Member Briefing August 21, 2025
Fed Minutes Reveal Broad Support for Holding Rates Steady Last Month
The Federal Reserve’s decision to hold interest rates steady last month was broadly supported despite two officials who dissented in favor of a cut, according to minutes of the policy meeting released Wednesday. The minutes said “almost all” officials supported the decision, implying that apart from the two dissenting officials, it was backed by the remaining 16 officials who participated. While officials worried over the prospect of weaker employment at the meeting, a majority of them thought the risks of higher inflation was “the greater of these two risks.”
The written account of the meeting, released with a customary three-week lag, suggested officials were divided over when they could be confident that higher import costs wouldn’t lead to a period of broader, rolling price hikes. Some officials thought “a great deal could be learned in coming months” though others “noted that it would not be feasible or appropriate to wait for complete clarity on the tariffs’ effects on inflation before adjusting the stance of monetary policy.”
Lower Rates Fail To Boost Demand For Mortgages
Both refinance and homebuyer mortgage application volume stalled last week. Mortgage rates inched only very slightly higher, but it was enough to drop total application volume 1.4% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.68% from 6.67%, with points decreasing to 0.60 from 0.64, including the origination fee, for loans with a 20% down payment.
Applications to refinance a home loan fell 3% for the week but were 23% higher than the same week one year ago. This, despite the fact that rates today are actually higher than they were at this time last year. The previous week, refinance demand had surged 23% higher just week to week. With so few borrowers able to benefit from a refinance at today’s higher rates, this figure has become increasingly volatile. Applications for a mortgage to purchase a home rose 0.1% for the week but were also 23% higher than the same week one year ago.
S&P Affirms U.S. Credit Rating as Tariff Revenue Expected to Plug Fiscal Leaks
S&P Global Ratings has affirmed the credit ratings of the U.S., saying it expects robust revenues from the Trump administration’s newly instituted tariff regime to help offset the expected fiscal deterioration resulting from recent legislative changes. The sovereign credit ratings were held at AA+/A-1+, with the outlook remaining stable. The assessment comes despite concerns that the implementation of tariffs could put a brake on business confidence and economic growth while spurring inflation and slowing hiring.
The outlook was kept stable, reflecting expectation of continued resilience in the U.S. economy; credible, effective monetary policy execution; high, but not rising, fiscal deficits that underpin the increase in net general government debt; and the $5 trillion increase in the debt ceiling, it said. S&P said it expects net general government debt to approach 100% of GDP given “structurally rising non-discretionary interest and aging-related expenditure. Bipartisan cooperation to strengthen the U.S. fiscal profile—namely to meaningfully lower deficits and tackle budgetary rigidities—remains elusive,” it said.
Global Headlines
Middle East
- Iran Readies New Missiles for War - Newsweek
- How Much Damage Did U.S. Strikes Do to Iran’s Fordo Nuclear Site? - NYT
- Israel to Call Up 60,000 Reservists for Gaza City Invasion - WSJ
- A New Opposition Could Be A Healthy Sign For Syria – The Economist
- Israel Approves Settlement Project That Could Divide The West Bank - AP
- Netanyahu Accuses Macron Of Fueling Antisemitism, Further Inflaming Their Feud - Politico
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Conflicts in the Middle East – Live Universal Awareness Map
Ukraine
- Russia Says Ukraine Security Talks A ‘Road To Nowhere’ Without Moscow – The Hill
- White House Eyes Budapest For Peace Talks With Zelenskyy And Putin - Politico
- Attention Turns To Location Of A Potential Zelenskyy-Putin Meeting - Spectrum
- Putin Calls Zelensky the West’s Illegitimate Puppet. Can He Talk Peace With Him? - WSJ
- US, NATO Planners Start To Craft Ukraine Security Guarantee Options - Reuters
- For Putin, 'Security Guarantees' on Ukraine Mean Something Different - Newsweek
- Russia Wants … Russia To Have Veto Over Western Security Guarantees For Ukraine - Politico
- U.S. Is Prepared to Use Air Power to Support Planned European Force in Ukraine - WSJ
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- UK Inflation Hits Fresh High In July – Politico
- This 95-Year-Old Dreams of Walking Home to North Korea - WSJ
- Trump Called Orbán To Win His Support For Ukraine Joining EU: Report – The Hill
- China's Xi Makes Second-Ever Visit To Tibet As President - Reuters
- China's Growing Nuclear Arsenal - Reuters
- Almost 1M Belgian Users Hit By Orange Cyberattack - Politico
- India and China Mend Ties Amid Trump Tariff Threats - WSJ
- DR Congo And M23 Rebels Miss Peace Deal Deadline But Will Continue Talks – France 24
Policy and Politics
Fear Of Trump Funding ‘Wrench’ Escalates As Congress Faces Shutdown Cliff
With six weeks left until Oct. 1, lawmakers are staring down a government shutdown deadline alongside the threat of a “pocket rescission,” a controversial White House tactic to cancel federal cash without the consent of Congress. It’s also a ploy that the government’s top watchdog, along with key lawmakers from both parties, say is illegal. “The money evaporates at the end of the fiscal year,” White House budget chief Russ Vought said last month in defense of the gambit, adding it has “been used before.” Lawmakers anticipate Trump will send Congress a formal rescissions request to claw back billions of dollars in federal funding as soon as lawmakers return from recess in September.
