Politics
Fed lowers interest rates again but dials back plans for more cuts in the future
WASHINGTON — The Federal Reserve on Wednesday made another cut in interest rates, but dialed back expectations for lowering rates in the near future.
The rate reduction, the third in a row, had been widely expected, but where policymakers go from here is anything but certain.
Plans for several more rate cuts in 2025 have become muddied as progress the Fed made on curbing inflation has stalled and uncertainties abound about what impact the incoming Trump administration will have on the economy.
The Fed’s new quarter-point rate reduction, coming out of its last policy-setting meeting of the year, will give consumers a bit more relief on interest payments for credit cards, home equity lines and some other personal loans.
The cumulative effects of the three rate cuts since September, totaling a full percentage point, are more meaningful and could help households that are stretched financially. More Californians have fallen behind in making debt payments this year, with delinquency rates on credit cards and auto loans rising especially for millennials (ages 28-43), according to the California Policy Lab at UC Berkeley.
The Fed’s recent rate cuts, however, haven’t done a whole lot for potential homebuyers and sellers. The 30-year fixed mortgage rate, while ticking down a little this month, most recently stood at 6.6% last Thursday — which is actually up from about 6% in mid-September, according to Freddie Mac. And analysts don’t see mortgage rates coming down significantly in the near term.
While Wednesday’s rate cut was expected — futures markets gave it a 95% probability before the announcement — the view ahead is clouded by uncertainty over what President-elect Trump might do, on trade as well as fiscal policy.
Trump has talked about cuts in taxes and regulations, which would likely stimulate economic activity. But he also has proposed tariffs on all imports and even higher levies on Chinese goods, which most analysts see as inflationary and a hit to economic growth.
Whether Trump will go through with his tariff threats, and if so, when and by how much, remain highly uncertain.
Beyond questions about the new administration’s intentions, Fed policymakers already had reason to slow their rate-cut plans. The American economy and jobs, while slowing a bit, have kept growing at a solid pace.
At the same time, consumer price inflation, which reached near double digits in the summer of 2022, has recently stopped trending down toward the Fed’s 2% target. Inflation edged up a notch in November, with prices rising 2.7% from a year earlier as consumers paid more for used cars and airline fares, but also staple items like medical care and foods purchased for home. Rising grocery prices, in particular, have gnawed at consumer sentiments, and were seen as a key factor in Trump’s victory in November.
“I think for lower- and moderate-income households, the budgetary battle continues, month in and month out,” said Greg McBride, chief financial analyst at Bankrate.com. “Inflation on everyday necessities continues to be an issue.”
In September, the Fed began its latest rate-cutting scheme by making a big half-point reduction, followed by two quarter-point moves. And based on the trajectory of inflation then, it had forecast four more smaller cuts next year.
But on Wednesday, the Fed’s updated projections showed officials expecting just two quarter-point cuts in 2025 and another two the following year. And analysts say policymakers are likely to pause at their next rate-setting meeting in January.
In their latest projections, most Fed officials said the U.S. economy would grow 2.1% next year, compared with 2.5% this year, which is up significantly from its previous September forecast. They see their preferred measure of core inflation as ending the year at 2.8% and at 2.5% in 2025. The nation’s unemployment rate, which was 4.2% in November, is expected to rise to 4.3% around this time next year.
Wednesday’s announcement takes the Fed benchmark interest rate down to a range of 4.25% to 4.5%. That’s a full percentage point lower than it was in September, but is still considered above the so-called neutral rate that’s neither stimulative nor restrictive for the economy.
Politics
Navy Secretary John Phelan Is Leaving the Pentagon and the Trump Administration
Navy Secretary John Phelan was fired on Wednesday after months of infighting with senior Pentagon leaders and disagreements over how to revive the Navy’s struggling shipbuilding program.
Mr. Phelan is leaving the Pentagon and the Trump administration effective immediately, wrote Sean Parnell, the Pentagon’s chief spokesman, in a terse statement.
In his role leading the Navy, Mr. Phelan had championed the “Golden Fleet,” a major investment in new ships including a “Trump-class” battleship. But Mr. Phelan’s leadership was marred by feuds with senior leaders in the Pentagon, including Defense Secretary Pete Hegseth and Deputy Defense Secretary Stephen Feinberg, Pentagon and congressional officials said.
