Trump’s Fed Visit Was Comedy Gold. Why Powell’s Future Is No Laughing Matter.

President Donald Trump points to a cost sheet as he speaks with Federal Reserve chair Jerome Powell (R) as he visits the Federal Reserve in Washington, DC. (ANDREW CABALLERO-REYNOLDS/AFP via Getty Images)

They make an unlikely comedy double act. But it was hard not to smile when President Donald Trump visited the site of the Fed’s new building with Federal Reserve Chair Jerome Powell Thursday. Ahead of next week’s Fed interest-rate decision, the pair wore hard hats and quibbled over the figures of the construction costs in unintentional deadpan delivery.

Trump reiterated that he wants lower interest rates and said he might dismiss Powell if building overruns get worse. But he stopped short of using the catchphrase “you’re fired” from the Apprentice TV series he once fronted.

The exchange tells you all you need to know about how serious Trump is about actually getting rid of Powell. To be clear, despite the legal arguments against it, Trump could still push to dismiss Powell at any time if he wanted to.

But following through would backfire. Sure, short-term interest rates would likely go down sooner than otherwise, and probably give stocks a sugar rush. Yet fears about the Fed’s future under the thumb of the White House would stoke worries about longer-term inflation. That would likely push up bond yields with longer maturities, and those are the rates that mortgages are tied to.

The thing is, there’s already a reasonable case for a rate cut as soon as next week on concerns that the economy is weakening, and Fed Gov. Christopher Waller has been making it. But he’ll have to convince enough Fed voters to make it happen, and that looks unlikely.

In the meantime, companies are learning to cope with Trump’s tariffs. Earnings from Boston Beer, the owner of Sam Adams, and Deckers Outdoor, the maker of Ugg boots, suggest the impact of the taxes is not as bad as expected so far.

Americans’ perception of the economy is also improving, which is good for Trump. It suits him to have a straight man in Powell standing by to take the blame if the economy really does start to bomb.

— Brian Swint

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Trump Pressures Powell During Visit to Fed Renovation Project

President Donald Trump toured the Federal Reserve’s renovations in a rare visit reminiscent of late night sketch comedy, complete with a photo-op of the commander in chief and Chair Jerome Powell standing next to each other in white hard hats. It gave Trump another chance to dig at Powell over interest rates.

• The visit was ostensibly to examine the now-controversial $2.5 billion renovation, which Trump criticized for the cameras. Asked by a reporter what Powell could say to get him to back off, Trump laughed and said, “Well I’d love him to lower interest rates. Other than that, what can I tell him.”
• Presidents aren’t typically concerned with construction cost overruns that equate to about a week’s worth of Treasury auctions. And presidents don’t typically visit the central bank. This is the fourth visit by a sitting president since 1937. After the tour, Trump said firing Powell wasn’t necessary.
• Trump’s critiques add another challenge to Powell’s job, which ends next May. The Fed chair wants to see where Trump’s tariff rates ultimately land and how they will affect prices before committing to rate cuts. The Fed meets again next week.
• Once the tour was over, Trump took to his social media account to hammer home his message that he wants to see an interest-rate cut. As for the Fed’s building renovations: “It’s got a long way to go, would have been much better if it were never started, but it is what it is.”

What’s Next: Markets don’t see cuts in the near term. The futures market sees the probability of a reduction at the Fed’s meeting next Tuesday and Wednesday at around 2.5%. The probability of a cut in September is around 60%, the CME FedWatch tool says.

— Liz Moyer, Joe Light, and Martin Baccardax

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Intel Offers Rosy Outlook and Sees Capital Spending Falling

Intel offered a better-than-expected third quarter revenue outlook and outlined the dramatic steps it has taken to revive its performance, including cutting 15% of its workforce and gutting plans to build new chip facilities in Europe. Instead it is refocusing on artificial-intelligence chips and personal-computer processors.

• The chip maker said it has completed a majority of the layoffs for the plan it announced last quarter. Intel expects to end the year at 75,000 employees through a combination of job cuts and attrition —down from 96,400 at the end of the second quarter.
• For the June quarter, Intel reported revenue of $12.9 billion and a loss of 10 cents a share. Current quarter guidance was robust. Intel forecast revenue of $12.6 billion to $13.6 billion. CEO Lip-Bu Tan said they are laser focused on strengthening their core products.
• CFO David Zinsner told Barron’s the June quarter results benefited from smaller-than-feared tariffs and a better-than-expected economic environment. There’s still tariff uncertainty, but Intel’s capex spending should be down next year from the $18 billion gross capex level forecast for 2025.
• Tan said the company wouldn’t move forward with planned projects in Germany and Poland, adding Intel would also further slow site construction in Ohio. “Over the past several years, the company invested too much, too soon—without adequate demand,” he wrote.

What’s Next: Tan also said the company’s investment in Intel 14A will be based on confirmed customer commitments. “There are no more blank checks,” he said. Every investment must make economic sense.

—Tae Kim

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Union Pacific Confirms Railroad Megamerger Talks Are On

There’s a good argument that the U.S. would benefit from a coast-to-coast freight railroad, or possibly two such giants. Western line Union Pacific and East Coast operator Norfolk Southern have confirmed they are in “advanced discussions” to do just that, ending days of speculation about a deal.

