CNBC's 'Fast Money' panel examined President Trump's increasing influence over the Federal Reserve and the potential impact on interest rates, inflation, and financial markets. The discussion also touched on recent bond market movements and the historical effects of rate cuts on equities.

On CNBC's 'Fast Money', traders analyzed President Trump's growing pressure on the Federal Reserve, including the potential replacement of board members and the likelihood of appointing officials who may favor lower interest rates. The panel noted that such moves could lead to a steepening yield curve and potentially higher inflation in the long term, as markets anticipate rate cuts.

The discussion also highlighted that while lower rates might ease debt servicing for governments, historical trends suggest that rate-cutting cycles often precede equity market corrections or bear cycles. Panelists cautioned that while rate cuts may seem beneficial in the short term, they could signal underlying economic issues and may not necessarily lead to sustained market gains.

Traders discuss Trump's influence on the Federal Reserve and market implications

Politics aside, I mean, listen, Cook might stay, we don't know. She might voluntarily resign and then Trump gets replaced, or a court will uphold that this is valid and she gets replaced. If she does indeed leave the board in some form and a dove comes in, does it change the way we should look at the Fed or interest rates? Well, I think that we should be looking at this either way because I think regardless of what happens, clearly Trump is putting a lot of pressure here. Powell is going to be out next year. Likely somebody is going to put in who is somebody of his choosing who is going to be ideally lowering interest rates as he wants. And I think that's something the markets are trying to figure out. This is why you see the yield curve steepening because it's widely expected the rates are going to start to come down here in the short term. And longer term, though, this is actually likely going to put more pressure on inflation. That's like the irony of all of this. That's why the longer end of the curve has been rising because this could actually stimulate the economy and create additional inflation in the long run. So even though he's putting all this pressure, it doesn't mean inflation is done. And actually longer term could potentially be an issue. So that gap between the two year yield and the yield on the 30 year, Dan, the widest in multiple years. Well, you know what's interesting about this? And again, this could just end up being, you know, a sideshow. It could be end up just being a ridiculous situation. I mean, the president was found liable in a civil case in New York state for doing what? Inflating the value of his property to get a mortgage and insurance. I mean, so like, what are we doing here? You know, we're spending a lot of time talking about this. Why doesn't any of these reporters ask that question? You know what I mean? Like, it's just kind of funny to me. We're just letting this go by and there's no due process. And we don't, we haven't been shown anything. There's been no charge. There's an allegation. But there's not even a charge. Like if there's a charge. He's charging it. He's the president. He's saying it, but he's not charging it. There's nobody, there's no legal charge. I think that was the, I think that's the bottom line. It's a clown show. Okay. And again, I mean, I don't even want, we're spending a lot of time talking about this. Does the move in the bond market change anything for Dan Nathan with regards to equity? Because it hasn't moved. I think what Courtney said is perfect. I mean, if it stokes inflation, you're going to see long yields go higher. And that's what's kind of happened. It's happening all over the world too. So there's this focus right now that inflation is not under control, that every government on the planet has massive debt piles. They want to see, you know, yields go down because they're sick of servicing this debt. We have a trillion dollars in debt to service. And there's a push and a pull, right? We get the yields lower. We spend less on our debt service, but it is stimulative. And then you have this situation where who knows what could happen. Well, what I would add there is that when we do see a rate cutting cycle begin, it tends to be negative for the equity market. So as much as we are welcoming it for the economy, perhaps, maybe six out of the last eight times this has happened, the market saw either a major correction or a bear cycle. So to me, I don't know, maybe we should be careful what we wish for. We did cut rates last year, Guy Domi. September, a lot of people looking at that in a political way. Well, it doesn't matter. The point is the 10-year bond yield and mortgage rates were the same then as they are now. And we got a cut. What are the odds? We get a cut, whether or not it has anything to do with Lisa Cook or not. We get a cut in September and the bond market says, you know what? Worried about inflation, send yields higher. Better than 50-50. Bank of England cut rates, I think, on August 7th. Don't at me if I'm off by a day. Now they have inflation at 18-month high and bond yields have been going higher. So to your point, I think the chances are very good. And Dan just mentioned it. Just go across Europe and look what's going on. Look what's going on in Japan. I think there's a very good chance that, again, if you go on this rate-cutting cycle to Katie's point, I mean, historically it's been because things are breaking down. Maybe it's a little bit different this time. But I'll say this. Be careful what you wish for because it doesn't mean the back end of the yield curve is going to move. And the market will challenge this newly constructed Fed at one of these days in some way, shape, or form. And typically they challenge it by selling off of the bond market and pushing yields higher. I think that's it. Thank you. Thank you.

President Donald Trump said he would seek the death penalty for murders in Washington, as part of a crackdown on what he calls out-of-control crime in the US capital.

Washington

Trump endorses death penalty return in Washington D.C.

As the Israeli military gives an initial assessment of deadly strikes on a Gaza hospital, hundreds of thousands of protesters urged Prime Minister Benjamin Netanyahu to accept a ceasefire with Hamas in exchange for a hostage deal.

Tel Aviv-Yafo

Middle East Conflict

Protesters urge Netanyahu to reach hostage deal

Cracker Barrel says it will go back to its old logo after facing intense backlash and seeing its company value to sink by nearly $100 million after switching to a new design last week. In a statement, Cracker Barrel thanked their guests for sharing their voices.

Cracker Barrel scrapping new logo, returning to old one after backlash

The small West Tennessee town of Mason, just 2 square miles in size, is home to about 1,000 people. But its residents are now divided by what a new immigration detention facility will mean for the area.

Mason

Small Tennessee town divided over new ICE detention facility

SpaceX launched its Super Heavy-Starship from Texas on Tuesday for the rocket's tenth test flight. The previous three launches ended in catastrophic in-flight failures.

Starbase

SpaceX Super Heavy-Starship lifts off from Texas on 10th test flight

A standoff is brewing between President Trump and economist Lisa Cook. Mr. Trump tried to fire her, claiming "there is sufficient cause" to believe that Cook made false statements on one or more mortgage agreements.

Trump clashes with Fed board member Lisa Cook, pushing to oust her

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.

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.

Breakdown