Mr. Phelan is the first service secretary to leave the administration, though he is the second one to clash with the defense secretary. Mr. Hegseth also has butted heads with Army Secretary Daniel P. Driscoll over promotions and a host of other issues. Mr. Hegseth fired the Army’s chief of staff, Gen. Randy George, earlier this month.
The Navy secretary has no role overseeing deployed forces, and Mr. Phelan’s firing is not likely to have significant implications for the conduct of the Iran war or U.S. Navy operations to blockade Iranian ports or open the Strait of Hormuz. As the Navy’s top civilian leader, his main responsibility is to oversee the building of the future naval and Marine Corps force.
But the tumult could make it harder for the Navy to replenish its stock of Tomahawk missiles and high-end air defense systems, which have been in heavy use in Iran.
Tensions had been simmering for months between Mr. Phelan and his two bosses — Mr. Hegseth and Mr. Feinberg — over management style, personnel issues and other matters.
Mr. Feinberg, in particular, had grown increasingly dissatisfied with Mr. Phelan’s handling of the Navy’s major new shipbuilding initiative, and had been siphoning off responsibility for the project from him, said the congressional official, who spoke on the condition of anonymity to discuss personnel matters.
Mr. Phelan, a White House appointee, also had a contentious relationship with his deputy, Under Secretary Hung Cao, who is more aligned with Mr. Hegseth, especially on some of the social and cultural battles that have defined the defense secretary’s tenure, the officials said.
A senior administration official said that Mr. Hegseth informed Mr. Phelan before the Pentagon’s official announcement that he and President Trump had decided that the Navy needed new leadership.
A spokeswoman for Mr. Phelan referred all questions on Wednesday evening to the Defense Department.
Last fall, Mr. Hegseth fired Mr. Phelan’s chief of staff, Jon Harrison, who had clashed with senior officials throughout the Pentagon. The unusual move highlighted the broader tensions between Mr. Hegseth and Mr. Phelan.
Still, the timing of Mr. Phelan’s firing caught some Pentagon and congressional officials off guard. On Wednesday, Mr. Phelan was making the rounds on Capitol Hill, talking to senators about his upcoming annual hearing with lawmakers to discuss the Navy’s budget request and other priorities.
“Secretary Phelan’s abrupt dismissal is troubling,” Senator Jack Reed of Rhode Island, the top Democrat on the Armed Services Committee, said in a statement Wednesday night. “In the midst of President Trump’s war of choice in Iran, at a moment when our naval forces are stretched thin across multiple theaters, this kind of disruption at the top sends the wrong signal to our sailors and Marines, to our allies, and to our adversaries.”
Mr. Phelan also had a close relationship with Mr. Trump. In December, Mr. Phelan appeared alongside Mr. Trump at his Mar-a-Lago resort to announce the “Golden Fleet” and the new class of battleships bearing Mr. Trump’s name.
“John Phelan is one of the most successful businessmen in the country — in our country,” Mr. Trump said. “He’s been a tremendous success.”
Before joining the Trump administration, Mr. Phelan ran a private investment fund based in Florida.
“He’s taken probably the largest salary cut in history, but he wanted to do it,” Mr. Trump said at the December press conference. “He wants to rebuild our Navy. And you needed that kind of a brain to do it properly.”
But Mr. Trump’s effusive praise masked deeper tensions with Mr. Phelan’s Pentagon bosses.
Bryan Clark, a naval analyst at the Hudson Institute, said that Mr. Phelan was “driving the Navy in a different direction” than what Mr. Hegseth and Mr. Feinberg wanted.
“He was championing initiatives like the battleship and frigate that don’t align with where the D.O.W. leadership is taking the military, which is toward submarines, stealth aircraft, unmanned systems and software-driven capabilities like electronic warfare and cyber,” Mr. Clark said in an email, using the abbreviation for Department of War, as the administration calls the Defense Department.
Mr. Phelan also clashed with Mr. Hegseth over personnel issues in the Navy and Marine Corps, a former senior military official said. Mr. Hegseth has directed service secretaries to scrub the social media accounts of general- and admiral-level promotion candidates to ensure they are not deemed too “woke” by Mr. Hegseth’s standards, the official said.
