White House Adviser Hassett Plays Down Probe Of Fed Chair Powell

The Trump administration is pursuing a dual-track strategy in its relationship with Venezuela, marked by high-level diplomatic meetings in both Caracas and Washington following the capture of President Nicolas Maduro earlier this year.

In a significant move, CIA Director John Ratcliffe met with Venezuela's acting president, Delcy Rodriguez, in Caracas. Simultaneously, Venezuelan opposition leader Maria Corina Machado held a meeting with President Donald Trump at the White House.

The Washington Channel: Trump Hosts the Opposition

Maria Corina Machado, a prominent liberal opposition figure, met with President Trump on Thursday. The meeting was highlighted by a significant gesture: Machado presented Trump with the Nobel Peace Prize medal she had received the previous year.

Venezuelan opposition leader Maria Corina Machado in Washington D.C. ahead of a high-profile meeting with President Donald Trump.

After what she described as an "excellent" meeting, Trump publicly thanked Machado for the medal on social media, calling it "a wonderful gesture of mutual respect." Machado is scheduled to speak with reporters on Friday at the Heritage Foundation, a conservative think tank with strong connections to the Trump administration.

The Caracas Channel: CIA Director Meets Interim Government

John Ratcliffe’s visit to Caracas makes him the most senior U.S. official known to have met with acting President Delcy Rodriguez since the U.S. attack on January 3 that resulted in the capture of Nicolas Maduro and his wife.

According to a U.S. official, the CIA chief met with Rodriguez at Trump's direction. The key objectives of the meeting were:

• To signal that the United States is seeking an improved working relationship.

• To discuss intelligence cooperation and economic stability.

• To demand assurances that Venezuela will not serve as a "safe haven for America's adversaries, especially narco-traffickers."

Political Tensions Remain High

The diplomatic overtures are set against a backdrop of deep political friction. During her first State of the Union address on Thursday, acting President Rodriguez appeared to take a swipe at Machado's visit to Washington.

"If I should visit Washington," Rodriguez told the Venezuelan people, "I will do so with my head held high, walking, not on my knees."

President Donald Trump's recent comments on potential candidates for the Federal Reserve chairmanship have sent immediate shockwaves through financial markets, reshaping the race to lead the central bank.

In a move that caught traders by surprise, Trump appeared to rule out Kevin Hassett, a top contender, for the position. The statement triggered a sharp rally in the U.S. dollar while sending gold and silver prices tumbling.

Trump Publicly Sidelines Hassett for Fed Chair

Speaking to reporters, President Trump indicated he prefers Hassett to remain in his current post at the White House National Economic Council (NEC).

"Hassett performs very well on television, and I want him to stay in his current position. We'll see," Trump said. He added a revealing justification: "Fed officials don't talk much, Hassett talks a lot."

This public dismissal of Hassett's candidacy for the Fed's top job had an instant impact on market sentiment and leadership odds.

Markets React: Dollar Soars, Gold Tumbles

The financial market response was swift and decisive. Following the president's remarks, the U.S. Dollar Index (DXY) surged by over 20 points.

Simultaneously, prices for precious metals dropped. Both spot gold and silver experienced sharp short-term declines as investors recalibrated their expectations for the future of U.S. monetary policy and leadership at the Federal Reserve.

On forecasting platforms, the probabilities for the next Fed chair shifted dramatically. Kevin Warsh saw his chances increase, while Hassett's plummeted. Other potential candidates, including Christopher Waller, Rick Rieder, and Michelle Bowman, continue to be listed with lower probabilities.

The Powell Factor: A Lingering Presence?

The shakeup has also intensified uncertainty around the future of the current Fed Chair, Jerome Powell. While his term as chairman ends in May, his term as a member of the Fed's Board of Governors runs until January 2028.

Recent events have fueled speculation that Powell may choose to remain on the board after stepping down as chair. A grand jury subpoena from the Justice Department, which Powell linked to his congressional testimony on renovations at the Fed building, has been interpreted by some as a political move.

