs including American Federation of State, County and Municipal Employees; the American Federation of Teachers; and the Alliance for Retired Americans, who are represented by Democracy Forward.
“This ruling will enable President Trump and DOGE’s affiliates to steal Americans’ private and personal data,” they said, while vowing to “use every legal tool at our disposal” to prevent the misuse of public data as the case moves forward.
Millions of Americans’ sensitive data at stake
The dispute focuses on how much access DOGE should have to Americans’ personal data.
The plaintiffs filed an initial complaint in early March, stating the Social Security Administration had “abandoned its commitment to maintaining the privacy” of the sensitive personal information of millions of Americans under DOGE’s influence.
The Social Security Administration collects and stores some of the “most sensitive” personally identifiable information of millions of Americans, ranging from seniors to adults to children, the complaint notes.
When applying for a Social Security number, the agency requires the disclosure of place and date of birth, citizenship, ethnicity, race, sex, phone number and mailing address. It also requires parents’ names and Social Security numbers.
But the agency is also privy to other personal data, including personal health information, the complaint notes. That includes:
- driver’s license and identification information
- bank and credit cards
- birth and marriage certificates
- pension information
- home and work addresses
- school records
- immigration and naturalization records
- family court records
- employment and employer records
- psychological and psychiatric health records
- hospitalization records
- addiction treatment records
- records for HIV/AIDS tests
The Social Security Administration also collects tax information, including total earnings, Social Security and Medicare wages and annual employee withholdings.
DOGE has not only accessed the agency’s sensitive and protected information; it has also publicly shared it, according to the complaint. The actions of the defendants, including the Social Security Administration, DOGE and leaders including former head Elon Musk, have deprived Americans of privacy protections guaranteed by federal law and made their personal information vulnerable, the complaint alleges.
In her dissent, Jackson, joined by Justice Sonia Sotomayor, notes that records show “DOGE received far broader data access” than the Social Security Administration usually allows in fraud, waste and abuse investigations. Typically, those investigations start with high level, anonymized data, with more access to more detailed information only granted as necessary.
Justice Elena Kagan also dissented in the 6-3 decision.
“The government wants to give DOGE unfettered access to this personal, non-anonymized information right now – before the courts have time to assess whether DOGE’s access is lawful,” Justice Jackson wrote.
While litigation is pending, the government has asked to temporarily suspend the lower court’s temporary limitations on DOGE’s access to Social Security data, she noted.
“But the government fails to substantiate its stay request by showing that it or the public will suffer irreparable harm absent the court’s intervention,” Justice Jackson wrote.
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