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Fed Chair Jerome Powell Shows Little Urgency to Lower Rates

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Fed Chair Jerome Powell Shows Little Urgency to Lower Rates

Jerome H. Powell, chair of the Federal Reserve, signaled little urgency to lower interest rates with the economy sturdy and inflation still too high in a hearing with lawmakers on Tuesday.

Mr. Powell, who testified before the Senate Banking Committee, confronts an economic and political landscape that is far different from what it was when he last appeared before Congress in July. The Fed has paused its rate-cutting plans with inflation still above its target, and questions are swirling about how it will navigate the economic and institutional ramifications of tariffs and other policies that President Trump has put at the center of his presidency.

“We do not need to be in a hurry to adjust our policy stance,” Mr. Powell told lawmakers.

The semiannual hearings, which will continue on Wednesday before the House Financial Services Committee, follow the Fed’s move into a new phase in its yearslong effort to tame price pressures. After lowering rates by a full percentage point last year, the Fed is in a holding pattern as it assesses how quickly to release its grip on the economy and ease borrowing costs.

Mr. Powell emphasized that conditions across the labor market “remain solid and appear to have stabilized.” That has given the central bank latitude to be patient about its next steps, especially since progress toward its 2 percent inflation goal has recently been bumpy.

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“If the economy remains strong, and inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer,” Mr. Powell said. “If the labor market were to weaken unexpectedly or inflation were to fall more quickly than anticipated, we can ease policy accordingly.”

The incoming inflation data has been slightly more reassuring, with price gains finally moderating in key sectors like housing. But sweeping proposals put forward by Mr. Trump that would affect immigration, tariffs and taxes have made the Fed’s job much more difficult.

The Fed, during Mr. Trump’s first trade war, did not respond to what it generally perceived as a one-off jump in prices stemming from tariffs. Instead, central bankers focused on souring business sentiment and a pullback in global demand, prompting it to lower rates in 2019 to shore up the economy.

The Fed could follow that same playbook this time. But much will depend on whether consumer and business expectations of future inflation remain in check. Because the backdrop is so different from 2018 — when inflation was too low — the fear is that Americans emerging from the worst shock to prices in decades will be more sensitive to additional increases.

Mr. Powell said the Fed’s job was not to comment on tariff policy, but to “try to react to it in a thoughtful, sensible way.” He later added that it would be “unwise to speculate” about the economic impact but said the Fed would be focused on the “net effect” of what Mr. Trump planned to pursue with regard to deportations, fiscal spending and taxes as well.

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Already there are signs that people are bracing for higher inflation. Expectations about what will happen in the year ahead have risen sharply, according to a preliminary survey published by the University of Michigan on Friday.

Short-term metrics like that tend to bounce around a bit, so Fed officials focus on longer-term expectations. A new measure released by the Federal Reserve Bank of New York on Monday showed year-ahead inflation expectations steadying in January, while those over a five-year horizon rose slightly.

Mr. Powell expressed no concern on Tuesday about Americans’ expectations about future inflation and said that “policy is well positioned to deal with the risks and uncertainties that we face.”

The rules and regulations that govern Wall Street are also in focus for lawmakers, given the numerous changes since Mr. Powell last testified. The central bank has paused any “major rulemakings” after its top Wall Street cop, Michael Barr, decided a month ago to step down as vice chair for supervision. He said he was relinquishing that role, but not his Fed governorship, to avoid a lengthy legal battle with Mr. Trump that he feared could damage the Fed.

Mr. Barr had faced intense resistance from Wall Street and some of his own colleagues for seeking to impose stricter rules on big banks. He was eventually forced to scrap his initial proposal and issue a new one with significantly less onerous requirements. Mr. Powell said on Tuesday that the level of capital at the largest banks was “about right,” but acknowledged that having a global standard for regulations, known as “Basel III endgame,” was “good” for both U.S. banks and the economy.

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Mr. Powell faced a number of questions from Republican senators about “debanking,” which refers to the closing of customer accounts for politically motivated reasons. The Fed chair said that he was “troubled by the quantity of these reports” and that it was “fair to take a fresh look” at the practice.