In a statement on January 11, Powell characterized the subpoena within a wider context of "government pressure and threats," leading many to believe he might stay on to safeguard the central bank's institutional integrity.

Analysts Warn of a "Shadow Chairman"

If Powell remains on the board, it could significantly complicate Trump's efforts to install a Fed leadership more inclined to support interest rate cuts.

Former Cleveland Fed President Loretta Mester warned this scenario could create the perception of a "dual authority" within the Fed, potentially confusing markets.

Antulio Bomfim, Global Macro Director at Northern Trust Asset Management, noted that while Powell likely does not want a "shadow chairman" role, his continued presence on the board would inevitably serve as a strong balancing force.

Near-Term Monetary Policy Remains Steady, For Now

Despite the leadership drama, no radical shifts in monetary policy are expected in the immediate future. The Fed recently cut its policy rate by 25 basis points—its third consecutive reduction—and has signaled a wait-and-see approach pending clearer inflation and employment data.

However, the ongoing uncertainty over the Fed's next leader and the potential for Powell to remain on the board could delay President Trump's plans to appoint new members and secure a majority more aligned with his economic agenda.

A view shows the U.S. Capitol dome from the Cannon House Office Building on Capitol Hill in Washington, U.S., July 14, 2022. REUTERS/Elizabeth Frantz

The U.S. Senate voted on Thursday to approve billions of dollars in funding for federal science agencies, rejecting deep cuts proposed by President Donald Trump in space and other areas.

The Senate bill approved significant science funding for NASA, the National Science Foundation and the National Oceanic and Atmospheric Administration above what the White House had sought. NSF will receive $8.75 billion for research efforts including in quantum information science, artificial intelligence and other areas.

The White House had sought to cut the budget by 57%.

The NSF funding is expected to support nearly 10,000 new competitive awards and more than 250,000 scientists, technicians, teachers, and students, Democratic Senator Chris Van Hollen said.

The Senate rejected nearly all of Trump's cuts to NASA. The president had sought a $6 billion cut from the $24.9 billion budget, but the Senate voted for a much smaller cut, appropriating $24.44 billion.

The bill rejected a proposal to cut NASA Science by 47% and terminate 55 operating and planned missions. The legislation also provides $1.6 billion for Astrophysics, including $300 million to complete a telescope to investigate dark energy and $500 million for the Dragonfly mission to explore the largest moon of Saturn.

This week, White House science adviser Michael Kratsios addressed criticism of proposed science budget cuts. "Even in our attempt to try to rightsize the budget, the one area where we have kept a consistent amount of proposed budget funding has been in AI," he said.

Senator Maria Cantwell, the top Democrat on the Commerce Committee that oversees many science-related agencies, said in a Reuters interview the bipartisan vote was a vote for science. "Congress won by saying, 'No, science does matter, and we're going to invest in it.'"

The bill supports big projects like creating a "permanent outpost on the Moon, developing space technology that monitors extreme weather and protects our citizens from natural disasters, and inventing the microelectronics of the future," Cantwell said.Senator Rand Paul, a Republican, said the legislation "wastes $8.75 billion on the National Science Foundation—a massive taxpayer-funded expansion with weak oversight, vague priorities, and no clear return for the public."

Source: Reuters

The Trump administration is developing a plan that would allow investors to use their 401(k) retirement funds to make a down payment on a house. White House economic adviser Kevin Hassett confirmed the proposal on Friday, stating that more details would be released next week.

In an interview with Fox Business Network, Hassett said the administration will "allow people to take money out of their 401ks and use that for down payment." He added that President Donald Trump is expected to present the final plan during the economic conference in Davos, Switzerland.

Hassett, who will be traveling with the president, noted that officials are still determining the "mechanics of it" to ensure the policy doesn't negatively impact individuals' retirement savings. The goal is to find a "simple" way to facilitate the transfer of funds.

