Libby Cantrill, PIMCO head of public policy, joins 'The Exchange' to discuss the Fed's next moves, Trump's move to fire a Fed Governor and what it all means for the economy.

Washington

Analysts from PIMCO emphasized the critical role of the US Senate in confirming nominees to the Federal Reserve, noting that even if a president nominates a candidate, Senate approval is required. The process involves not only a majority vote in the full Senate but also passage through the closely divided Senate Banking Committee, where a single dissenting vote could block a nominee.

The discussion also highlighted ongoing political pressures on the Federal Reserve, including investigations initiated by administration loyalists and concerns about maintaining the institution's independence. The analysts pointed out that, despite the perception that Senate confirmation is routine, there have been several instances where nominees were withdrawn due to lack of support, underscoring the importance of legislative checks and balances.

The senate is extremely important in voting in next Fed, says PIMCO

I mean, if you are a voting member of the Fed and you have to decide about interest rates, as you always do, what incredible pressure this must bring to sort of, if you decide we need to cut rates, to prove the point, right? Show your work that this was done because of data rather than done because of pressure. Yeah, well, nice to be with you, Courtney. I think Chairman Powell has absolutely opened the door to a rate cut in mid-September. So in some ways, the timing of this is beneficial that it comes after Jackson Hole when he gave a, you know, a little bit more of a dovish speech. Again, that opens the door to that rate cut. But just by and large, I mean, this is a very uncomfortable position for the Federal Reserve to be in. The Federal Reserve obviously prides itself on its independence, on being politically neutral and completely devoid of these politics. So for sure, this comes at a time also when, of course, the Fed is also trying to interpret different types of data, potentially upward pressure on inflation, but then also, you know, potentially headwinds to growth from tariffs and from immigration. So this just compounds what already is a difficult sort of position for the Federal Reserve to be in. You know, even obviously there's a lot of discussion about Trump appointees and people that he wants to sort of cooperate with him and his desires. And FHFA Director Bill Pulte was indeed nominated by President Trump. To Steve's earlier point, he's reached out to Mr. Pulte trying to ask questions about how was this investigation started? Is this a normal course of affairs to investigate Fed governors? I mean, any take on that from the folks that you're talking to about the pressure that sort of started from Mr. Pulte himself? Yeah, Courtney, that's a good way of looking at it. And oh, I'm sorry. Go ahead. No, go ahead. Amen. And then we'll grab Olivia as well. Yeah. So I was just going to say that, I mean, Pulte is a Trump loyalist, right? He is very, very supportive of the president and he supported the president's efforts to investigate the Fed and its building and whether or not the Fed is wasting money or being irresponsible by renovating its buildings and that trip that the president famously took to the Fed. So Pulte is somebody who is going to be doing what President Trump wants to have done here. And I think that's a good question, which is what was the predicate for this investigation? And does that give Abby Lowell, who is a very sharp attorney, by the way, and is involved in just about every Washington scandal of the past generation, does that give Abby Lowell the ammunition to argue back and say, wait, if you're only looking at Cook, then that's a political fishing expedition and not real law enforcement. And therefore the entire predicate of this investigation should be thrown out. That's a fascinating legal question going forward. Absolutely. Let me go ahead. No, sorry. I was just going to say, I mean, I think you bring up a good point also about the fact that this is, there is a nomination process and as it relates to the Fed, so not FHFA, but as it relates to the Fed, just keep in mind, I think this has been a little bit lost in the dialogue today, that anybody who is replaced, so even if the courts do side with the president, again, kind of open question about kind of the next steps on that, but even if they do, and President Trump is able to fire Governor Cook and then is able to nominate somebody to replace her, just remember, this is quite important, that the Senate still needs to confirm that person. And not only does the broader Senate, which requires 50 of the 53 Republican votes to support that person, that nominee would also have to first go through the Senate Banking Committee. And this might seem like a lot of kind of wonky DC talk, but it's really important because the Senate Banking Committee is effectively tied. So one Republican no vote, assuming that Democrats vote against whomever is nominated, would sink that candidate. And of course, there's quite a lot of precedent during Trump 1.0, also during the Biden administration, where the White House ultimately actually had to retract and pull their nominees because they couldn't get through the Senate Banking. So that is something, I guess, this advice and consent role that the US Senate plays, even though it may seem perfunctory, and oftentimes it is, Democrats or Republicans, usually senators like to vote in favor of whomever the president of their party wants in their cabinet and for their agencies. It's not always perfunctory. And particularly for the Fed, there have been instances, again, where the Senate Banking Committee has rejected whomever has been nominated. So that is a key step. And I think from our perspective as investors, really important in terms of this checks and balances, in terms of kind of the independence of the Fed going forward.

