US News
LAST UPDATE: May 28, 2025
Kashkari Favors Maintaining Fed Rates Until More Tariff Clarity
Federal Reserve Bank of Minneapolis President Neel Kashkari advocates for maintaining current interest rates until there is greater clarity on the impact of tariffs, citing concerns over prolonged inflationary pressures.
Insight
Kashkari’s stance underscores the uncertainty facing monetary policymakers amid ongoing trade disputes. Holding rates steady allows the Fed to assess the long-term effects of tariffs on inflation and economic growth. This cautious approach aims to preserve economic stability while avoiding premature policy shifts that could exacerbate volatility.
Student Loan Crisis Creates Challenges For the Economy
The resumption of student loan payments has led to a significant rise in delinquencies, with approximately 5.6 million borrowers newly delinquent in early 2025, potentially reducing GDP by $1–$3 billion monthly.
Insight
The end of pandemic-era forbearance has exposed the financial vulnerability of many borrowers, particularly those from lower-income backgrounds and attendees of for-profit institutions. The resulting credit score declines and increased delinquencies may hinder consumer spending and access to credit, posing risks to economic growth. Policymakers may need to consider targeted relief measures to mitigate these effects.
Trump Threatens to Redistribute $3 Billion in Harvard Grants to Trade Schools
President Trump is considering reallocating $3 billion in federal grants from Harvard University to trade schools, citing allegations of antisemitism and non-compliance with federal demands.
Insight
This move reflects the administration’s broader campaign against elite institutions perceived as promoting “woke” ideologies. Redirecting funds to vocational education aligns with efforts to bolster workforce development. However, it raises concerns about academic freedom and the politicization of federal funding decisions.