Despite continued threats of tariffs, the U.S. soared in the third quarter of 2025, reaching record highs and rising about eight percent for the period and up 35 percent since its low in April. These record returns have, once again, been achieved in large part by artificial intelligence companies and tech in general.
Despite headwinds to the American AI industry—including competitive and cheaper foreign technology like China’s DeepSeek, and the reality that in most instances AI has yet to provide real increases in productivity—mainstream investors are still placing immense trust in the future of AI and U.S. corporations are investing time, money, and people into integrating AI into many facets of their businesses and industries. For the quarter, large-company stock was up 8.1 percent, small-company stock rose 12.4 percent, while foreign stock was up 4.8 percent. Countering trends in the domestic stock market, bonds rose only 1.8 percent in the third quarter. As of the most recent U.S. data, the rate of inflation in August was 2.9 percent. In an additional boost to the market, the Federal Reserve cut interest rates by 0.25 percent, the first cut since September 2024.
Looking at these numbers, you would be forgiven for assuming that the U.S. economy overall was doing well. However, recent jobs numbers and the reality that Americans’ views of the economy continue to decline, points to a very shallow bull market that is only benefiting Wall Street while leaving Main Street behind. According to the U.S. Bureau of Labor Statistics (BLS), the U.S. job market slowed sharply in July, adding only 73,000 jobs in the month, while monthly numbers for May and June were revised down by a combined 258,000. July’s numbers are the weakest since December 2020, when the U.S. was in the midst of the COVID-19 pandemic, and the lowest in decades, except during recorded recessions.
What has the administration done in response to these astoundingly bad numbers? Rescind its tariff policies that are wreaking havoc on the U.S. economy? Institute job-creating initiatives? Do anything to substantively help the average American? No.
Instead, the current president fired BLS Commissioner Erika McEntarfer and made unfounded claims that the less-than-stellar jobs numbers and down revision of previous months’ growth indicated “rigged” numbers that were “manipulated for political purposes.” Worldwide, the BLS is one of the most highly respected statistical agencies, known for its rigorous methodology, independence, and transparency. This reputation is critical as the U.S. dollar has acted as the world’s reserve currency since the end of World War II, and trusting U.S. economic numbers is a critical factor in the rest of the world being comfortable with the dollar continuing to back the entire global economy. Without the BLS and other U.S. agencies being able to act independently from the administration, and without being able to present the real facts on the ground (not facts that support the president’s skewed worldview) foreign governments and domestic and international businesses alike will be unable to trust U.S. economic numbers, creating the possibility of an extremely dangerous economic reality.
And it’s not just BLS under threat. For several months now, the president has been threatening to fire the Chair of the Federal Reserve, Jerome Powell, whom he appointed in 2018. The president has been deeply unhappy with Powell for failing to lower interest rates, something that would likely lead to a surge in inflation, the very thing the Federal Reserve has been working for years to dampen. There has been immense backlash to this suggested firing as it is roundly illegal; Chairs are only permitted to be removed for cause, something that the president has failed to prove.
For now, the president has bent to pressure from both sides of the political aisle and concerns in the business sector. The Supreme Court—which is usually willing to kowtow to other illegal actions—recently ruled that the far-ranging powers they have bestowed on the executive do not extend to the Fed Chair. Instead, the president has targeted Lisa Cook, a Federal Reserve Governor and the first Black woman in history to serve on the Board of Governors. The president claims this firing is for cause; he asserts that a Department of Justice (DOJ) investigation alleging mortgage fraud is sufficient cause to fire Governor Cook, despite the cited “investigation” merely being an initial referral letter by the not-so-independent DOJ. Governor Cook has filed suit against the president, arguing that the dismissal was illegal. It will be interesting to see if the Courts uphold precedent and protect Governor Cook’s position, or if this becomes yet another example of the Courts bowing to the pressure of the president.
Regardless of the outcome, the dismissal of Governor Cook and the continued threats against Chair Powell are just additional nails in the coffin of the administration’s respect for the rule of law and the international community’s ability to believe in the stability of the U.S. economy and government.
Whether these pressures are part of the continued slow degrading of global respect for U.S. economic leadership or the final cracks in the dam that lead to the rest of the world looking to abandon the U.S. dollar and disentangle themselves from the U.S. economy, is yet to be seen. But regardless, damage is being done. Regaining the independence of our economic agencies—if even possible—will take hard work and time, and the actions of this administration will leave a lasting stain on the U.S.’s reputation for years and generations to come.
