Business
Defiant independence from the Federal Reserve catches Trump off guard
WASHINGTON — White House officials were caught by surprise when a post appeared Sunday night on the Federal Reserve’s official social media channel, with Jerome Powell, its chairman, delivering a plain and clear message.
President Trump was not only weaponizing the Justice Department to intimidate him, Powell said to the camera, standing before an American flag. This time, he added, it wasn’t going to work.
The lack of any warning for officials in the West Wing, confirmed to The Times, was yet another exertion of independence from a Fed chair whose stern resistance to presidential pressure has made him an outlier in Trump’s Washington.
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Powell was responding to grand jury subpoenas delivered to the Fed on Friday related to his congressional testimony over the summer regarding construction work at the Reserve.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,” Powell said.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions,” he added, “or whether instead monetary policy will be directed by political pressure or intimidation.”
For months, Trump and his aides have harshly criticized Powell for his decision-making on interest rates, which the president believes should be dropped faster. On various occasions, Trump has threatened to fire Powell — a move that legal experts, and Powell himself, have said would be illegal — before pulling back.
The Trump administration is currently arguing before the Supreme Court that the president should have the ability to fire the heads of independent agencies at will, despite prior rulings from the high court underscoring the unique independence of the central bank.
The decision by the Justice Department to subpoena the Fed over the construction — a $2.5-billion project to overhaul two Fed buildings, operating unrenovated since the 1930s — comes at a critical juncture for the U.S. economy, which has been issuing conflicting signals over its health.
Employers added only 50,000 jobs last month, fewer than in November, even as the unemployment rate dipped a tenth of a point to 4.4%, for its first decline since June. The figures indicate that businesses aren’t hiring much despite inflation slowing down and growth picking up.
The government reported last month that inflation dropped to an annual rate of 2.7% in November, down from 3% in September, while economic growth rose unexpectedly to an annual rate of 4.3% in the third quarter.
However, the long government shutdown interrupted data collection, lending doubt to the numbers. At the same time, there is uncertainty about the legality of $150 billion or more in tariffs imposed on China and dozens of countries through the International Emergency Economic Powers Act, which has been challenged and is under review by the Supreme Court.
As inflation has cooled, the Fed under Powell has incrementally cut the federal funds rate, the target interest rate at which banks lend to one another and the bank’s primary tool for influencing inflation and growth. The Fed held the rate steady at a range of 4.25% to 4.5% through August, before a series of fall cuts left it at 3.5% to 3.75%.
That hasn’t been enough for Trump, who has called for the rate to be lowered faster and to a nearly rock bottom 1%. The last time the central bank dropped the rate so low was in the dark days of the early pandemic in March 2020. It began raising rates in 2022 as inflation took off and proved stubborn despite the bank’s efforts to rein it in.
Mark Zandi, chief economist at Moody’s Analytics, said there is room to continue lowering the federal funds rate to 3%, where it should be in a “well functioning economy, neither supporting or restraining growth.”
However, muscling the Fed to lower rates and reduce or destroy its independence is another matter.
“There’s no upside to that. It’s all downside, different shades of gray and black, depending on how things unfold,” he said. “It ends in higher inflation and ultimately a much diminished economy and potentially a financial crisis.”
Zandi said much will hinge on the Supreme Court’s decision on whether Trump can remove Federal Reserve Governor Lisa Cook, which he sought to do last year, citing allegations of mortgage fraud she denies.
While Powell’s term as chairman ends in May, his term as a governor — influencing interest-rate decisions — extends to January 2028. A criminal indictment over the construction project could provide Trump the legal justification he needs to remove him altogether.
“When he steps down in May, will he stay on the board or does he leave? That will make a difference,” Zandi said.
A key issue will be how much independence the Fed retains, he said, given the central bank’s role in establishing the U.S. as a safe haven for international bond investors who play a key role funding the federal deficit.
The investors rely on the bank to keep inflation under control, or they will demand the government pay more for its long term bonds — though the subpoenas had little effect so far Monday on bond prices.
“There are scenarios where the bond market says, ‘Oh my gosh, we’re going to see much higher inflation, and there’s a bond sell-off and a spike in long-term rates,” he said. “That’s a crisis.”
