Federal Reserve Chair Jerome Powell has been under pressure before, but the events of this week might have him sweating through his crisp collared shirts. The central bank cut interest rates at its meeting yesterday by a quarter point, to a range of 4.5%–4.75%, in response to cooling inflation. But the real action came at the press conference after the meeting.

Powell replied to reporters’ questions about his future amid speculation that President-elect Trump might try to sack him, saying the president does not have the power to fire or demote him. “Not permitted under the law,” Powell said. He also remained expectedly noncommittal about the Fed’s plans for more rate cuts.

Business as usual? Economists predicted this cut would kick off a season of cuts, one in December and more in 2025. But those plans were thrown into flux after the election, as investors now predict that Trump’s proposed policy plans—namely tax cuts, tariffs, and deportations—may increase the inflation that Powell and his team managed to tame.

The White House is not the Fed

Trump and the Fed didn’t have a starry-eyed relationship in Trump’s last term—he called Powell, whom he appointed, an “enemy” and criticized the agency for not cutting rates. Financial policymakers typically view elections as data points but don’t allow the outcome to impact their decisions.

What the president can’t do: Bring down rates. Interest rates are set by the Fed, which was granted independence from Congress in 1951 so that central bankers could make hard decisions for the long-term health of the economy, even if it hurts politicians by frustrating consumers.

What the president can do: Appoint new people to lead the agency. Powell’s term ends in May 2026, at which point Trump will likely select someone else to take charge. (The Fed Chair needs Senate approval.)

Zoom out: The Fed is independent for a reason. The last time a president got too involved, it was Richard Nixon, and economists blame his insistence on keeping rates low for the Great Inflation of the 1970s.—CC

President Biden promised a “peaceful and orderly transition.” In an address from the White House, Biden said he spoke with President-elect Trump and assured a peaceful transition of power because “that’s what the American people deserve.” He also complimented Vice President Harris for running an “inspiring” campaign, thanked election workers, and reiterated that US elections are fair and should be trusted. Much of the speech appeared to be directed at supporters of his and Harris, acknowledging that Trump’s victory was a setback but imploring them to stay engaged. “Giving up is unforgivable,” Biden said.

Updates on the Senate and House races. There’s still more counting to do, but control of the Senate and House of Representatives is becoming clear. The GOP is poised to retake the Senate, but Democrats picked up a small win when Sen. Jacky Rosen was declared the winner in Nevada yesterday, bringing the party’s likely total in the chamber to 47 compared to Republicans’ 53 (assuming Republican Dave McCormick’s narrow lead over incumbent Democrat Bob Casey holds in Pennsylvania). In the House, 30 races were still being tallied as of yesterday to determine which party will control the lower chamber. If the GOP were to flip the House, it would give Donald Trump full command of the government by a likely razor-thin margin.

Max is adding subscribers—and cracking down on moochers. The streaming service where you can watch both The Wire and 90 Day Fiancé increased its subscriber count by 7 million in Q3 to more than 110 million, outpacing Netflix in the quarter. Perhaps more pressing for binge-watchers is the news that the Warner Bros. Discovery platform plans to squelch password sharing, as Netflix and other streaming services have already done to increase revenue. On the company’s earnings call, CFO Gunnar Wiedenfels said Max will begin with “very soft messaging” in the next few months to encourage freeloaders to subscribe themselves before getting more hardcore about it in 2025 and 2026.—AE

Homeowners are turning a deep shade of purple, holding their breath for mortgage rates to follow the Fed’s interest rate cuts. And even after the cut in September and yesterday’s smaller cut, the average rate for a 30-year fixed mortgage was 6.79% as of yesterday, according to Freddie Mac. That’s up from ~4%, where rates hovered in the decade before the pandemic.

Mortgage rates have risen 67 basis points in the last five weeks, the most in two years, according to the Mortgage Bankers Association.

Wasn’t the Fed supposed to fix this? Despite how often mortgage and interest rates are discussed together, they aren’t directly linked. Economists are somewhat stumped that Fed cuts aren’t budging mortgage rates, but there are other factors at play:

• Mortgage rates loosely follow the US 10-year Treasury yield, which is heavily influenced by economic expectations.
• But as prediction markets leaned towards a Trump victory, it triggered a spike in the 10-year Treasury yield over concerns that his promised tax cuts and tariffs would drive up inflation.

Is it a seller’s or buyer’s market? Neither. And homeowners waiting around for those lower rates to refinance better bring a book or something because economists expect, at least in the near future, that rates will likely stay the same and could even inch a little higher.—MM

The rest of the world is getting ready to play international trade on a risky new chessboard: Goldman Sachs cut its next-year growth forecast for European countries this week, citing uncertainty around President-elect Donald Trump’s tariff plans.

Trump has said he will…place a 60% to 100% levy on products from China and at least a 10% levy on everything else the US imports. Tariffs can incentivize domestic industry by making it more expensive to produce overseas, but Trump’s proposal is so hefty that economists fear international tension at best and a large-scale trade war at worst.

In Europe, GDP across the 20 euro-spending countries is projected to grow 0.8% next year, down from an earlier outlook of 1.1%, per Goldman Sachs. Germany could take a big hit: Cars are its top export, and the US is its biggest export market, which spells trouble for Volkswagen.

In China, businesses may be more prepared to adapt because Trump’s “America First” policies already led to a US–China trade war during his first term, per Bloomberg. China could try to plug losses by pushing harder into European markets.

In Mexico, GDP could dip as much as 1.9% since the US is its main trading partner.

On the homefront, prices would likely spike as US businesses (which have to pay US tariffs) pass higher costs onto customers. Retaliatory tariffs around the world would also hurt US companies, especially those with big European markets.—ML

What’s ~$15 million between billionaire pals? HubSpot co-founder and CTO Dharmesh Shah posted on X that he recently sold the Chat.com domain, which he bought for $15.5 million last year, to OpenAI. Now, if you go to Chat.com, it redirects you to ChatGPT, which The Verge notes aligns with OpenAI’s effort to rebrand the generative AI chatbot as more approachable. Shah did not disclose precisely how much he made on the sale but hinted that the sum was largely paid in the form of OpenAI stock, as he’s known CEO Sam Altman for a long time and “doesn’t like profiting off of people he considers friends.” When Shah bought Chat.com last year, it was reportedly one of the most lucrative domain sales of all time. Whatever the price, it’s a drop in the bucket for the AI giant valued at $157 billion.—AE

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