Protesters demanding an end to the Gaza war and the return of hostages to their homes took to the streets in Israel on Tuesday ahead of a security cabinet meeting scheduled for the evening.

Tel Aviv-Yafo

Middle East Conflict

Israeli protesters demand hostage deal as cabinet set to meet

Australia accused Iran on Tuesday (August 26) of executing two antisemitic arson attacks in the cities of Sydney and Melbourne and gave Tehran's ambassador seven days to leave the country, its first such expulsion since World War Two.

Council of the City of Sydney

Australia expels Iranian envoy over antisemitic attacks

President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, the only Black woman to serve on the board. Critics call it an attack on the Fed's independence, while Cook says no legal cause exists for her firing.

Trump says he fired Lisa Cook from Federal Reserve board

U.S. President Donald Trump signed an executive order creating new National Guard units, including a rapid-response force to handle what the administration calls civil disturbances.

White House authorizes creation of rapid-response National Guard units

Billionaire entrepreneur Elon Musk’s artificial intelligence startup xAI sued Apple and ChatGPT maker OpenAI in U.S. federal court in Texas, accusing them of illegally conspiring to thwart competition for artificial intelligence.

Texas

Rise of AI

Elon Musk's xAI sues Apple, OpenAI over competition claims

Strikes on the Nasser hospital in Gaza that left at least 20 people dead, including rescuers, journalists and health-care workers are being met with global outrage. The Israeli military is investigating what Israel Prime Minister Benjamin Netnayahu called a ‘tragic mishap.’

Israeli PM calls deadly strikes on Gaza hospital a ‘tragic mishap’

Kilmar Abrego Garcia is back in ICE custody and is facing deportation to Uganda, the Department of Homeland Security says, after he was released from criminal custody last week.

Baltimore

Abrego Garcia in ICE custody, court blocks immediate deportation

Ukrainian President Volodymyr Zelenskyy said he will meet with the U.S. and other countries this week to discuss a potential meeting with Russian President Vladimir Putin aimed at reaching a ceasefire.

Kyiv

Ukraine Invasion

Zelenskiy say he will meet with U.S., others on potential Putin talks

U.S. President Donald Trump says Chicago could be the next city to see National Guard deployment, sparking strong opposition from Mayor Brandon Johnson and Governor JB Pritzker, who argue crime is already falling and federal intervention is unnecessary.

Chicago

Trump threatens to send National Guard troops to Chicago

Four journalists working with Reuters, Al Jazeera and others were killed in explosions at a Gaza hospital. Gaza officials blame Israeli drone strikes, though CBS News has not independently verified the claims.

Jerusalem

Four journalists reported dead after Gaza hospital blasts

U.S. National Guard troops patrolling the streets of Washington D.C. as part of what President Donald Trump said was his crackdown on crime began carrying weapons on Sunday night, two officials said.

National Guard patrolling Washington DC begin carrying weapons

In a visit to Kyiv, Prime Minister Mark Carney affirmed Canada’s support for Ukraine and committed to sending soldiers if a ceasefire with Russia is reached.

