It’s been the U.S. Supreme Court that has intervened ultimately with a stay order. This move prevents former President Donald Trump’s effort to oust Federal Reserve Governor Lisa Cook. This unforeseen ruling is both a huge win for Cook and a powerful affirmation of the Federal Reserve’s independence. The case about Cook’s district will be delayed until January 2026. This latest ruling lets her hold onto her position in the central bank for now.
What you probably don’t know is that, in 2022, she became the first Black woman to serve on the Federal Reserve Board. She is considered to be a driving force in crafting U.S. monetary policy. Her tenure has been especially recognized for its emphasis on creating formula-driven economic equity and place-driven diversity. As the Supreme Court has thus far rebuffed Trump’s attempts. This decision reflects a deeply felt commitment to independence as the essential bedrock of sound economic governance through the Federal Reserve.
The ruling comes at a time of heightened scrutiny by courts and everyone else of economic indicators here in the U.S. and overseas. In Sweden, the manufacturing Purchasing Managers’ Index (PMI) increased from 55.3 in August to 55.6 in September. This increase indicates a slight growth in the manufacturing sector. Even with this upbeat news, employment increases are no longer catching on in Sweden. This has led many to worry about a sharp rise in the overall unemployment rate, as the labor force continues to grow.
For readers in the United States, economic signals are similarly mixed. Today’s ADP report was just the latest indication of a shocking reversal in the trend on private payrolls. In September, they actually dropped—by 32,000, rather than the anticipated gain of 50,000. This historic decline raises fundamental questions about where we find ourselves in today’s labor market. Can it recover as it has from past disruptions? In the meantime, Challenger’s report on layoff announcements will be released, giving us a fuller picture of employment trends.
On top of these historic announcements, the S&P 500 index is up 0.3%, recently hitting a new all-time high as investors remain buoyed by optimism. This rise reflects confidence in corporate profitability despite recent labor market challenges.
In the euro area, inflation ticked up from 2.0% y/y in August to 2.2% in September. Such an increase would be in line with recent trends and would not create big surprises for economists or policymakers to react to. The persistence of inflation rate surprises will be an important factor informing the next moves of all central banks, not least the Federal Reserve.