Month: September 2025

Lots of news on the Lisa Cook firing today! Apparently she told her Georgia mortgagor that it was a vacation home:

A loan estimate for an Atlanta home purchased by Lisa Cook, the Federal Reserve governor accused of mortgage fraud by the Trump administration, shows that Cook had declared the property as a “vacation home,” according to a document reviewed by Reuters.

The document, dated May 28, 2021, was issued to Cook by her credit union in the weeks before she completed the purchase and shows that she had told the lender that the Atlanta property wouldn’t be her primary residence. The document appears to counter other documentation that Cook’s critics have cited in support of their claims that she committed mortgage fraud by reporting two different homes as her primary residence, two independent real-estate experts said.
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Reuters was unable to determine whether Pulte or administration officials are aware of Cook’s Atlanta loan estimate. Spokespeople at the FHFA, the agency led by Pulte, didn’t respond to a request for comment.

The documents cited by Pulte include standardized federal mortgage paperwork which stipulates that each loan obtained by Cook for the Atlanta and Michigan properties is meant for a “primary residence.” But documentation reviewed by Reuters for the Atlanta home, filed with a court in Georgia’s Fulton County, clearly says the stipulation exists “unless Lender otherwise agrees in writing.” The loan estimate, a document prepared by the credit union, states “Property Use: Vacation Home.”
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In another point that could help Cook’s case, she never requested a tax exemption for the Georgia home as a primary residence, according to property records and a Fulton County tax official.

A separate document reviewed by Reuters, related to a federal form completed by Cook as she obtained security clearance for her role at the Federal Reserve, shows that in December 2021 she also declared the Atlanta property as a “2nd home.” Though unrelated to the mortgage, the declaration on that document, a supplement to a U.S. government national security form known as SF-86, is consistent with the claim on her Atlanta loan summary.

Well, of course Pulte and the rest of the Trump administration weren’t aware of the document. They just used their standard technique of taking things out of context and proceeding without the slightest attempt at due process … and by due process, I mean internal checking for flaws before racing off to court, not just the court action itself. The entire administration is chock-full of incompetent scum; we knew that already.

It didn’t stop them from solemnly presenting their case:

The Trump administration on Sunday renewed its request to a federal appeals court to fire Lisa Cook, a Federal Reserve governor who has faced political scrutiny in recent weeks.
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The Trump administration called Cook’s claims to stay on the board “meritless,” adding that concerns over whether Cook misrepresented her finances pose concerns as to “whether Cook can be trusted to act with forthrightness, care, and disinterest in managing the U.S. money supply.”

The next story is that she seems to have done everything right in Michigan, too:

The property tax authority in Ann Arbor, Mich., says Federal Reserve Governor Lisa Cook hasn’t broken rules for tax breaks on a home there that Cook declared her primary residence.

The finding, which came in response to a Reuters request that the city review Cook’s property records, could boost Cook’s defense against efforts by the Trump administration to remove her from the Federal Reserve board.

Ann Arbor has “no reason to believe” that Cook violated property tax rules, City Assessor Jerry Markey told Reuters. Cook has at times lived elsewhere and city records indicate she sought permission from Ann Arbor authorities to rent out the Michigan home on a short-term basis.
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Since securing a mortgage for the Michigan home in 2021, local property records show she got approval from the city to rent it out on a short-term basis in October, 2022, and again in April, 2024. Some cities, like Ann Arbor, require home owners to obtain a license to rent out their home, even on a short-term basis.

In April of 2025, months before Pulte began publicly accusing her of fraud, Cook sought approval to list the home as a long-term rental, according to local records and city officials. In July, she told the city she had enlisted a rental firm to manage the property, the officials said.

Cook now has until the end of the year to revoke the tax exemption on the home, said Markey, the Ann Arbor city assessor.
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The rates on Cook’s two mortgages show Cook didn’t enjoy discounts compared with prevailing rates available to borrowers when she negotiated the loans in 2021.

Her rate on the 15-year loan on the Michigan property was 2.875 per cent, versus a prevailing national rate in that period ranging from 2.23 per cent to 2.45 per cent, according to Freddie Mac data. And her rate on the 30-year loan on her Atlanta property was 3.25 per cent, versus a prevailing rate at the time ranging from 2.93 per cent to 3.04 per cent.