Zandi said that even if the worst-case scenarios don’t play out, it will take time for the Federal Reserve to reestablish its reputation as an independent bank not influenced by politics.
“I’m not sure investors will ever forget this,” he said. “Most importantly, it depends on who Trump nominates to be the next chair of the Federal Reserve — and how that person views his or her job.”
Lawmakers from both parties have questioned the motivation behind the investigation.
North Carolina Sen. Thom Tillis, a Republican member of the Senate Committee on Banking, Housing and Urban Affairs, has said he plans to oppose the confirmation of any nominee for the Fed until the legal matter is “fully resolved.”
“If there were any remaining doubt whether advisers within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none,” Tillis wrote in a social media post.
Sen. Elizabeth Warren, the top Democrat on that committee, accused Trump of trying to “install another sock puppet to complete his corrupt takeover of America’s central bank.”
“Trump is abusing the authorities of the Department of Justice like a wannabe dictator so the Fed serves his interests, along with his billionaire friends,” Warren said in a statement.
Rep. French Hill (R-Ark.), the chairman of the House Financial Services Committee, also expressed skepticism about the inquiry, which he characterized as an “unnecessary distraction.”
“The Federal Reserve is led by strong, capable individuals appointed by President Trump, and this action could undermine this and future Administrations’ ability to make sound monetary public decisions,” Hill wrote in a statement.
As Hill raised concerns about the investigation, he added he personally knew Powell to be a “person of the highest integrity.”
House Speaker Mike Johnson (R-La.), meanwhile, dismissed the idea that the Justice Department was being weaponized against Powell. When asked by a reporter if he thought that was the case, he said: “Of course not.”
Times staff writers Wilner and Ceballos reported from Washington and Darmiento from Los Angeles.
Business
Child safety groups want FTC to investigate Roblox
Child safety advocates say the massively popular gaming platform Roblox could be bad for kids.
Fairplay and the National Center on Sexual Exploitation have requested the Federal Trade Commission to investigate if the games on Roblox are designed to make kids spend an unhealthy amount of time and money on their screens.
Roblox’s core users are young kids.
In a letter submitted to the FTC, the groups argue that Roblox’s engagement-maximizing design features, virtual currency system, and voice and text chat communication features are inappropriate for the platform’s user base and pose a substantial risk of harm.
“Alone and in combination, these three components capitalize on young users’ developmental vulnerabilities, exploit their desire for authentic self-expression, monetize their lack of impulse control, and turn in-game purchasing power into a form of social status,” the groups noted in the letter submitted Thursday to the FTC.
Roblox allows the purchase of virtual assets — clothing and dance moves, for example — which can only be purchased with the platform’s in-game currency, Robux. The platform obscures the exchange rate between dollars and the in-game currency, leaving young players to navigate a complex system of fluctuating conversion rates that increases the amount of real-world money players spend, according to the letter.
For instance, players can receive more Robux per dollar by purchasing larger bundles of currency or buying a “Roblox Premium” subscription, making it harder for children to perform financial calculations on how much they are spending on the platform.
The letter pointed to instances of unexpected Roblox charges, as one parent discovered that his daughter spent more than $5,000 on Roblox without understanding that she was spending real money.
The letter also outlined examples of “scarcity marketing” techniques that increase demand through limited-quantity assets and time-based reward to drive sales of virtual items, driving a false sense of urgency. Some see it as a strong-arm sales technique that should not be used on children:
“Items only available for a limited time encourage both rapid purchases and returning to the platform frequently — sometimes multiple times per day — to avoid missing out on items,” the letter said.
A Roblox spokesperson said that the company “strongly disputes these claims. Our platform is designed to provide a positive, healthy and enjoyable experience — we build for fun and connection, not short-term engagement. While no system can be perfect, we have a set of safeguards designed to support a safe and civil environment, and clear policies for game creators that require fair treatment of players.”
The groups pointed out that third-party games developed on Roblox are designed to profit from in-game purchases, and have “gambling-like” engagement mechanisms such as lootboxes, in which players cannot see what’s inside until after they have purchased it — and the items vary in value.
