Category: Business Wires

DUBAI, United Arab Emirates — U.S. President Donald Trump said Iran wants to negotiate with Washington after his threat to strike the Islamic Republic over its crackdown on protesters in nationwide demonstrations that activists said Monday had left at least 646 people dead.

Iran had no direct reaction to Trump’s comments, which came after the foreign minister of Oman — long an interlocutor between Washington and Tehran — traveled to Iran this weekend. It also remains unclear just what Iran could promise, particularly as Trump has set strict demands over its nuclear program and its ballistic missile arsenal, which Tehran insists is crucial for its national defense.

Iranian Foreign Minister Abbas Araghchi, speaking to foreign diplomats in Tehran, insisted “the situation has come under total control” in remarks that blamed Israel and the U.S. for the violence, without offering evidence.

“That’s why the demonstrations turned violent and bloody, to give an excuse to the American president to intervene,” Araghchi said, in comments carried by Al Jazeera. The Qatar-funded network has been allowed to report live from inside Iran, despite the internet being shut off.

However, Araghchi said Iran was “open to diplomacy.” Iranian Foreign Ministry spokesperson Esmail Baghaei said that a channel to the U.S. remained open, but talks needed to be “based on the acceptance of mutual interests and concerns, not a negotiation that is one-sided, unilateral, and based on dictation.”

Meanwhile, pro-government demonstrators flooded the streets on Monday in support of the theocracy, a show of force after days of protests directly challenging the rule of 86-year-old Supreme Leader Ayatollah Ali Khamenei. Iranian state television aired chants from the crowd, which appeared to number in the tens of thousands, who shouted “Death to America!” and “Death to Israel!”

Others cried out: “Death to the enemies of God!” Iran’s attorney general has warned that anyone taking part in protests will be considered an “enemy of God,” a death-penalty charge.

On Monday, the U.S. State Department and the U.S. Virtual Embassy Iran issued an urgent warning to U.S. citizens in Iran to “leave now,” citing the surge in violence and communications blackout.

Trump acknowledges proposal for talks

Trump and his national security team have been weighing a range of potential responses against Iran, including cyberattacks and direct strikes by the U.S. or Israel, according to two people familiar with internal White House discussions who weren’t authorized to comment publicly and spoke on condition of anonymity.

“The military is looking at it, and we’re looking at some very strong options,” Trump told reporters on Air Force One on Sunday night. Asked about Iran’s threats of retaliation, he said: “If they do that, we will hit them at levels that they’ve never been hit before.”

Meanwhile, Trump announced Monday that countries doing business with Iran will face 25% tariffs from the United States. Trump announced the tariffs in a social media posting, saying they would be “effective immediately.”

It was the first direct action from the president, who believes exacting tariffs can be a useful tool in prodding friends and foes on the global stage to bend to his will.

Brazil, China, Turkey, the United Arab Emirates, and Russia are among economies that do business with Tehran.

The White House did not immediately offer any further details on the new tariffs.

Trump said that his administration was in talks to set up a meeting with Tehran, but cautioned that he may have to act first as reports of the death toll in Iran mount and the government continues to arrest protesters.

“I think they’re tired of being beat up by the United States,” Trump said. “Iran wants to negotiate.”

Iran, through the country’s parliamentary speaker, warned Sunday that the U.S. military and Israel would be “legitimate targets” if Washington uses force to protect demonstrators.

More than 10,700 people also have been detained over the two weeks of protests, said the U.S.-based Human Rights Activists News Agency, which has been accurate in previous unrest in recent years and gave the latest death toll early Tuesday. It relies on supporters in Iran crosschecking information. It said 512 of the dead were protesters and 134 were security force members.

With the internet down in Iran and phone lines cut off, gauging the demonstrations from abroad has grown more difficult. The Associated Press has been unable to independently assess the toll. Iran’s government hasn’t offered overall casualty figures.

Those abroad fear the information blackout is emboldening hard-liners within Iran’s security services to launch a violent crackdown. Protesters flooded Tehran’s streets on Saturday night into Sunday morning. Online videos purported to show more demonstrations Sunday night into Monday, with a Tehran official acknowledging them in state media.

At 2 p.m. Monday, Iranian state television showed images of demonstrators thronging Tehran toward Enghelab Square, or “Islamic Revolution” Square, in the capital. It had been airing statements all morning from Iranian government, security, and religious leaders to attend the demonstration.