And so, not surprisingly:

President Donald Trump cannot remove Lisa Cook from the Federal Reserve’s Board of Governors for now, a federal appeals court said in an emergency ruling Monday, hours before the central bank’s two-day monetary policy meeting kicks off.
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“In this court, the government does not dispute that it failed to provide Cook even minimal process—that is, notice of the allegation against her and a meaningful opportunity to respond—before she was purportedly removed,” Judges Bradley Garcia and Michelle Childs wrote in their opinion.

“The district court issued its preliminary injunction after finding that Cook is likely to succeed on two of her claims: her substantive, statutory claim that she was removed without ‘cause’… and her procedural claim that she did not receive sufficient process prior to her removal in violation of the Due Process Clause of the Fifth Amendment,” Garcia and Childs wrote.

In his dissenting opinion, Judge Gregory Katsas wrote that “President Trump removed Cook for cause.”

But fear not, Trump fans! He managed to get his … stooge? muse? … confirmed as a Fed Governor:

Stephen Miran, one of President Donald Trump’s top economic advisers, on Monday was confirmed by the Senate to serve on the Federal Reserve’s powerful Board of Governors, hours before the Fed’s two day monetary policy meeting begins.

The Senate voted 48-47 to confirm Miran. Sen. Lisa Murkowski of Alaska was the only Republican to vote against Miran’s confirmation.

Once sworn in as a Fed governor, Miran will immediately be one of 12 officials voting on interest rate decisions.

TD Bank announced a new LRCN today:

The Toronto-Dominion Bank (“TD”) (TSX: TD) (NYSE: TD) today announced the pricing of a U.S. public offering of US$750 million 6.350% Fixed Rate Reset Limited Recourse Capital Notes, Series 6 (Non-Viability Contingent Capital (NVCC)) (the “LRCNs”). The LRCNs will be registered with the U.S. Securities and Exchange Commission (the “SEC”).

The LRCNs will bear interest at a rate of 6.350 per cent annually, payable quarterly, for the initial period ending on, but excluding, October 31, 2030. Thereafter, the interest rate on the LRCNs will reset every five years at a rate equal to the prevailing U.S. Treasury Rate plus 2.721 per cent. The LRCNs will mature on October 31, 2085. The expected closing date of the offering is September 23, 2025, subject to customary closing conditions.

Concurrently with the issuance of the LRCNs, TD will issue 750,000 Non-Cumulative 6.350% Fixed Rate Reset Preferred Shares, Series 33 (Non-Viability Contingent Capital (NVCC)) (“Preferred Shares Series 33”) to be held by Computershare Trust Company of Canada, as trustee for TD LRCN Limited Recourse Trust™ (the “Limited Recourse Trust”). In case of non-payment of interest on or principal of the LRCNs when due, the recourse of each LRCN holder will be limited to that holder’s proportionate share of the Limited Recourse Trust’s assets, which will consist of Preferred Shares Series 33 except in limited circumstances.

TD may redeem the LRCNs on October 31, 2030, and once every quarter-end thereafter, with the prior written approval of the Superintendent of Financial Institutions (Canada), in whole or in part on not less than 10 days’ and not more than 60 days’ prior notice to the LRCN holders.

I’m fascinated by the quarterly redemption option. How on earth do they get away with that? The Canadian ones don’t have that:

The Toronto-Dominion Bank (“TD”) (TSX: TD) (NYSE: TD) today announced the pricing of a Canadian public offering of C$750 million of 5.909% Non-Viability Contingent Capital (“NVCC”) Additional Tier 1 (“AT1”) Limited Recourse Capital Notes Series 5 (the “LRCNs”).
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With the prior written approval of the Superintendent of Financial Institutions (Canada), TD may redeem the LRCNs commencing on January 1, 2030, and every five years thereafter, during the period from and including January 1 to and including January 31. TD may redeem the LRCNs in whole or in part on not less than 10 days’ and not more than 60 days’ prior notice to the LRCN holders.