“We have clear policies prohibiting both actual and simulated gambling, and a set of rules governing how game creators can use gameplay mechanics like paid random items,” the Roblox spokesperson said. “Most games on Roblox are free to play and no one is required to purchase Robux. In the first quarter of 2026, only 1.4% of our 132 million daily active users were payers on the platform.”
The letter also alleged that the voice and text chat features on the platform expose children to sexual content, and argue that recent changes to age checks have not eliminated opportunities for adult-minor contact.
Business
The Homesteading Mother of 6 Taking On Big Tech
Everyone will know more, he told me, when Quantica signs a contract with a tech company to use the facility. That announcement could come by the end of the year.
Besides, Mr. Peterson said, much of the apprehension over the data center comes from people who are afraid of A.I. more broadly, as if “Big Brother is going to take over,” he said.
Those people, he added, “have no role in this conversation.”
What Mr. Peterson could tell me now, he said, was that the project would have minimal impact on the land and the people who live nearby. And residents wouldn’t have to pay a thing for it. He offered no guarantees, but said the project would bring its own power — at least some of it from solar and natural gas.
Despite what opponents have been saying, and despite the information gleaned from data centers around the world, Mr. Peterson said the Broadview site would need “not that terribly much” water.
It will bring jobs, he said. Thousands of temporary workers could descend on Broadview for the construction. The number of permanent jobs would be 30, 40, 100 — he doesn’t know for sure. But he described them as good-paying jobs that would not require specialized training or a college education. Jobs like janitors, maintenance workers or security guards.
He likened it to “being a miner, but not having to grab a drill.” Generations of families could stay in Broadview because people would not have to move to make a living, as many are doing now. They could say, “Oh my gosh, I could push a broom and come home to my home in Lavina that I love — and my kids can do that?”
For anyone who doesn’t like the idea of living next to a data center, he added, “there’s probably a county up the road that doesn’t have one.”
He said the eventual deal would include a “community benefits package,” which could help Broadview pay for things like its problematic wastewater lagoon. The Montana Department of Environmental Quality issued the town a violation in March for longstanding issues at the site, demanding compliance. Remediation could cost millions.
Business
Can Disney recapture the Force with ‘The Mandalorian and Grogu’?
After a 6½-year hiatus from theaters, “Star Wars” returns to the big screen this weekend with “The Mandalorian and Grogu.”
This time around, however, the franchise faces a much different universe than it did in 2019 when the last film came out. For one, theatrical attendance has fallen dramatically since “Star Wars: Episode IX — The Rise of Skywalker” grossed more than $1 billion worldwide in the pre-pandemic days.
Then, there’s Walt Disney Co.-owned Lucasfilm’s own trajectory. In the last few years, new “Star Wars” stories have come only via streaming series on Disney+. And since the service debuted in 2019, the San Francisco-based studio pumped out 13 shows, including “The Mandalorian,” which inspired the film, though others received mixed reviews.
Lucasfilm is also under new leadership, as veterans Dave Filoni and Lynwen Brennan are now co-presidents after George Lucas’ handpicked successor, Kathleen Kennedy, stepped down this year.
It all adds up to a crucial question: Can the nearly 50-year-old franchise still delight its longtime fans, while bringing in new viewers to help it endure?
“There’s a lot riding on this,” said Jeff Bock, box-office analyst at entertainment data and research firm Exhibitor Relations. “It’s close to a make-or-break strategic test … just to see if the modern ‘Star Wars’ is still viable theatrically.”
“The Mandalorian and Grogu” is expected to gross around $80 million in the U.S. and Canada for the four-day Memorial Day weekend, according to studio estimates.
That would rank among some of the top openings this year, including Amazon MGM Studios’ “Project Hail Mary” ($80.5 million) and Disney-owned 20th Century Studios’ “The Devil Wears Prada 2” ($76.7 million). Another big sci-fi installment, Warner Bros. Pictures and Legendary Entertainment’s “Dune: Part Two,” opened to $82.5 million in 2024.
But for a “Star Wars” movie, that’s considered low.