Mr. Powell confirmed that the Fed had removed language in a manual for its regional reserve banks regarding master accounts, which give financial companies access to the Fed’s payment systems. It had previously said reserve banks should “consider the conduct of the institution and its leadership” and the prospects of “undue reputational risks” before proceeding. One focal point was whether the institution engaged in “controversial commentary or activities.”

The Fed’s chair also came under fire for changes set to be made on the yearly stress tests it runs on the country’s largest banks to gauge their ability to withstand big economic and financial market shocks. Banking lobbyist groups sued the institution over the issue in December.

In a letter sent to Mr. Powell ahead of the hearings, Senator Elizabeth Warren of Massachusetts joined Representative Maxine Waters of California in calling on the Fed to resist making those changes or risk allowing banks to “game the stress tests” in a way that could ultimately undermine the stability of the financial system.

“The changes sought by big banks — like previous rollbacks of banking rules — will come back to haunt families, small businesses and the economy, increasing the likelihood of another Wall Street-driven economic collapse,” said the letter, which was seen by The New York Times.

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Ms. Warren, the ranking Democrat on the Banking Committee, and Ms. Waters, who serves in a parallel role on the Financial Services Committee, also made the case that the banks’ legal arguments “do not have merit” and suggested that they would not hold up if the Fed would “vigorously defend its clear legality in court.”

The confrontation comes amid apprehension about how the Fed is handling directives from the White House. The central bank operates independently of the executive branch and prizes above all its ability to make decisions on interest rates without interference.

“We are concerned that, instead of fighting against the banks in courts and elsewhere, the Fed is now — in the wake of President Trump’s election — seeking new avenues for premature surrender,” Ms. Warren and Ms. Waters said in their letter to Mr. Powell.

The issue of policy independence reared up during Mr. Trump’s first term as he consistently attacked Mr. Powell for resisting his demands to lower interest rates speedily enough. He has been more circumspect so far in his second term, even saying the Fed’s decision to pause rate cuts in January “was the right thing to do.”

Asked about what he would do if Mr. Trump tried to remove a member of the Fed’s policymaking Board of Governors, Mr. Powell said, “It’s pretty clearly not allowed under the law.”

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On issues apart from its policy independence, the Fed has shown a clear willingness to align with the White House when it deems it is appropriate and lawful. Most recently, the Fed voluntarily complied with Mr. Trump’s executive order to halt hiring. The Fed has also scaled back on its diversity, equity and inclusion programs as well as public initiatives related to climate change — areas the Trump administration has railed against.

Still, Mr. Trump’s imprint on the Fed so far pales next to what other agencies have experienced. The Consumer Financial Protection Bureau, the federal government’s financial industry watchdog, was effectively shut down over the weekend, with its acting director, Russell Vought, ordering employees to cease working.

Mr. Vought, who leads the Office of Management and Budget, also cut off the consumer bureau’s funding, which originates from requests to the Fed. The central bank last transferred $245 million in January to cover a portion of the agency’s 2025 budget of around $800 million.

Mr. Powell was pressed repeatedly by Democrats on Tuesday about the potential impact on consumers if the bureau ceases operations. He conceded that the Fed had limited jurisdiction and agreed that there would be a gap in terms of enforcement.

Mr. Powell was also asked about the Treasury Department’s payments system, which channels about 90 percent of the payments for the government and has been a source of concern after Elon Musk’s team recently gained access to it. Mr. Powell confirmed that the Fed’s sole role is to execute the payments directed by Treasury and that the central bank’s capacity to carry out those duties was “safe.”

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Federal judge strikes down Trump’s order blocking development of wind energy

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Federal judge strikes down Trump’s order blocking development of wind energy

A federal judge on Monday struck down the Trump administration’s ban on federal permits for wind energy projects in what supporters said was an important victory for the embattled industry.

President Trump issued the ban on his first day back in office through an executive order that called for the temporary withdrawal of nearly all federal land and waters from new or renewed wind-energy leasing. The president said such leases “may lead to grave harm” including negative effects on national security, transportation and commercial interests, among other justifications.