I checked one of their other US issues and yes, this appears to be standard (as far as a sample of two issues goes, anyway!):

The Bank may, at its option, with the prior written approval of the Superintendent of Financial Institutions appointed pursuant to the Office of the Superintendent of Financial Institutions Act (Canada) (“OSFI”) (the “Superintendent”), and without the consent of the Noteholders, redeem the Notes in cash, in whole or in part, on not less than 10 days’ and not more than 60 days’ prior written notice to the registered Noteholders, on the Initial Reset Date and each January 31, April 30, July 31 and October 31 thereafter (each, an “Optional Redemption Date”), at a redemption price which is equal to the aggregate of (i) the principal amount of the Notes to be redeemed, and (ii) any accrued and unpaid interest on such Notes up to but excluding the date of redemption (the “Redemption Price”).

US consumer inflation ticked up:

The cost of living continues to increase for Americans at a time when the job market appears to be on shakier footing, creating a complicated economic problem that could be tricky to solve.

Consumer prices rose 0.4% in August, driving the annual inflation rate to 2.9%, the highest since January, according to Bureau of Labor Statistics data released Thursday. The reading marked an acceleration from the 2.7% increase seen in July, with price hikes driving up the cost of Americans’ most basic needs.

Grocery and fuel prices shot higher in August after falling the month before. Food at home prices rose 0.6% — the highest monthly jump in nearly three years — and gas prices climbed by 1.9% after falling 2.2% the month before.
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Paychecks also aren’t going as far as they used to: Real (inflation-adjusted) hourly earnings slowed to 0.7% in August, the lowest gain in more than a year, BLS data shows.

Wholesale inflation in the States is basically flat, but this came at the apparent expense of domestic profit margins:

Producer prices unexpectedly fell 0.1% in August, cooling annual inflation to 2.6% from a downwardly revised 3.1% in July, according to Bureau of Labor Statistics data.

Helping to drive prices lower was a 1.7% drop in trade services, a category reflective of producers, wholesalers and retailers’ profit margins. If margins are shrinking, it could be an indication that businesses are using those to eat higher costs, economists have said.

The trade services category can be highly volatile; however, August’s drop is the biggest monthly decline there in more than a year.

When excluding highly volatile components like trade services, as well as food and energy, the underlying inflation trend appears less rosy: Prices rose 0.3% from July and ticked up to 2.8% for the 12 months ended in August.

Meanwhile, Miran made it through committee en route to the Fed governor nomination:

On Wednesday, Stephen Miran’s nomination to become a Fed governor got the green light in a procedural Senate committee vote Wednesday. Soon, all 50 senators will vote on whether to confirm him — a hurdle Miran is expected to clear in time to join the Fed for its rate-setting meeting next week.
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In written responses to the banking committee, released Tuesday, Miran said that, if confirmed, he won’t commit to resigning when the governor term ends in January if a permanent successor hasn’t been named. When Trump nominated Miran last month, he said it would be a temporary appointment to finish out Kugler’s unexpired term. Miran, currently the chair of the Council of Economic Advisers, reiterated that plan last week during his confirmation hearing.

But Lisa Cook remains in office:

A federal judge late Tuesday blocked President Donald Trump’s unprecedented effort to fire Federal Reserve Governor Lisa Cook.

“President Trump has not identified anything related to Cook’s conduct or job performance as a Board member that would indicate that she is harming the Board or the public interest by executing her duties unfaithfully or ineffectively,” Judge Jia Cobb, an appointee of former President Joe Biden, wrote, as she granted Cook’s request to stop the attempted firing.

The decision comes just weeks after Trump said he fired Cook — the first Fed governor ever to be fired by the president. The administration is expected to appeal Cobb’s preliminary injunction, which ensures the Federal Reserve must keep Cook on as a governor while the legal challenge plays out.

Cobb said on first look Cook’s claim that she was improperly fired is a valid one and that it violated her rights under the Fifth Amendment. At the same time, the judge, who sits on the federal bench in DC, said she believed the issue brings up new legal questions that need to be addressed over the long term.