2019’s “The Rise of Skywalker,” for example, opened to $177 million, with 2015’s “The Force Awakens” and 2017’s “The Last Jedi” each debuting to more than $200 million. The $84-million opening for 2018’s “Solo: A Star Wars Story” was considered a disappointment at the box office.
To be sure, theatrical expectations have changed dramatically since the pandemic, which altered moviegoers’ habits and trained many to wait and watch films at home.
“The Mandalorian and Grogu” also stems from a streaming series and does not continue the story line of the traditional “Star Wars” saga films that follow the Skywalker family. (The movie’s reported production budget of $166 million also makes it cheaper than its predecessors.)
And for Disney, box-office revenue will not be the only indicator of this film’s success.
Director Jon Favreau, left, and Pedro Pascal on the set of Lucasfilm’s “Star Wars: The Mandalorian and Grogu.”
(Nicola Goode / Lucasfilm Ltd. / Disney via Associated Press)
The company expects the movie will boost other parts of its business, including streaming, its gaming collaboration with Fortnite and the all-important theme parks, where the film’s main characters appear at the Star Wars: Galaxy’s Edge-themed land, and the Millennium Falcon: Smugglers Run ride has been overlaid with a “Mandalorian and Grogu” storyline.
Then of course, there’s merchandise. (Famously, fans rushed to buy items of Grogu — known colloquially as Baby Yoda — after “The Mandalorian” show debuted in 2019, though products didn’t arrive for months. Once available, 13 million Grogu toys were sold in the two years after they were released, Disney has said.)
“It’s not using cinema in the way ‘Star Wars’ used cinema before,” said Carmelo Esterrich, a professor at the school of communication and culture at Columbia College Chicago, who has written about how “Star Wars” is a reflection of American culture. “It’s using the franchise of television and the power machine of Grogu to bring it to the big screen.”
Grogu’s appeal highlights an important goal for the franchise: expanding beyond its original fan base to new audiences. Although “The Mandalorian and Grogu” builds on storylines from the streaming show, the film was designed to be accessible to viewers who had never watched it.
“I hope that our excitement and joy and love of ‘Star Wars’ translates to a new generation of fans seeing it, experiencing it the way we did for a long time,” director Jon Favreau told an audience in April at the CinemaCon trade conference during a presentation about Disney’s film lineup.
Early ticket sale tracking indicated strong interest from older men, who have historically been the core audience for “Star Wars” films. But after an extensive marketing campaign, Disney’s studio estimates now show audiences are younger, with more families and women represented.
To date, “The Mandalorian” is still the most popular Disney+ series. The show, which has run for three seasons, has won 15 Emmys, including for sound mixing and special effects. The critical and fan response, as well as the opportunity to explore new characters’ backstories, led Lucasfilm to choose this show to spin off into a movie, according to sources close to the studio.
Since the launch of the platform in November 2019, “The Mandalorian” and other “Star Wars” titles such as “The Acolyte” and the second season of “Andor” have seen relatively high audience demand, according to an analysis by Parrot Analytics, a firm that tracks streaming data. Despite several big hits, the average demand for live-action television series set in the galaxy far, far away have shown a slight downward trend over time.
In contrast, demand for live-action series from Disney-owned Marvel Studios has held stable since the premiere of its first streaming show, “WandaVision.” Though Marvel’s television offerings outnumber those of “Star Wars,” overall audience interest in the superhero shows is less than the biggest “Star Wars” hits and more comparable to some of Lucasfilm’s lesser-hyped titles, including “Skeleton Crew,” according to Parrot Analytics.
In the end, “The Mandalorian and Grogu” needs to keep audience interest in “Star Wars” on the big screen. Next year, Lucasfilm will release “Star Wars: Starfighter,” a film starring Ryan Gosling and directed by Shawn Levy of “Deadpool & Wolverine” that has generated great interest, particularly given Gosling’s turn in “Project Hail Mary.”
“This is a safe reentry point,” Bock of Exhibitor Relations said of “The Mandalorian” movie. “If Grogu can bring in the families and if ‘The Mandalorian’ continues to bring in the audiences of the old movies, maybe they can bridge these generations like classic ‘Star Wars’ once did.”
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