U.S. District Judge Patti B. Saris, for the District of Massachusetts, ruled that the ban is “arbitrary and capricious and contrary to law,” and said the concern about “grave harm” was insufficient to justify the immense scope of a moratorium on all wind energy.

The challenge was brought by attorneys general in 17 states, including California, and Washington.

In it, they argued that halting federal wind permits created an “existential threat” to the wind industry that could erase billions of dollars in investments and tens of thousands of jobs.

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“A court has agreed with California and our sister states nationwide: The Trump Administration’s attempt to thwart states’ efforts to make energy more clean, reliable, and affordable for our residents is unlawful and cannot stand,” California Atty. Gen. Rob Bonta said in a statement. “The Trump Administration seems intent on raising costs on American families at every juncture — and California is equally committed to challenging every one of its illegal attempts to make life more expensive for Californians.”

At least seven major offshore wind projects were paused as a result of the federal permitting ban, according to the nonprofit Natural Resources Defense Council, plus several more that were in early phases of development.

“This ban on wind projects was illegal, as this court has now declared. The administration should use this as a wake-up call, stop its illegal actions and get out of the way of the expansion of renewable energy,” said Kit Kennedy, the council’s managing director for power, in a statement.

The lawsuit noted the president’s executive order was issued the same day as his National Energy Emergency Declaration, which encouraged domestic energy development not tied to wind and other renewables. The president has heavily supported fossil fuel production including oil, gas and coal.

In a statement to The Times, White House spokeswoman Taylor Rogers said offshore wind projects were given “unfair, preferential treatment” under the Biden administration while the rest of the energy industry was “hindered by burdensome regulations.”

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“President Trump’s day one executive order instructed agencies to review leases and permitting practices for wind projects with consideration for our country’s growing demands for reliable energy, effects on energy costs for American families, the importance of marine life and fishing industry, and the impacts on ocean currents and wind patterns,” Rogers said. “President Trump has ended Joe Biden’s war on American energy and unleashed America’s energy dominance to protect our economic and national security.”

California has vowed to stay the course on offshore wind despite the federal challenges.

The state has an ambitious goal of 25 gigawatts of floating offshore wind energy by 2045, by which point California officials say offshore wind could represent 10% to 15% of the Golden State’s energy portfolio. Five ocean leases have already been granted to energy companies off Humboldt County and Morro Bay.

In August, the Trump administration said it was cutting $679 million for “doomed” offshore wind projects, including $427 million that had been earmarked for California.

Ted Kelly, director and lead counsel of U.S. clean energy at the nonprofit Environmental Defense Fund, said obstructing the build-out of clean power is the wrong move as the country’s need for electricity is surging from data centers, industry and other demands.

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Wind, solar and battery storage offer the most affordable ways to get more reliable power on the grid, Kelly said.

“We should not be kneecapping America’s largest source of renewable power,” he said, “especially when we need more cheap, homegrown electricity.”

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Sick City Records tries to ‘keep the music alive’ as potential closure looms

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Sick City Records tries to ‘keep the music alive’ as potential closure looms

Just a few storefronts away from the now-vacant Button Mash, Sick City Records is on the brink of sharing the same fate.

For nearly 20 years, therecord shop has offered Echo Park a rocker-themed hodgepodge of rare vinyl, vintage band tees and dapper haircuts from its singular barber shop chair. But as rent continues to increase and fewer people stop by to browse its sonic selection or get a trim, Sick City Records is struggling to keep its doors open.

“We’ve worked so hard for this. We’ve been doing this for 20 years. We have to fight to keep this place open — it’s what we love to do,” said Jesse Lopez, the record store’s co-owner and resident barber.

Lopez and his business partner, Brian Flores, attribute their financial difficulties to an overall rough year. In January, when the Eaton and Palisades fires broke out, the shop was desolate for around a month. Then, right as summer kicked off — usually a lucrative season for record-collecting tourists stopping by — ICE raids began happening all over the city.