Carney in Kyiv pledges support, possibly troops for Ukraine

The Pickett Fire is growing in California's Napa County, prompting new evacuations as it threatens homes and wineries. The flames, fueled by scorching temperatures and dry conditions, are being battled by hundreds of first responders.

Napa Valley

Evacuations ordered in California as heatwave fuels wildfire

Democrats are pushing back against President Trump's plan to send the National Guard to more cities, including Chicago, New York and Baltimore, as troops continue to patrol Washington, D.C. State and local leaders say they have crime under control.

Democrats slam Trump's plans to send National Guard to more cities

Beef prices are at record highs with the average price of a pound of ground beef topping $6. Lisa Rozner reports on what's causing prices to soar.

Why U.S beef prices are soaring

A defiant Ukraine marked its independence from the former Soviet Union Sunday amid more fighting with Russia. Chris Livesay reports on how world leaders joined in, voicing their support.

Ukraine marks its Independence Day as war with Russia continues

The boats are produced by unknown Turkish companies and are then sent disassembled in multiple shipments to avoid suspicion in what authorities say is for the sole purpose of trafficking migrants across the English Channel.

Sofia

Inflatable boats used for migrant trafficking seized

Less than 24 hours after he was released from jail, Kilmar Ábrego García was told that U.S. immigration officials plan to deport him to Uganda. The Salvadoran national, who has been living illegally in the U.S. since about 2011, was wrongly deported to his home country earlier this year.

Maryland

Kilmar Abrego Garcia told he may be sent to Uganda

Erik and Lyle Menendez remain behind bars, their hopes for release dashed by two separate parole boards more than three decades after murdering their parents. Elise Preston reports.

Los Angeles

Erik and Lyle Menendez denied parole

Tourism in Las Vegas is slumping this summer, costing the city billions. That could signal trouble ahead for the U.S. economy. Andres Gutierrez has new details.

Las Vegas

Las Vegas tourism slumps this summer, signaling trouble for U.S. economy

Texas Republicans took a victory lap after an early morning vote Saturday that sought to give their party an edge during the 2026 midterms. Democrats in Texas plan to challenge the legality of the new congressional map, saying it dilutes the power of minorities.

Austin

Texas Republicans take victory lap after redistricting vote

Israel has called the United Nations' declaration of famine in parts of Gaza an "outright lie," but multiple U.N. bodies, more than 100 humanitarian groups, and several of Israel's own allies have warned for months that the war is causing starvation among civilians.

Israel denies U.N.'s declaration of famine in parts of Gaza

U.S. President Donald Trump says he will impose sanctions on Russia if it fails to reach a peace deal in Ukraine within two weeks. But Ukrainian President Volodymyr Zelenskyy says Russia’s ongoing attacks on his country show that President Vladimir Putin is not interested in peace.

Putin’s not interested in peace talks, Zelenskyy says

Lyle Menendez was denied parole late Friday night following a day-long hearing in California, just one day after his brother Erik's parole appeal was also rejected. The brothers have been in prison since 1996 for killing their parents in what they say was an act of self-defense.

Both Menendez brothers denied parole

At least five people are dead and dozens are injured after a tour bus traveling from Niagara Falls flipped over on the New York State Thruway near Pembroke, New York.

Pembroke

Western New York bus crash kills at least five people

Federal agents searched former Trump adviser-turned-critic John Bolton's home on Friday morning. President Donald Trump denied knowing about the investigation, which is related to his handling of classified documents.

Bethesda

FBI raids former Trump adviser John Bolton's home, office

The FBI searched former national security adviser John Bolton's house in Bethesda, Maryland, early Friday morning, the bureau confirmed to CBS News.

FBI raids former Trump adviser John Bolton's home, D.C. office

Kilmar Abrego Garcia, the Maryland construction worker deported to El Salvador and then returned to the U.S. on smuggling charges, has been released from prison in Tennessee, his attorneys say.

Breakdown