• There’s no guarantee it will ultimately happen, but consolidation could boost efficiency and profit margins. Union Pacific’s disclosure prompted speculation about a combination of Berkshire Hathaway’s BNSF and CSX.
• Union Pacific CEO Jim Vena has said consolidation could help the rail industry compete against truckers, with faster service, by potentially letting train operators bypass the Chicago interchange—which today adds a day or two to transcontinental rail shipments.
• “Anytime you can remove touch points, it helps service,” Vena said during a conference call about second-quarter earnings. The company reported slightly higher second-quarter revenue and profit, and maintained its full-year outlook, but warned of potential economic challenges in the second half of 2025.
• Only one merger of railroads with more than $1 billion of revenue has happened since 2000: the 2023 purchase of Kansas City Southern by Canadian Pacific. Industry regulator Surface Transportation Board said it had not yet received a formal application for a proposed merger.

What’s Next: Any railroad megamerger would need to demonstrate that efficiencies and service improvements would outweigh disruptions and anticompetitive effects, according to UBS analyst Thomas Wadewitz. The Justice Department, investors, Amtrak, and workers’ unions would also weigh in.

— Bill Alpert, Al Root, and Janet H. Cho

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UnitedHealth Suffers Another Blow as It Confirms DoJ Probe

Healthcare giant UnitedHealth confirmed it received requests from civil and criminal investigators at the Department of Justice and said it’s complying with them. Even so, it was a blow to the stock, which closed down nearly 5% Thursday.

• UnitedHealth has “full confidence in its practices” and is “committed to working cooperatively” with the DOJ, it said in a Form 8-K filed with the Securities and Exchange Commission on Thursday.
• The DOJ is investigating the company’s Medicare billing practices, The Wall Street Journal reported earlier this year, but UnitedHealth hasn’t confirmed that news.
• The company said Thursday it had “proactively reached out to the Department of Justice after reviewing media reports about investigations into certain aspects of the Company’s participation in the Medicare program.”
• Although a decadelong lawsuit is ongoing, based on allegations that UnitedHealth violated the False Claims Act through improper risk adjustment, a court-appointed special master recommended the judge dismiss the case in March.

What’s Next: The next hearing is scheduled for September and the final outcome in that case, particularly a dismissal, could serve as a catalyst for shares, according to Mizuho analyst Ann Hynes. It could also set a further precedent for future Medicare Advantage risk adjustment cases given the lack of previous case law on the topic.

— Mackenzie Tatananni and Elsa Ohlen

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American Eagle Bets on Sydney Sweeney to Sell More Jeans

Like many retailers, American Eagle Outfitters has been maneuvering for the critical back-to-school shopping season. The teen fashion retailer is bringing in Gen Z actress Sydney Sweeney as it aims to revive its slumping sales and profit by appealing to younger and budget-conscious consumers.

• Sweeney, the star of HBO’s Euphoria and The White Lotus, anchors a media blitz that includes a 3-D billboard in Times Square, a 360-degree video at the Las Vegas Sphere, and media buys on the social-media platforms Snapchat and BeReal. The campaign highlights the retailer’s denim line.
• Sweeney is also the face of Crocs’ HeyDude footwear brand. And Dr. Squatch’s limited-edition soap made with Sweeney’s bath water sold out within minutes. Unilever is buying Dr. Squatch for an undisclosed sum, and praised its success with influencers and celebrities for helping drive sales.
• It’s a critical time for American Eagle, which faces a potential $40 million annual impact from tariffs on goods from China and is diversifying its supply chain away from manufacturing there. It reported a $68 million first-quarter operating loss and forecast revenue to fall 5% in the second quarter.
• Even luxury retailers are grappling with sales weakness. LVMH Moët Hennessy Louis Vuitton’s second-quarter revenue fell 4% and missed expectations for the second consecutive quarter. Fashion and leather goods sales declined and tourist spending weakened in the first half of 2025 compared with a year ago.

What’s Next: American Eagle’s campaign includes a limited-edition denim jacket and jeans inspired by Sweeney, in addition to over 800 new fall styles, the company said.

— Nate Wolf, Sabrina Escobar, and Janet H. Cho

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Do you remember this week’s news? Take our quiz below to test your knowledge. Tell us how you did in an email to thebarronsdaily@barrons.com.

1. President Donald Trump’s Aug. 1 deadline for making trade deals is quickly approaching but there has been some movement. This week, the administration announced revised terms with Japan. Which of the following was NOT included in the latest deal?

a. Tariff rate of 15% on Japanese goods imported into the U.S.
b. Japan’s pledge to invest $550 billion in the U.S.
c. U.S. would maintain higher tariff on imported Japanese cars
d. Japan would accept U.S. agricultural products into its markets, including rice.

2. Coming off another stellar earnings report, shares of Taiwan Semiconductor Manufacturing soared and stretched the chip maker’s market value above which of the following thresholds?

a. $900 billion
b. $1 trillion
c. $1.5 trillion
d. $2 trillion

3. Meme stocks are back in the headlines this week as retail investors bid up shares in companies that have been struggling with shifting market forces. Which of the following are the latest to gain status as meme stocks?

a. Opendoor Technologies
b. Kohl’s
c. Krispy Kreme
d. All of the above

4. The S&P 500 continues to set records, but history suggests it isn’t done for the year. Going back to 1980, DataTrek found that the index hit its peak for the year most often in which of the following months?

a. December
b. November
c. October
d. September

5. Alphabet continues to beat expectations as it spends billions on building out its artificial intelligence capabilities. It has raised its projected capital expenditures for the year to what level?

a. $75 billion
b. $85 billion
c. $95 billion
d. None of the above

Answers: 1(c); 2(b); 3(d); 4(a); 5(b)

— Barron’s staff

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—Newsletter edited by Liz Moyer, Rupert Steiner