According to Flores, the streets were filled with large fleets of cars all summer, with loud sirens on, trying to scare people. Recent data from the L.A. Economic Equity Accelerator and Fellowship and the L.A. County Economic Development Corp show that 43% of Latino business owners in the county reported revenue losses of 50% or higher since June.

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Co-owner Jesse Lopez, left, cuts the hair of Los Angeles resident Jason Berk, 33, inside of Sick City Records.

(Ronaldo Bolanos / Los Angeles Times)

“No one was walking around. It was June. Nobody’s walking their dog,” said Flores. “In this whole shopping center, everybody is an immigrant.”

The record shop’s finances reached an all-time low in October. The duo was two months behind rent; their inventory had gone stagnant and their once regular barber shop clients had become sporadic. The prospect of closing up shop and cutting their losses became more real than ever.

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In a last effort to save their music hub, Flores and Lopez have since picked up a vendor spot at the monthly Rose Bowl Flea Market, started a series of collaborative fundraisers with local artists and launched a GoFundMe account.

Since they first opened in 2006, Flores and Lopez have always specialized in rock, punk and alternative — carrying bands like the Velvet Underground, the Smiths, Siouxsie and the Banshees and Suede. The inside of their space reflects that — the walls are filled with wheatpasted skulls; rows of Iron Maiden and Suicidal Tendencies tees line the perimeter and their most valuable merchandise — like a sealed Iggy Pop vinyl, a clear variant of Portishead’s “Dummy,” and a signed Echo & the Bunnymen record — hang high on elevated shelves.

“A lot of stuff’s been sitting here for a long time,” Flores confessed as he looks around at the different half-filled genre crates.

“We try to make what we can. We make our own buttons. We do our own silk screening. We can’t buy high-end vintage. We can’t afford it right now,” he added. “It’s embarrassing when the kids are asking for new rap records and these record guys come in looking for something special, but we don’t have it.”

Band T-shirts and vinyl records hang on a wall inside of Sick City Records.

Band tees and vinyl records hang on a wall inside of Sick City Records.

(Ronaldo Bolanos / Los Angeles Times)

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In recent years, Sick City has also made an effort to expand into other genres, and now carries anything from country to jazz and rap. Between albums like Tyler the Creator’s “Cherry Bomb” and the Cocteau Twins’ “Heaven or Las Vegas,” Flores says they will always dedicate several of their crates to local underground acts, featuring anything from their customers’ passion projects to bands who play the city’s bars and house shows.

Their local selection is usually most popular during the summertime and when people are in town for events like the relatively nearby Coachella Valley Music and Arts Festival.

“Truthfully, this year we haven’t had that many tourists. People are usually looking for L.A. bands to take home to places like Australia and Canada and ask us for recommendations,” said Flores. “But this year, without tourists, it’s still slow.”

Their dedication to L.A.’s local sounds goes back to their roots as a business. In 1999, the duo first sold vintage band tees at Melrose Trading Post. At the time, the market was mostly older vendors selling novelty items. Flores and Lopez decided to shake things up a bit by playing Metallica in the early-morning hours and began to build a younger clientele who were interested in their vintage clothing. Over time, they learned how to screen print and started selling their own designs.

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After about five years of selling at the market, they decided to upscale into a more permanent business that would focus on music. In 2006, they opened a space in Silver Lake that functioned as a barbershop with a couple of record crates. Despite it being the early 2000s, the vendors were ahead of the up-and-coming vinyl revival, as millennials started to pay more attention to physical media.

As record-collecting grew in popularity and events like Record Store Day went mainstream, they saw a surge in sales. In 2008, they expanded the record portion of their business, opening their current location in Echo Park.

With this stint of success, the record shop started to function as a record label as well. In the early 2010s, the duo helped some customers and longtime friends who were in bands release, distribute and promote their albums. Flores and Lopez would help choose the album art, the order of the track list and help book shows.

Sick City Record owners Jessie Lopez, left, and Brian Flores pose for a portrait.

Sick City Records owners Jessie Lopez, left, and Brian Flores at their Echo Park shop.