“President Trump’s actions and Cook’s resulting legal challenge raise many serious questions of first impression that the Court believes will benefit from further briefing on a non-emergency timeline,” Cobb wrote. “However, at this preliminary stage, the Court finds that Cook has made a strong showing that her purported removal was done in violation of the Federal Reserve Act’s ‘for cause’ provision.”
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“The Court finds that permissible cause for removal of a Federal Reserve Governor extends only to concerns about the Board member’s ability to effectively and faithfully execute their statutory duties, in light of events that have occurred while they are in office,” the judge wrote.
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“While admitting that the President cannot remove an official for policy disagreements, the Government claims … a removal on the grounds of a policy disagreement would nevertheless be unreviewable,” Cobb wrote.

“This cannot be the case,” she added. “Such a rule would provide no practical insulation for the members of the Board of Governors. It would mean that the President could, in practice, ‘remove a member … merely because he wanted his own appointees on the’ Board of Governors.”
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If Cook, a Biden appointee, is successfully removed, it would leave only two Fed governors appointed by a Democratic president on the seven-member board.

“We’ll have a majority very shortly,” Trump said during a recent Cabinet meeting. “So, that’ll be great. Once we have a majority, housing is going to swing, and it’s going to be great.”

Wow. Trump is going to be surprised when he finds out that American residential mortgages are priced off the 10-year bond, not policy rates.

And the jobs number statistics operation is being checked:

The Department of Labor is initiating an investigation into how the Bureau of Labor Statistics collects and reports “closely watched economic data,” according to a letter the department’s Assistant Inspector General for Audit, Laura Nicolosi, sent to Acting BLS Commissioner William Wiatrowski on Wednesday.
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While members of the Trump administration said on Tuesday that the annual revisions are a sign that the president inherited a worse economy from former President Joe Biden, they’ve also said that it’s proof that changes need to be made at the BLS to improve the accuracy of data.
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At the same time, BLS officials have, for more than a decade, sounded alarm bells about being too underfunded and too understaffed to implement the necessary practices to modernize data collection, analysis and reporting. In recent months, the agency has cited staffing challenges as the reason for reduced collections on critical inflation data.

In addition to employment data, Nicolosi’s letter specified that her team’s investigation would also focus on “challenges and related mitigating strategies” for two of the BLS’ most closely tracked monthly inflation reports: the Consumer Price Index and the Producer Price Index.

Wait until the Trump administration learns that quality costs money! That’ll be fun.

PerpetualDiscounts now yield 5.63%, equivalent to 7.32% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.87% on 2025-9-9 and the price of the fund increased from 15.22 (2025-9-9) to 15.29 (2025-9-10), or 46bp, with a duration of 12.27 (BMO does not specify what kind of duration; I will assume Modified) implying a yield decrease of 4bp, implying in turn a 2025-9-10 yield of 4.83%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is now 250bp, a sharp widening from the 230bp reported September 3.

The annual revision of the US jobs numbers came with a surprise:

The American jobs market has been running in a much lower gear than previously thought, according to a preliminary report released Tuesday.

The US economy added about 911,000 fewer jobs than initially estimated for the year ending in March, the Bureau of Labor Statistics report suggests. If this were to hold – the final annual benchmark revision will be reported in February 2026 – it would be the largest annual revision to US jobs data on record.

Tuesday’s revisions release is the first step in BLS’ annual benchmark review of jobs data, a process that has taken place in some shape or form going back 90 years.
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The preliminary benchmark revision of -911,000 came in on the high end of economists’ estimates and accounts for about a 0.6% share of overall employment. The annual benchmark revisions during the past 10 years had an absolute average of 0.2% of total nonfarm employment, BLS data shows.

If spread out through the year ended in March, the revision would lower the average monthly job gains by nearly 76,000 positions between April 2024 and March 2025. As it stands now, job growth during that period was 146,500 per month.

If finalized, this downward revision would bring that to about 70,500 per month, BLS data shows.
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Economists said Tuesday that the massive revision was probably attributable in part to the pandemic throwing out of whack the so-called birth-death model, a longstanding statistical tool that’s used to measure business and job creation.

Prior to Tuesday’s release, economists predicted that a large downward revision was likely due to three primary factors: weaker-than-inferred job creation at new firms; sampling errors resulting from declining survey response rates; and, adjustments for asylum-seekers and other undocumented workers.

I haven’t seen any political reaction to this; perhaps because it’s too much of a hot potato!