Markets Unfazed as Trump Escalates Fed Fight

What's Happening

Economy

Markets Unfazed as Trump Escalates Fed Fight

What's going on: The stock market can be as fickle as a toddler who accidentally misses nap time. So when President Donald Trump announced he was firing Lisa Cook from the Federal Reserve’s board of governors, many expected Wall Street to throw a tantrum. Instead, markets shrugged. Stocks barely moved, and the dollar only dipped slightly before recovering. Still, this story is far from over. Cook said she won’t resign and plans to challenge the firing in court: “President Trump purported to fire me ‘for cause’ when no cause exists under the law.”

What it means: The Fed (and the economy) is sailing into uncharted waters. Some investors told Axios that they are excited about the prospect of Republicans steering the central bank and cutting rates faster. Others doubt Trump can legally remove Cook, since no president has ever ousted a Fed governor — a role meant to be insulated from politics. The case could wind up before the Supreme Court — and if the justices side with Trump, it would set a new precedent that reshapes presidential power over the central bank. As for investors, they’re focusing on the bond market. If yields swing sharply, it will be the clearest signal that either the Fed or the White House has taken a wrong turn with the economy.

Related: Markets Are Certain the Fed Will Cut Rates at Its September Meeting (CNBC)

Immigration

Knock, Knock: ICE May Ask Your Neighbor If You Deserve Citizenship

What's going on: For the first time since 1991, the government will reinstate “neighborhood checks” for immigrants applying for US citizenship, according to a memo obtained by CBS News. That means ICE agents can interview neighbors and coworkers of applicants to see if they meet the requirements for naturalization — think of it as a much higher-stakes version of an office peer review. Until now, ICE could skip these checks under a “general waiver,” but the new memo directs officers to weigh applications and decide when in-person investigations are needed. The Trump administration says the change is necessary to combat fraud and fix what it sees as overly generous Democratic-era immigration policies.

What it means: This is part of a broader hardline shift: Refugee admissions are frozen, certain legal pathways for migrants have been shut down, and ICE has stepped up deportations of everyday citizens with no criminal history, including those with families. For decades, citizenship vetting leaned heavily on background and criminal checks, plus the famous civics test — which many people born in the US can’t pass. Now, applicants will also be judged on more subjective measures like moral character, loyalty to the Constitution, and being “well-disposed to the good order and happiness of the United States.” Immigrant advocates warn it could discourage people from applying for citizenship at all.

Related: This Is What It’s Actually Like at Immigration Court (NPR)

Culture

AI Models Are The Next “SkinnyTok”

What's going on: Unattainable beauty standards are a tale as old as time — but now with AI models in the mix, they’re not even real. This month, Vogue featured the first AI-generated model in a print campaign for GUESS, a move one insider called a “kick in the teeth” for an industry that has been fighting for more cultural and body diversity. For all the strides made in body neutrality and positivity, these computer-generated images of perfection send the same old message: real women will never measure up.

What it means: AI models aren’t the only reminder that beauty standards remain unrealistic. Gen Z may love a ‘90s throwback, but some trends, like “heroin chic,” are worth leaving in the past. And yet, Zara recently had to pull ads in the UK with “unhealthily thin” models. Meanwhile, TikTok was forced to ban the “SkinnyTok” hashtag this summer after it became “linked to unhealthy weight loss content.” And in the Ozempic era, there's more pressure than ever to achieve the so-called “skinny” aesthetic. Beauty standards may evolve, but the underlying message doesn’t: Women’s bodies are under constant scrutiny, and AI models are just the newest delivery system for the same old script.

Related: Will Smith Used AI in a Concert Video and It Did Not Go Well (CNet)

Highlight Reel

BY SKIMM SPORTS

The week's sports news and culture stories, ranked.

Hang it in the Louvre: From WWII ballfields to the Little League World Series, Maybelle Blair, 98, and Mo’ne Davis, 25, linked generations at tryouts for the Women’s Professional Baseball League.

This is not a drill: Taylor said yes — but what does it mean for Travis on the field? Find out on our emergency Well Played episode.

Winning: Angel City’s Alyssa Thompson found a way to score despite all of these defenders standing in her way. Nothing but net. 

Double fault: Carlos Alcaraz’s new haircut created a lot of buzz at the US Open. Safe to say not everyone is a fan.

Settle This

Mark Zuckerberg has been feuding with his neighbors over construction noise from his sprawling home complex. What peace offering did he make, according to The New York Times?

Game Time

Looking for a crossword that’s not impossible to solve? You’re in luck. This one even offers hints when you get stuck. The faster you finish, the better your score — and the more impressed the group chat will be. Go on.