Already, the threat of the White House then unilaterally canceling the funding in October — regardless of Congress’ response to the request — is straining negotiations between Democrats and Republicans desperately trying to head off a shutdown with bipartisan negotiations, which Vought is also actively seeking to undermine. Congress cleared an initial rescissions package of $9 billion in cuts to public broadcasting and foreign aid in July. The White House has stayed publicly mum on what sort of programming it would seek to slash next, but officials have previously signaled the Department of Education will be the target of a second package, which could align with Trump’s controversial goal of eventually eliminating the agency altogether.
Trump Says Fed Governor Cook 'Must Resign' As Pressure Campaign On Central Bank Continues
President Trump on Wednesday called on Federal Reserve governor Lisa Cook to resign as the public pressure on the central bank continues to build. "Cook must resign, now!!!" Trump wrote on his social media platform, Truth Social, Wednesday morning. He included a link to a Bloomberg report about a letter sent by Federal Housing Finance Agency head Bill Pulte urging Attorney General Pam Bondi to investigate Cook over a pair of mortgages. Pulte wrote in a letter dated Aug. 15 that Cook "falsified bank documents and property records to acquire more favorable loan terms, potentially committing mortgage fraud under the criminal statute."
The mounting discussion around Fed independence and political pressure currently being levied at the central bank comes ahead of the annual Jackson Hole Economic Symposium, which is set to feature Powell's key policy speech of the year on Friday morning.
Child Care in America Is Broken. Here Are Five Ideas for How to Fix It.
Working parents with young children are stretched thin; a year of daycare can easily cost more than a year of tuition at an in-state college. At the same time, child-care workers are severely underpaid, often earning barely enough to get by and with no real path to ever make much more. It is a problem with broad repercussions for the entire economy. Parents who can’t afford quality care, or can’t find it, can’t work. Young adults who are scared off by the cost of care might be less likely to have that second child, or even to have children in the first place. So, is there even a solution? Here are 5 ideas from leading thinkers.
- First, understand the underlying economic problem - Child care is expensive mainly because people are expensive. States enforce strict staffing ratios to ensure safety and quality.
- Figure out the best ways to train and equip teachers - The rules for who can teach at a daycare or preschool vary significantly, which can create problems.
- Give tax breaks and business training - Daycares are businesses just like laundromats and health clinics, but they often aren’t run by businesspeople.
- Get buy-in from companies - Parents are usually the ones footing the bill for child care in the U.S. But companies benefit when parents are freed up to work—and the government, for its part, benefits from getting taxpaying citizens.
- Change the way America thinks about child care - In the U.S., daycares and preschools have typically been viewed as a babysitting service. The K-12 system, on the other hand, is seen as a public good.
Political Headlines
- Trump Administration Strips Security Clearance From 37 Officials – Newsweek
- Obama Calls California’s Redistricting Proposal ‘Responsible,’ Report Says - Forbes
- Trump Targets The Smithsonian, Says It Focuses Too Much On How Bad Slavery Was - Reuters
- DOJ Investigating Whether DC Officials Falsified Crime Data – The Hill
- CNBC Survey: Hassett Likely To Be Trump’s Pick For Fed Chief, Though Warsh Is More Qualified - CNBC
- Bolivia's Quiroga Would Grant Resource Ownership Rights, Eyes US Trade - Reuters
- Newsom’s Trump Act Wins Raves From Democrats – The Hill
- US Navy Ship Catches Fire at Okinawa - Newsweek
- Trump Tracker: Keep Tabs On The Latest Announcements And Executive Orders - WSJ
Health and Wellness
In Break With Current CDC Recommendations, Leading Pediatrics Group Recommends Covid-19 Shots For Young Children
The American Academy of Pediatrics released its updated recommendations for vaccines on Tuesday, including Covid-19 shots for infants and young children – a break from the current US for Centers for Disease Control and Prevention recommendations. AAP has provided vaccine recommendations and published its own vaccine schedule throughout its nearly century-long history. But it has not traditionally diverged from federal recommendations.
