Tributes and remembrances poured in from around the world Monday for Pope Francis, who died this morning at the age of 88. Francis, whose previous name was Jorge Mario Bergoglio, was the 266th pontiff but the first from Latin America and the first non-European head of the Roman Catholic church in more than a thousand years. He died of a stroke that led to heart failure, the Vatican said.
In more mundane matters, markets suffered another massive selloff as President Donald Trump ramped up his attacks on Federal Reserve Chairman Jerome Powell. And a former chief Pentagon spokesman says the Defense Department is in "total chaos" under Secretary Pete Hegseth. Here's your evening update.
Trump Ratchets Up His Attacks on Fed's Powell, Spooking Investors
President Trump on Monday renewed his call for the Federal Reserve to cut interest rates and continued his attacks on Fed Chair Jerome Powell, who last week warned that Trump's tariffs have been larger than expected and are "highly likely" to cause at least a temporary rise in inflation.
In a social media post Monday morning, Trump argued that inflation has been tame and pressed for the central bank to lower rates to prevent a possible economic slowdown.
"'Preemptive Cuts' in Interest Rates are being called for by many," Trump wrote, adding that "there is virtually No Inflation." He then lobbed personal attacks against Powell. "With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW," Trump wrote. "Europe has already 'lowered' seven times. Powell has always been 'To Late,' [sic] except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?"
Trump appointed Powell during his first term as president, but he has repeatedly attacked the Fed chief and said recently that his "termination cannot come fast enough." Powell's term as Fed chair expires in May 2026, but Trump and his team are reportedly investigating whether he can fire Powell before then.
The Fed was created as an independent entity, able to set interest rates removed from politics, at least in theory. Powell has insisted that the president cannot fire him as a matter of law and has said he will not resign, but Trump has already pushed the legal bounds by firing officials at other independent agencies, triggering a case now before the Supreme Court. The administration is challenging precedents barring the president from firing certain federal employees for purely political reasons. Powell told reporters last week he does not think that case will apply to the Fed.
**Doubts about the US and the dollar: **Investors already worry that the president's trade war might lead to a recession, and they have begun to raise questions about the U.S. status as a safe haven. Trump's latest attacks on Powell spooked investors again, fueling another market plunge. The S&P 500 index fell 2.36% on the day and the dollar hit its lowest level since 2022, with some market analysts warning that any action by Trump to remove Powell would rattle markets further and add to the economic and fiscal hazards from his policies.
"Any reduction in the independence of the Fed would add upside risks to an inflation outlook that is already subject to upward pressures from tariffs and somewhat elevated inflation expectations," J.P. Morgan economist Michael Feroli wrote in a note to clients. "Moreover, market participants would likely demand greater compensation for inflation and inflation risks, thereby increasing longer-term interest rates, weighing on the outlook for economic activity and worsening the fiscal position."
Even just raising the idea of firing Powell comes at a cost. "Trump's musings on the potential for firing Fed Chair Powell, even if such thoughts don't come to fruition, do in the minds of the international community constitute a substantial threat to the independence of the U.S. central bank and by extension the status of the dollar as a safe haven currency," Monex foreign-exchange trader Helen Given told Bloomberg. "Should the U.S. fall into a recession with a central bank that either does not or cannot act independently, there's a chance such a downturn could be exacerbated, giving markets even more reason for concern."
White House Readies a Package of Rescissions for Congress
Congress is out until next week, but when lawmakers return they'll likely be considering a package of funding cuts requested by the Trump administration. Punchbowl News reports that House Republican leaders are tentatively planning to vote on a rescissions package the week of May 5.
The White House reportedly plans to send the package to Capitol Hill this week. It aims to erase billions of dollars in funding previously approved by Congress, including $9.3 billion from the State Department, PBS and NPR.
"The vast majority of these cuts will be on the foreign aid side, making up roughly $8 billion," Punchbowl's Jake Sherman, John Bresnahan and Andrew Desiderio report. They add that these cuts are "just a small part of what Trump and White House officials are planning on slashing in FY 2026."
Number of the Day: 60,000
The federal Emergency Housing Vouchers program is quickly running out of money, Jesse Bedayn of the Associated Press reports. The program covers rent for about 60,000 families and individuals who would otherwise face homelessness or who are fleeing domestic violence or human trafficking. It launched with $5 billion in funding under President Joe Biden as part of the 2021 American Rescue Plan Act.
"Funding is expected to be used up by the end of next year, according to a letter from the U.S. Department of Housing and Urban Development and obtained by The Associated Press," Bedayn writes. The demise of the program "would be among the largest one-time losses of rental assistance in the U.S., analysts say, and the ensuing evictions could churn these people - after several years of rebuilding their lives - back onto the street or back into abusive relationships."
Congress could still renew the program, and Democratic Rep. Maxine Waters of California is reportedly seeking another $8 billion in funding. "But it's a relatively expensive prospect at a time when Republicans, who control Congress, are dead set on cutting federal spending to afford tax cuts," Bedayn writes, leaving advocates for the program pessimistic about its future.
Fiscal News Roundup
- Trump Renews Call for Rate Cut, Slams Fed Chair – Wall Street Journal
- Wall Street and the Dollar Tumble as Investors Retreat Further From the United States – Associated Press
- Trump's Push Against Powell Adds to Doubts of US's Haven Status – Bloomberg
- GOP Lawmakers Running Out of Options to Pay for Trump's Costly Agenda – The Hill
- Hegseth Said to Have Shared Attack Details in Second Signal Chat – New York Times
- 'An Amateur Person': GOP Rep. Bacon Says Hegseth Should Go – Politico
- White House Voices Support for Hegseth as a New Signal Chat Revelation Stirs Fresh Pentagon Turmoil – Associated Press
- Harvard Sues Federal Government After Trump Administration Slashed Billions in Funding – NBC News
- Supreme Court Appears Likely to Uphold Obamacare's Preventive Care Coverage Mandate – Associated Press
- Interior Secretary Gives DOGE Aide Sweeping Powers to Remake Department – Washington Post
- NIH Moving to Ban All Future Grants to Universities With DEI Programs or Israel Boycotts, Document Suggests – STAT
- Health Care Industry, Worried Millions Could Lose ACA Insurance, Pushes for Trump to Delay Changes – STAT
Views and Analysis
- Trump Keeps Finding New Ways to Terrify Wall Street – Allison Morrow, CNN
- The Four Reasons Why the Fed Will Be Patient on Rates – Bill Dudley, Bloomberg
- Former Top Pentagon Spokesperson Details 'Month From Hell' Inside the Agency – John Ullyot, Politico
- Republicans Are Targeting a Pillar of Obamacare. Millions of Their Own Voters May Pay a Price – Ronald Brownstein, CNN
- Will the Courts Save Trump From His Worst Excesses? – Ed Kilgore, New York
- E.T., Phone the White House – Casey Dreier, New York Times
- Why Trump's 100-Day Blitz May Lead to a Historic Bust – Doug Sosnik, New York Times
- 'A Prerequisite for Democrats to Come Back to Power' – Dasha Burns and Doug Sosnik, Politico
- The 7 Most Shameless Attention-Seekers in Congress – Politico Magazine