It called the rally an “Iranian uprising against American-Zionist terrorism,” without addressing the underlying anger in the country over the nation’s ailing economy. State television aired images of such demonstrations around the country, trying to signal it had overcome the protests.

Fear pervades Iran’s capital

In Tehran, a witness told the AP that the streets were empty at the sunset call to prayers each night. By the Isha, or nighttime prayer, the streets are deserted.

Part of that stems from the fear of getting caught in the crackdown. Police sent the public a text message that warned: “Given the presence of terrorist groups and armed individuals in some gatherings last night and their plans to cause death, and the firm decision to not tolerate any appeasement and to deal decisively with the rioters, families are strongly advised to take care of their youth and teenagers.”

Another text, which claimed to come from the intelligence arm of the paramilitary Revolutionary Guard, also directly warned people not to take part in demonstrations.

The witness spoke on condition of anonymity due to the ongoing crackdown.

The demonstrations began Dec. 28 over the collapse of the Iranian rial currency, which trades at more than 1.4 million to $1, as iran’s economy is squeezed by international sanctions in part levied over its nuclear program. The protests intensified and grew into calls directly challenging Iran’s theocracy.

Video shows corpses outside capital

Meanwhile, video circulating online purports to show dozens of bodies in a morgue on the outskirts of Iran’s capital.

People with knowledge of the facility and the U.S.-based Human Rights Activists News Agency said Monday that the video shows the Kahrizak Forensic Medicine Center.

In the footage, people are seen walking by dozens of bodies in bags laid out in a large room, attempting to identify those there. In some cases, bodies can be seen lying outside on blue tarps. A large truck can be seen in part of the footage.

WASHINGTON — The Justice Department has threatened the Federal Reserve with a criminal indictment over the testimony of Fed Chair Jerome Powell this summer regarding its building renovations, Powell said over the weekend.

It is a major escalation by the administration after repeated attempts by President Donald Trump to exert greater control over the independent institution.

Trump has repeatedly attacked Powell for not cutting its short-term interest rate, and even threatened to fire him. Powell’s caution has infuriated Trump, who has demanded the Fed cut borrowing costs to spur the economy and reduce the interest rates the federal government pays on its debt. That anger has not subsided even after the Fed cut interest rates in three of the final four months of 2025.

Trump has also accused Powell of mismanaging the U.S. central bank’s $2.5 billion building renovation project. In a sharp departure from his previous responses to attacks by Trump, Powell described the threat of criminal charges as simple “pretexts” to undermine the Fed’s independence when it comes to setting interest rates.

Trump is already seeking to fire Federal Reserve Governor Lisa Cook over unproven allegations that she committed mortgage fraud. The allegation was made over the summer by Bill Pulte, a Trump appointee to the Federal Housing Administration.

Here are some reasons why the independence of the U.S. Federal Reserve is guarded so closely.

Why the Fed’s independence matters

The Fed wields extensive power over the U.S. economy. By cutting the short-term interest rate it controls — which it typically does when the economy falters — the Fed can make borrowing cheaper and encourage more spending, accelerating growth and hiring. When it raises the rate — which it does to cool the economy and combat inflation — it can weaken the economy and cause job losses.

Economists have long preferred independent central banks because they can more easily take unpopular steps to fight inflation, such as raise interest rates, which makes borrowing to buy a home, car, or appliances more expensive.

The importance of an independent Fed was cemented for most economists after the extended inflation spike of the 1970s and early 1980s. Former Fed Chair Arthur Burns has been widely blamed for allowing the painful inflation of that era to accelerate by succumbing to pressure from President Richard Nixon to keep rates low heading into the 1972 election. Nixon feared higher rates would cost him the election, which he won in a landslide.

Paul Volcker was eventually appointed chair of the Fed in 1979 by President Jimmy Carter, and he pushed the Fed’s short-term rate to the stunningly high level of nearly 20%. (It is currently 3.6%, the lowest it has been in nearly three years.) The eye-popping rates triggered a sharp recession, pushed unemployment to nearly 11%, and spurred widespread protests.

Yet Volcker didn’t flinch. By the mid-1980s, inflation had fallen back into the low single digits. Volcker’s willingness to inflict pain on the economy to throttle inflation is seen by most economists as a key example of the value of an independent Fed.

Investors are watching closely

An effort to fire Powell would almost certainly cause stock prices to fall and bond yields to spike higher, pushing up interest rates on government debt and raising borrowing costs for mortgages, auto loans, and credit card debt. The interest rate on the 10-year Treasury is a benchmark for mortgage rates.