The AAP recommendations are more explicit. It says that all children ages 6 through 23 months should receive a Covid-19 vaccine unless they have known allergies to the vaccine or its ingredients. It also recommends a single dose of the vaccine for children ages 2 through 18 years if they are at high risk of Covid-19, residents of long-term care facilities, have never been vaccinated against Covid-19, or live in a household with people who are high risk for Covid-19. It also says that the vaccine should be available for this age group even if they are not in these risk groups.
Industry News
Trade Wars
- US Tariffs On Chinese Graphite Spark Opportunity For India's Epsilon – Reuters
- As The U.S. Erects Trade Barriers, China Is Leaning Into Trade With Developing Countries - Marketplace
- Trump Slams ‘Anti-American’ Pushback After Fresh Delay To Arizona Copper Mine - CNBC
- A Record 383 Aid Workers Were Killed In Global Hotspots In 2024, Nearly Half In Gaza, UN Says - AP
- How One American Brand Stays Ahead of Trump Tariff Whac-a-Mole - NYT
- Sony Hikes PlayStation Console Prices By $50 Amid Trump Tariffs - Forbes
- Japan June Machinery Orders Rise 3.0% Month-On-Month – Reuters
GE Vernova Expands Gas Generator Production at Schenectady Plant
GE Vernova is increasing the capital investment program at its Schenectady, N.Y., plant by $41 million to increase manufacturing capacity for H65 and H84 generators, which are designed to accompany HA gas turbines in large-scale power generation, such as combined-cycle and simple cycle power plants. The new investment is expected to result in 50 new hires at Schenectady, according to GE Vernova – the General Electric spinoff that manufactures industrial and alternative energy systems.
The New York plant is among multiple GE Vernova locations that are being improved and expanded to address growing industrial demand for electric power generation. The new investment adds to more than $130 million in investments GE Vernova has announced for in Schenectady since 2023, including $50 million in 2023 for an onshore wind turbine manufacturing line, and $80 million announced this year for gas power and onshore wind turbine manufacturing.
Read more at American Machinist
GM Raided Silicon Valley to Build Its New AI Team. Here’s What It’s Doing.
In the last eight months, GM has made nearly a dozen hires from top tech companies—from Google to Meta to AWS—with the aim of building a small but elite AI center of excellence, much of it based in Mountain View, Calif. Two of the highest-profile hires so far include Barak Turovsky, Google’s former head of product for languages AI, who is now GM’s first chief AI officer, and John Anderson, a former Google machine-learning researcher and Pixar veteran, now executive director of AI research at the carmaker.
For many companies, the challenge posed by artificial intelligence rests in how to make practical use of it in operations. For a company like GM, that could mean incorporating AI into back-office workflows, but also into future fleets of autonomous vehicles, manufacturing robots and even motor sports. Currently the team is less than 20 people and the intent is to keep it small, Richardson said. It’s already helping GM executives from manufacturing to engineering use AI more effectively. “With all of the data from decades of manufacturing, we actually have a unique amount of IP [intellectual property] that’s going to let us develop that cobot robotics technology in-house better than you could get from a third party,” Richardson said.
Lowe’s Beats On Quarterly Earnings, Buys Home Pros Business For $8.8 Billion
Lowe’s beat Wall Street’s earning expectations on Wednesday as demand for home projects picked up during the quarter. The retailer also announced its latest effort to attract more business from home professionals. It said on Wednesday that it has struck a deal to acquire Foundation Building Materials, a distributor of drywall, insulation and other interior building products for large residential and commercial professionals, for about $8.8 billion. For the fiscal second quarter earnings per share were $4.33 vs. $4.24 expected and revenue was $23.96 billion vs. $23.96 billion expected
For the full year, Lowe’s said it expects total sales of $84.5 billion to $85.5 billion, an increase from its previous range of $83.5 billion to $84.5 billion. It reiterated its comparable sales, a metric that takes out one-time factors like store openings or closures, saying they will be flat to up 1% from the prior year. It expects earnings per share for the year of approximately $12.10 to $12.35, down slightly from its prior range of $12.15 to $12.40.
Target Affirms Guidance – Hires New CEO
Target beat Wall Street’s earnings and sales expectations and reaffirmed its outlook on Wednesday, even as the company’s sales and traffic across its stores and website declined. Yet the Minneapolis-based retailer pointed toward the future – and its focus on getting back to growth – by naming its next CEO. Chief Operating Officer Michael Fiddelke, who has also served as Target’s CFO, will step into the role on Feb. 1. He will succeed CEO Brian Cornell, 66, who will become executive chair of Target’s board of directors. Fiddelke is a 20-year Target veteran.
