In his cameo role in Home Alone 2 President Donald Trump famously gave directions to Macaulay Culkin’s Kevin. Now he’s looking to do the same for another Kevin—the next Federal Reserve chair, likely to be either Kevin Hassett or Kevin Warsh. That “advice” could make it tricky to forecast interest rates amid a flurry of economic data this week.
Whether Trump chooses economic adviser Hassett or former Fed governor Warsh might not seem to present a great difference. Both are broadly old-school Republicans with previous Fed experience. But the key factor will be who is more amenable to the rate cuts the White House wants—with Trump personally conducting interviews, according to The Wall Street Journal.
Interest rates next year should be lowered to 1%—or maybe lower—in Trump’s view. That’s far beyond what the market is forecasting according to the CME FedWatch tool and the one quarter-point cut penciled in by the majority of Fed policymakers.
Will this week’s economic releases clear up the confusion? The focus is on Tuesday’s employment reports, with data for both October and November coming in at the same time. Current Fed Chair Jerome Powell emphasized
the risks to the labor market in the decision to reduce rates last week, meaning payroll figures will likely overshadow inflation data due Thursday.
While the immediate focus will be on whether the data change
the probability of a rate cut in January—currently seen as unlikely—markets will also have half an eye on what they mean for Powell’s replacement from May next year. While the new chair will only hold one vote, their voice might be able to sway an increasingly divided committee. And the president will no doubt make his views known about the job figures as he presents the case for his economic policies.
Assuming one of the Kevins gets the top job at the Fed, don’t expect Trump to leave them alone.
—Adam Clark
***Join Barron’s senior managing editors Lauren R. Rublin and Ben Levisohn today at noon when they invite Adam Parker, founder and CEO of Trivariate Research, to a call in which they “ask Adam anything” about the 2026 investment outlook, the most promising stock sectors, and the risks to the bull market that keep him up at night. Sign up here.
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Delayed Jobs and Inflation Data Come Out This Week
The Fed’s December meeting is normally the last hurrah on a year’s macroeconomic
calendar, but the government shutdown this fall means there will be two new reports this week: November’s job report, which comes with some October data, comes Tuesday, and November’s consumer price index comes on Thursday.
- Last week’s Job Openings and Labor Turnover Survey data were higher than expected. Economists are expecting November nonfarm jobs to rise 50,000 after a 119,000 gain in September, leaving the unemployment rate unchanged at 4.4%. The job market is potentially contracting, Appcast economist Sam Kuhn recently said.
- Job growth has slowed this year, to a monthly average of 76,000 through September—less than half 2024 levels—and even Fed Chair Jerome Powell has questioned whether that figure might be too optimistic. The Fed is worried about the jobs picture and has shifted its focus to the labor market.
- Cooling employment could fuel worries about a softening economy and may threaten gross domestic product growth if it chills consumer spending. However, a weak jobs report could also keep the Fed on track to keep easing monetary policy in 2026 December’s rate cut came with hawkish commentary.
- November inflation could paint a fuller picture. Economists expect a 3.1% gain from a year ago, with core CPI—excluding food and energy—rising 3%. September readings came in at 3% annualized growth for both. But the shutdown weighed on airfare and hotel prices, meaning November’s reading could come in light.
What’s Next: Michael Gapen, Morgan Stanley’s chief U.S. economist, expects November’s unemployment rate to tick up to 4.6%. “With the Fed’s forecast for the unemployment rate at 4.5% in the fourth quarter of 2025, we think any rise to 4.6% or above will keep the Fed in easing mode,” he wrote.
—Teresa Rivas
Supreme Court Tariffs Decision Looms. 3 Ways It Could Play Out.
Clarity, in terms of an impending legal ruling over President Donald Trump’s
tariffs, is unlikely to come with certainty. The Supreme Court could soon rule whether the levies are legal. There are three ways the decision could play out, based on Barron’s conversations with trade lawyers, policy consultants, and strategists.
- One path the Supreme Court could take would be a hybrid ruling, deeming the country-based “reciprocal” tariffs imposed under the International Emergency Economic Powers Act as illegal, but still preserving the levies on China and Canada that relate to fentanyl flows.
- Alternatively, the Supreme Court could rule that all IEEPA tariffs are illegal, which would shift importers’ focus to gaining refunds for the duties they have already paid. Some analysts say the court could suggest an administrative process to handle refunds—what would likely be a logistically heavy lift for U.S. Customs and Border Protection.
- The Supreme Court could also uphold the administration’s use of IEEPA and reverse the lower court’s ruling that found Trump overstepped his authority. Since 2007, when the court takes a case it has reversed a lower court’s decision about 70% of the time.
What’s Next: The decision, whichever way it goes, won’t close the book on trade volatility. “It isn’t going to create certainty: There could be litigation and new tariff authorities used,” said Everett Eissenstat, a partner at Squire Patton Boggs and former deputy director of the National Economic Council in the first Trump term. “It isn’t going to be a cut-and-dried outcome.”
—Reshma Kapadia and George Glover
Elon Musk’s SpaceX Could Serve Up a Feast in 2026
SpaceX could be a feast for investors in 2026. Already a secondary share sale has pushed Elon Musk’s commercial space start-up to an $800 billion valuation, which is bigger than OpenAI and TikTok-owner ByteDance. And
that’s while it prepares for an initial public offering that could be the biggest ever.
- The private company’s secondary sale, at $421 a share, was up from $212 a share in July. Bloomberg reported the secondary sale, citing an internal memo. When a public listing might happen is highly uncertain, and SpaceX didn’t respond
to a request for comment.
- SpaceX doesn’t report its financial results, but Musk has said he expects it to generate around $15.5 billion in revenue this year. An $800 valuation would boost Musk’s wealth by roughly $160 billion. He owns about 40% of the company.
- SpaceX is the world’s busiest rocket launcher, accounting for more than half of global orbital launches. Most of its value is t