All major U.S. markets slid Monday at the opening bell, bond yields edged higher, and the value of the U.S dollar declined.

Most investors prefer an independent Fed, partly because it typically manages inflation better without being influenced by politics, but also because its decisions are more predictable. Fed officials often publicly discuss how they would alter interest rate policies if economic conditions changed.

If the Fed was more swayed by politics, it would be harder for financial markets to anticipate — or understand — its decisions.

While the Fed controls a short-term rate, financial markets determine longer-term borrowing costs for mortgages and other loans. And if investors worry that inflation will stay high, they will demand higher yields on government bonds, pushing up borrowing costs across the economy.

In Turkey, for example, President Recep Tayyip Erdogan forced the central bank to keep interest rates low in the early 2020s, even as inflation spiked to 85%. In 2023, Erdogan allowed the central bank more independence, which has helped bring down inflation, but short-term interest rates rose to 50% to fight inflation, and remain high.

Fed’s independence doesn’t mean it’s unaccountable

Fed chairs like Powell are appointed by the president to serve four-year terms and have to be confirmed by the Senate. The president also appoints the six other members of the Fed’s governing board, who can serve staggered terms of up to 14 years.

Those appointments can allow a president over time to significantly alter the Fed’s policies. Former President Joe Biden appointed four of the current seven members: Powell, Cook, Philip Jefferson, and Michael Barr. A fifth Biden appointee, Adriana Kugler, stepped down unexpectedly on Aug. 1, about five months before the end of her term. Trump has already nominated his top economist, Stephen Miran, as a potential replacement, though he will require Senate approval. Cook’s term ends in 2038, so forcing her out would allow Trump to appoint a loyalist sooner.

Trump will be able to replace Powell as Fed chair in May, when Powell’s term expires. Yet 12 members of the Fed’s interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the chair doesn’t guarantee that Fed policy will shift the way Trump wants.

Congress, meanwhile, can set the Fed’s goals through legislation. In 1977, for example, Congress gave the Fed a “dual mandate” to keep prices stable and seek maximum employment. The Fed defines stable prices as inflation at 2%.

The 1977 law also requires the Fed chair to testify before the House and Senate twice every year about the economy and interest rate policy.

Could Trump fire Powell before his term ends?

The Supreme Court last year suggested in a ruling on other independent agencies that a president can’t fire the chair of the Fed just because he doesn’t like the chair’s policy choices. But he may be able to remove him “for cause,” typically interpreted to mean some kind of wrongdoing or negligence.

It’s a likely reason the Trump administration has zeroed in on the building renovation, in hopes it could provide a “for cause” pretext. Still, Powell would likely fight any attempt to remove him, and the case could wind up at the Supreme Court.

WASHINGTON — The Trump administration’s criminal investigation of Federal Reserve Chair Jerome Powell appeared on Monday to be emboldening defenders of the U.S. central bank against the efforts of President Donald Trump to control the Fed.

The backlash reflected the bigger stakes of a contest about the fate of the Fed’s independence, the balance of power within the federal government, and the path of the U.S. economy. Trump has long publicly lashed out against Powell for not slashing the Fed’s benchmark interest rates to his liking, but the prospect of a criminal indictment was a step too far for an institution that has an outsized influence on both inflation and the job market.

Several Republican senators have condemned the Department of Justice’s subpoenas of the Fed, which Powell revealed Sunday and characterized as “pretexts” to pressure him to sharply cut interest rates as Trump has demanded. Powell also said the Justice Department has threatened criminal indictments over his June testimony to Congress about the cost and design elements of a building renovation.

Republican Sen. Dave McCormick of Pennsylvania objects to the Justice Department’s investigation of Powell.

“I think the Federal Reserve renovation may well have wasted taxpayer dollars, but the proper place to fix this is through Congressional oversight,” McCormick said in a statement.

He said he believes strongly in an independent Fed, and he also agrees with Trump that Powell “has been slow to cut interest rates.”

But, he said, “I do not think Chairman Powell is guilty of criminal activity.”

Trump has repeatedly used investigations — which might or might not lead to an actual indictment — to attack his political rivals, including Fed governor Lisa Cook, New York Attorney General Letitia James, and James Comey, the former FBI director.

White House press secretary Karoline Leavitt told reporters that Trump did not direct his Justice Department to investigate Powell.

“One thing for sure, the president’s made it quite clear, is Jerome Powell is bad at his job,” Leavitt said. ”As for whether or not Jerome Powell is a criminal, that’s an answer the Department of Justice is going to have to find out.”

