The past week has been a whirlwind of economic news, with President Donald Trump’s influence on the Federal Reserve and the U.S. economy taking center stage. From former Federal Reserve Chairs’ warning about potential economic damage to record-setting inflows into U.S. assets, the week was filled with significant developments.
Let’s dive into the top stories of the week.
Former Fed Chairs Warn Of Economic Damage
Former Federal Reserve Chairs Ben Bernanke and Janet Yellen have expressed concern over President Trump’s pressure on current Fed chief Jerome Powell. They warned that this could lead to higher inflation and economic damage. They emphasized the importance of the central bank’s independence and urged Trump to nominate a successor for Powell who would uphold this independence.
Record Inflows Into US Assets
Despite fears that President Trump’s aggressive tariff policy would deter foreign investors, the opposite has happened. Foreign investors have been buying American securities at a record pace, contributing to one of the strongest rallies in recent history. The total net capital inflows into the U.S. reached an unprecedented $1.76 trillion over the 12 months ending in May 2025
See Also: Is A Stock Market Crash Imminent? Bubble Warnings Grow Louder
Japan’s Bond Market Reacts To US Trade Deal
Japan’s 10-year bond yields surged to 1.59% on Wednesday, a level not seen since 2008. This surge was a reaction to a new U.S. trade deal and political turmoil surrounding Prime Minister Shigeru Ishiba.
Bill Ackman Supports Capital Reform
Hedge-fund billionaire Bill Ackman has voiced his support for a proposal to restructure the capital requirements of government-sponsored enterprises (GSEs), Federal National Mortgage Association, Fannie Mae, and Federal Home Loan Mortgage Corporation, Freddie Mac. Treasury Secretary Scott Bessent called for sweeping changes to the bank capital framework, arguing that current rules are outdated and stifling growth.
Wall Street Predicts Moderate Inflation Hike
As the deadline for President Trump’s tariffs approaches, Wall Street analysts are predicting a more moderate increase in inflation. This is a shift from earlier fears of a significant surge. Analysts now anticipate a potential delay or a single inflation hike instead of a continuous increase.
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This story was generated using Benzinga Neuro and edited by Ananya Gairola
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