Maggie Haberman and Eric Schmitt contributed reporting.
Politics
Manhattan DA’s office employee charged with sexual abuse after alleged incident on Queens subway
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An analyst with the Manhattan District Attorney’s Office was arrested Tuesday on allegations that he sexually abused a woman while off duty, police told Fox News Digital Wednesday.
Tauhid Dewan, 28, is accused of inappropriately touching a 40-year-old woman’s private area during a late-afternoon rush-hour subway ride in Queens, according to local outlet PIX11.
The victim was reportedly a random woman, the outlet added, citing sources who said she and the suspect were strangers.
A spokeswoman for the office told Fox News Digital that the staffer has since been suspended.
MAN ARRESTED IN NYC STRANGULATION DEATH OF WOMAN FOUND OUTSIDE TIMES SQUARE HOTEL
Tauhid Dewan, 28, was arrested in New York City Tuesday following allegations that the Manhattan DA staffer innapropriately touched a woman during a subway ride (LinkedIn)
According to the New York Police Department, Dewan was arrested around 5 p.m., possibly after returning from work.
PIX11 added that the arrest occurred minutes after the incident, which allegedly took place on a No. 7 train near the Junction Boulevard station.
He was subsequently arrested by the NYPD Transit Bureau and is facing multiple charges, including forcible touching on a bus or train, third-degree sexual abuse, and second-degree harassment involving physical contact.
He was also charged with acting in a manner injurious to a child under the age of 17, suggesting a minor may have been nearby and either witnessed the alleged conduct or was placed at risk by it.
ERIC SWALWELL FACES MANHATTAN SEX ASSAULT PROBE AFTER ENDING CALIFORNIA GOVERNOR CAMPAIGN AMID ALLEGATIONS
Tauhid Dewan is an employee of the Manhattan District Attorney’s Office, which is led by DA Alvin Bragg. (Spencer Platt/Getty Images)
Law enforcement sources said Dewan has no prior arrests, local outlets reported.
According to city records, Dewan has worked at the Manhattan District Attorney’s Office as a senior investigative analyst for nearly four years, since July 10, 2022.
People board a train at a subway station in New York City on Aug. 1, 2025. (Gary Hershorn/Getty Images)
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His arraignment in Queens Criminal Court was scheduled for Wednesday, according to state records.
Politics
As primary election nears, top candidates for California governor debate tonight
SAN FRANCISCO — With the California governor’s race quickly approaching, six candidates will face off Wednesday evening in the first debate since former Rep. Eric Swalwell dropped out of the race in the aftermath of sexual assault and misconduct allegations.
The debate takes place at a critical moment in the turbulent contest to replace termed-out Gov. Gavin Newsom. Ballots will start landing in Californians’ mailboxes in less than two weeks, and voters are split by a crowded field of eight prominent candidates. The debate also takes place after former state Controller Betty Yee ended her campaign because of a lack of resources and support in the polls.
Two Republicans — Riverside County Sheriff Chad Bianco and conservative commentator Steve Hilton — and four Democrats — billionaire Tom Steyer, former Biden administration Secretary Xavier Becerra, former Orange County Rep. Katie Porter and San Jose Mayor Matt Mahan — will take the stage at Nexstar’s KRON4 studios in San Francisco. Former Los Angeles Mayor Antonio Villaraigosa and state Supt. of Public Instruction Tony Thurmond, both Democrats, were not invited to participate because of their low polling numbers.
As the candidates strive to distinguish themselves in a crowded field, the debate could include fiery exchanges about the role of money in politics and potential heightened attacks on Becerra, who has surged in the polls since Swalwell dropped out. With the debate taking place on Earth Day, environmental issues are also likely to be raised.
The Wednesday night gathering is the first televised debate in the gubernatorial contest since early February. Last month, USC canceled a debate hours before it was set to begin over mounting criticism that its criteria excluded all major candidates of color.
The 7 p.m. debate is hosted by Nexstar and will be moderated by KTXL FOX40 anchor Nikki Laurenzo and KTLA anchor Frank Buckley. It can be viewed on KRON4 (San Francisco), KTLA5 (Los Angeles), KSWB/KUSI (San Diego), KTXL (Sacramento), KGET (Bakersfield) and KSEE (Fresno). NewsNation will also air the debate.
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