A bipartisan group of former Fed chairs and top economists on Monday compared the Trump administration’s actions to moves made in more impoverished countries. Some analysts said that the financial market’s muted response reflects a widespread belief that Powell could successfully fend off the allegations that his description to lawmakers of the Fed’s $2.5 billion project was criminal.

“I think this is ham-handed, counterproductive, and going to set back the president’s cause,” said Jason Furman, an economist at Harvard and former top adviser to President Barack Obama. It could also unify the Fed’s interest-rate setting committee in support of Powell, and it means “the next Fed chair will be under more pressure to prove their independence.”

The subpoenas apply to the price tag of renovating Fed buildings, including its marble-clad headquarters in Washington, D.C. They come at an unusual moment when Trump was teasing the likelihood of announcing his nominee this month to succeed Powell as the Fed chair, after Trump last summer played down the idea that the Fed’s renovation costs were a fireable offense.

While Powell’s term as chairperson ends in May, he has a separate term as a Fed governor until January 2028. Trump’s moves could make it more likely that Powell will stay on the Fed’s governing board after his term as chairperson ends in May in order to defend the Fed’s independence from politics in making its decisions on interest rates, Furman said.

While an interest-rate cut was already considered unlikely at the Fed’s next meeting in about two weeks, the news of the Justice Department investigation likely means that the Fed would avoid cuts at the next meeting in order to send the message that it cannot be pressured by politics, economists said.

Powell quickly found a growing number of defenders among Republicans in the Senate, who will have the choice of whether to confirm Trump’s planned picks for Fed chair.

Sen. Thom Tillis, a North Carolina Republican and member of the Senate Banking panel, said late Sunday in response to the subpoenas that he would oppose any of the Trump administration’s nominees for the Fed, including to replace Powell.

“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 said.

Sen. Lisa Murkowski, an Alaska Republican, backed Tillis’ approach Monday.

“After speaking with Chair Powell this morning, it’s clear the administration’s investigation is nothing more than an attempt at coercion,” Murkowski said. She voted against the White House’s nomination of Stephen Miran to the Fed’s board in September, which was barely approved by a 48-47 vote. Miran continues to be Trump’s chairperson of the White House Council of Economic Advisers, although he is on leave due to his post at the Fed.

Trump has for the past year sought to pressure Powell into having the Fed slash its benchmark interest rates — a move that reflects a fundamental break over whether inflation still poses any risk to the U.S. economy.

Powell maintains that inflation is still elevated in the aftermath of Trump’s tariffs and has moved cautiously, whereas Trump claims that inflation is no longer a worry and rates should be dramatically slashed.

“I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment,” Powell said in a Sunday night video disclosing the subpoenas. “Public service sometimes requires standing firm in the face of threats.”

If Powell stays on the board after his term as chair ends in May, the Trump administration would be deprived of the chance to fill another seat on the board.

Powell has declined at several news conferences to answer questions about his plans.

Asked on Monday by reporters if Powell planned to remain a Fed governor, Kevin Hassett, director of the White House National Economic Council and a leading candidate to become Fed chair, said he was unaware of Powell’s plans.

“I’ve not talked to Jay about that,” Hassett said.

Powell, jettisoning the cautious approach he has taken since Trump began attacking him last year for not cutting rates sharply enough, said on Sunday the subpoenas were a “pretext” to force the Fed to cut its key short-term interest rate.

Sen. Kevin Cramer, a Republican from North Dakota and a frequent Powell critic, said Monday that he does not think that the Fed chair is “a criminal” and said he hopes that “this criminal investigation can be put to rest quickly,” according to CNBC.

The bipartisan group of former Fed chairs and top economists said in their Monday letter that the White House’s legal actions and the possible loss of Fed independence could hurt the broader economy.

“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly,” the statement said. “It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.”

The statement was signed by former Fed chairs Ben Bernanke, Janet Yellen, and Alan Greenspan, as well as former Treasury Secretaries Henry Paulson and Robert Rubin.

Still, Trump’s pressure campaign had been building for some time. The president relentlessly criticized and belittled Powell, attempting to blame him for some of the discontent over the economy that followed the president’s own tariff announcements.

Trump appeared to preview the shocking news of the subpoenas at a Dec. 29 news conference. The president said his administration would “probably” sue Powell for “gross incompetence” on the cost of renovations, calling it the “highest price of construction per square foot in the history of the world.”

“He’s just a very incompetent man,” Trump said. “But we’re going to probably bring a lawsuit against him.”