(Ronaldo Bolanos / Los Angeles Times)

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One of the first bands they worked with was local rock group the High Curbs, who were teenagers at the time and thereforestruggled to get into the bars where they were booked to play. With the help of Sick City, they were able to release their 2016 album. The band, which still regularly tours and releases music, made its return to the record shop earlier this summer for the annual music festival Echo Park Rising.

“They told me, ‘We don’t do any small shows anymore, but for Echo Park Rising, we want to give back and play for you guys.’ We had a full house,” Flores said. “We felt the love back.”

At the height of the business, when they were funding their record label, Flores says they were making around $8,000 a month. Now they are making closer to $2,000 monthly, with customers spending an average of around $10 per visit. On a weekday afternoon in November, a handful of patrons came into the shop to sift through their vinyl selection, but only one customer made a purchase.

“We want to do more. We want to do more shows and promote more bands. We’ve done shows at Los Globos, the Silverlake Lounge, the Redwood [Bar and Grill]. But all this costs money,” Flores said. “So when we were able to put out those records, it was very expensive at the time, but we were able to do it.”

Flores and Lopez continued to operate out of both stores until 2020, when they decided to consolidate both businesses into the one that exists today.

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Since the pandemic, Sick City Records’ rent has continually increased. In 2020, the duo paid $1,800 for the space. Today they pay $3,500. In the last several years, gentrification has taken hold of Echo Park, hiking up both residential and commercial rent. Flores says that in the nearly 20 years that they’ve been on Sunset Boulevard, he’s seen many small businesses collapse from these strains.

Scenes from the inside of Sick City Records in Echo Park Wednesday, Oct. 16, 2024 in Los Angeles.

With a specialty in rock, punk and alternative, Sick City Records’ selection often spotlights local L.A. acts.

(Andres Melo / For The Times)

“There are a couple of small coffee shops, like Woodcat, that are still there. But Spacedust [a clothing shop] is gone. Cosmic Vinyl is gone,” said Flores. The latter establishment shuttered in 2018 but reopened earlier this year at a new location in Eagle Rock.

“There’s no parking. I don’t know why they keep raising the rent. But Echo Park has always been a hub where people want to be.”

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Sick City Records has several fundraisers and flea market pop-ups planned before the end of the year. On Dec. 13, they will be hosting an art show at the shop called “Hold On to Your Friends,” which will feature live DJs, local artists and vendors. All proceeds will go to keeping Sick City in operation.

“Hopefully, people don’t forget about us. We’re just trying to keep the music alive, keep a good vibe and keep promoting the music community,” said Flores. “We just got to get back on our feet. We want to bring in product that we’re proud of.”

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Video: Trump Says That Netflix’s Warner Bros. Deal ‘Could Be a Problem’

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Video: Trump Says That Netflix’s Warner Bros. Deal ‘Could Be a Problem’

new video loaded: Trump Says That Netflix’s Warner Bros. Deal ‘Could Be a Problem’

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Trump Says That Netflix’s Warner Bros. Deal ‘Could Be a Problem’

President Trump said on Sunday that Netflix’s proposed $83 billion merger with Warner Bros. “could be a problem” because it involves “a very big market share.”

Reporter: “Should they be allowed to buy Warner Brothers?” Trump: “So that’s the question. They have a very big market share, and when they have Warner Brothers, that share goes up a lot. So I don’t know. That’s going to be for some economists to tell, and also, and I’ll be involved in that decision, too. But they have a very big market share.” Reporter: “Did he (Netflix co-chief executive Ted Sarandos) make any guarantees to you about the merger, if they do merge?” Trump: “No, no, not at all. He came up. He was in the Oval Office last week. I have a lot of respect for him. He’s a great, he’s a great person. But he’s done one of the greatest jobs in the history of movies and other things. And he’s got a lot of interesting things happening, aside from what you’re talking about. But it is a big market share. There’s no question about that. It could be a problem.”

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President Trump said on Sunday that Netflix’s proposed $83 billion merger with Warner Bros. “could be a problem” because it involves “a very big market share.”

By Aritz Parra

December 8, 2025

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