Addressing the Housing Affordability Crisis

This new initiative comes as the administration confronts economic pressures ahead of the November midterm elections. A central campaign promise was to find solutions for the high prices facing American consumers.

Housing affordability has become a major challenge across the United States. A combination of high mortgage rates and elevated home prices has pushed many potential buyers out of the market, leading to a slowdown in housing activity. Investors and would-be homeowners have been watching for policy changes or market shifts that could revive mortgage applications.

Recent consumer inflation data from the Bureau of Labor Statistics confirmed that housing inflation remains strong, underscoring the persistence of the problem.

A Broader Push to Lower Housing Costs

The 401(k) proposal is the latest in a series of ideas from the Trump administration aimed at tackling the housing market. Other recent proposals include:

• Banning institutional investors from purchasing single-family homes.

• Instructing the Federal Housing Finance Agency to buy $200 billion in bonds from mortgage giants Fannie Mae and Freddie Mac to help lower mortgage rates.

• Repeatedly calling on the U.S. Federal Reserve to lower its benchmark interest rates.

Will It Work? Analysts Question the Approach

While these measures are designed to stimulate demand, some economists and market analysts argue they miss the core issue: a critical lack of housing supply.

According to this view, local zoning laws and regulations are the primary constraints on building new homes. They caution that policies designed to lower rates or ease down payments could increase demand for a limited number of houses, which would likely just push prices even higher without a corresponding increase in supply.

U.S. banking giants earn more from interest payments

Credit card loan balances grow

Most big banks see charge-offs trend lower

Global investment banks ranked by fees in 2025

Market swings boost Wall Street trading desks

12-month stock performance of major U.S. banks

Source: reuters

The United States and Taiwan have finalized a major trade agreement centered on technology and energy investment in exchange for lower US tariffs. The deal underscores a strategic push by Washington to deepen its access to Taiwan's world-leading semiconductor industry.

According to a statement from the US Commerce Department, Taiwanese technology firms will invest a minimum of $250 billion in the United States. In return, Washington will lower its general tariff on Taiwanese imports from 20 percent to 15 percent.

This agreement comes as the US seeks to secure its supply chain for advanced digital technology. Taiwan holds a dominant position in the global production of these critical chips, making it an indispensable part of the world economy, even as it faces sovereignty claims from China.

Key Terms of the Agreement

The US Commerce Department described the deal as "historic," projecting it will "strengthen US economic resilience, create high-paying jobs, and bolster national security."

Under the terms, Taiwan's investment will focus on building and expanding advanced production and innovation capacity in three key sectors:

• Semiconductors

• Energy

• Artificial Intelligence

In addition to the direct $250 billion investment, Taiwan has also committed to providing at least an equal amount in credit guarantees to support further investment by its companies in the US semiconductor supply chain.

The tariff reduction follows a period of higher trade barriers. President Donald Trump had previously announced a 32 percent tariff on Taiwanese goods as part of his "Liberation Day" tariffs, a rate that was later reduced to 20 percent.

Taiwan's "Silicon Shield" Strategy

Despite the massive investment in the US, Taiwanese officials emphasized that the island will maintain its global leadership in semiconductor manufacturing. The industry is often referred to as a "silicon shield," believed to deter a potential invasion or blockade from China and incentivize US defense support.

"Based on current planning, Taiwan will still remain the world's most important producer of AI semiconductors, not only for Taiwanese companies, but globally," Economic Affairs Minister Kung Ming-hsin told reporters on Friday.

He projected that by 2030, the production capacity for advanced AI chips would be split approximately 85-15 between Taiwan and the United States. By 2036, that ratio is expected to shift to 80-20.

Beijing Expresses Stern Opposition

Reacting to the accord, Beijing voiced its resolute disapproval. A spokesperson for China's Ministry of Foreign Affairs stated that the country "consistently and resolutely opposes any agreement … signed between countries with which it has diplomatic relations and the Taiwan region of China."

Beijing urged Washington to abide by its one-China principle, which views Taiwan as part of its sovereign territory.