Target reiterated its full-year forecast, which it had cut back in May. Target said it expects a low single-digit percentage decline in sales and adjusted earnings per share, excluding gains from litigation settlements, to be about $7 to $9. Earnings per share were $2.05 vs. $2.03 expected and revenue was $25.21 billion vs. $24.93 billion expected. Target’s latest quarter reflected its ongoing struggles. Its net income fell to $935 million from $1.19 billion in the year-ago quarter. Revenue declined from $25.45 billion in the prior-year period. Comparable sales decreased by 1.9% year over year. That metric, also known as same-store sales, includes sales on its website and stores open at least 13 months.
TJX Beats Earnings Expectations, Raises Full-Year Guidance Despite Tariff Pressure
TJX Cos. beat Wall Street’s fiscal second-quarter expectations on the top and bottom lines and raised its full-year guidance. The discounter behind T.J. Maxx, Marshalls and HomeGoods said it assumes it can offset significant pressure from tariffs throughout the year. Analysts have said off-price retailers such as T.J. Maxx are better positioned to sidestep major impacts from tariffs in the near term. 2026 second quarter earnings per share were $1.10 vs. $1.01 expected and revenue was $14.40 billion vs. $14.13 billion expected. TJX executives had said in May that the second quarter would include a negative impact from tariff costs from orders it had already committed to when additional duties were announced.
The company’s net income for the three-month period that ended Aug. 2 was $1.24 billion, or $1.10 per share, up from $1.1 billion, or 96 cents per share, a year earlier. Net sales came in at $14.40 billion, up 7% from $13.47 billion in the year-ago period. TJX now expects full-year fiscal 2026 earnings will be between $4.52 and $4.57 per share, up from its prior guidance between $4.34 and $4.43 per share. The retailer also raised its comparable sales expectations to a 3% increase, versus prior guidance of a 2% to 3% rise. The new guidance assumes the U.S. tariff rates currently in place will remain in effect for the rest of the year.
Intel In Talks With US, Other Large Investors For Equity Boost At Discount, Sources Say
Intel is in talks with other large investors to receive an equity infusion at a discounted price, people familiar with the matter said. Intel stock slid more than 7% on Tuesday, after rallying earlier this week on a $2 billion capital injection from SoftBank and reports that the Trump administration is weighing different ways to get involved with the company. Commerce Secretary Howard Lutnick told CNBC on Tuesday that the U.S. government must receive an equity stake in Intel in exchange for CHIPS Act funds. Sources also said that the chipmaker is now looking beyond SoftBank for an equity boost.
Intel is attempting a turnaround after suffering from years of declining sales and shrinking market share. The company has struggled to capitalize on the artificial intelligence boom in advanced semiconductors and has spent heavily to stand up a manufacturing business that’s yet to secure a significant customer.
Rivian Moving Forward On $5B Georgia EV Plant
Rivian will host two special events next month to mark the restart of construction of its $5 billion Georgia electric vehicle factory. A community event is set for Sept. 14, which will be followed by a formal kickoff ceremony on Sept. 16 “in celebration of our strong partnership with Georgia and the planned resumption of construction in 2026,” the spokesperson said. The kickoff will be attended by stakeholders and government officials including Georgia Gov. Brian Kemp. The plant near Social Circle is expected to start production in 2028 with an annual capacity of about 200,000 units.
In March 2024, Rivian announced it was stopping construction to save money, deciding instead to move production of its upcoming R2 SUV to its plant in Normal, Illinois, to expedite sales. Rivian was able to get the project back on track after it won final approval for a $6.6 billion Department of Energy loan, in January. However, Rivian cannot access the funds—which are available through September 2028—until it resumes work on the Georgia factory.
Robotics Startup FieldAI Raises $314 Million In New Funding, Sources Say
FieldAI, which develops systems for robots to operate safely in industrial environments, has raised $314 million in a new funding round, quadrupling its valuation, sources with knowledge of the matter said. The Irvine, California-based startup is now valued at $2 billion, up from $500 million in a round last year, they added. The startup, founded in 2023, has gained attention as it focuses on software that can be installed on a wide range of hardware, allowing it and its clients to use the most cost-effective robots which accelerates deployment. That contrasts with vertically integrated companies that build their hardware and software, such as Figure AI.
FieldAI's current focus is on enabling robots to perform monitoring and surveying tasks in "dirty, dull, dangerous" environments, with a long-term goal of expanding into more complex, action-based capabilities. CEO Ali Agha, a former robotics technologist at NASA, said in an interview that the financing will help the company expand its team from about 30 people at the end of 2024 to nearly 100 to support multi-million-dollar contracts in the U.S., Europe and Asia.