Trump urges Fed governor Cook to resign, eyes new board opening

Good morning. Here's what happened overnight and what you need to know today.

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1.

Under fire: US President Donald Trump called on Federal Reserve governor Lisa Cook to resign after one of his government officials accused Cook of mortgage fraud. “Cook must resign, now!!!,” Trump posted after head of the Federal Housing Financing Agency, Bill Pulte, called on US Attorney General Pam Bondi to investigate Cook for submitting what he said was fraudulent information on two mortgages. He would submit information to the Justice Department in a criminal referral, Trump said. Pulte alleges that Cook sought mortgages on two properties, describing both of them as her primary residence, in applications filed 14 days apart, and later advertised one of the homes for rent. Trump told aides he is considering firing Cook, a Biden-appointee, for cause, The Wall Street Journal reported. Her resignation or firing would create another opening for Trump on the Fed board, as he campaigns for the central bank to drastically lower interest rates. Meanwhile, minutes from the Fed’s July meeting showed that aside from Trump appointees Michelle Bowman and Christopher Waller, almost all other Fed officials backed holding rates steady, seeing inflation as a greater risk than a cooling labour market. Labour data weakened soon after that meeting, while subsequent reports showed inflation accelerating. (Capital Brief)(Bill Pulte)(WSJ)(Fed)

2.

Extended selloff: Signs that inflation remains the predominant concern for Fed officials extended a weeklong tech rout that has lopped billions from US equity values. The Nasdaq fell 0.67% to a two-week low while the S&P 500 dropped 0.24%. The Dow closed 0.04% higher. Fed minutes showed “a majority of participants judged the upside risk to inflation as the greater of these two risks.” Nvidia, AMD, Intel and Micron were all lower, while Palantir pushed further into correction territory after six straight days of heavy selling. Target shares fell more than 6% after naming insider Michael Fiddelke as its next CEO and holding to lowered forecasts, while Estée Lauder dropped after tariff costs weighed on its annual profit outlook. The Wall Street Journal reported Elon Musk is quietly pumping the brakes on plans to start his America Party as he looks to preserve ties with Vice President JD Vance, whom he may back in a 2028 presidential run, though he seemed to deny the report in an X post. (Bloomberg)(Reuters)(WSJ)

3.

Israeli offensive: Israel's planning committee gave final approval to the controversial and long-frozen E1 settlement project, east of Jerusalem and adjacent to the settlement of Maale Adumim. The project, under consideration for more than two decades, would split the Israeli-occupied West Bank and sever it from East Jerusalem, effectively undermining any future Palestinian state. "The Palestinian state is being erased from the table, not with slogans but with actions," Israeli Finance Minister Bezalel Smotrich said. The international community overwhelmingly considers settlement construction in the West Bank illegal and a barrier to peace. If implemented, it would “mark a flagrant breach of international law and critically undermine the two-state solution,” British Foreign Secretary David Lammy said. “The Israeli government must reverse this decision.” The move coincided with Israel’s decision to call up 60,000 reservists in the coming days as part of its plan to occupy all of Gaza City. The ‘Gideon’s Chariots II’ military plan will see another 20,000 Israeli reservists have their service extended. (FT)(IDF X)(BBC)(Reuters)

4.

Wealth heat: Citigroup hired law firm Paul Weiss to investigate complaints about the behaviour of wealth-management chief Andy Sieg, Bloomberg reported citing unnamed sources with direct knowledge of the matter. The probe was reportedly opened at the request of HR chief Sara Wechter and included interviews with more than a dozen people, including at least six managing directors, some as recently as July. Current and former staff accused Sieg of intimidating and unfairly sidelining employees since joining Citigroup almost two years ago, including through expletive-filled rants and sarcastic comments. Some complaints focused on Sieg’s treatment of Ida Liu, the former head of Citigroup’s private bank who left the company in January, and Kristen Bitterly, a senior wealth executive. Under Sieg, Citigroup’s wealth unit has refocused on investment services over lending and delivered record second-quarter revenue of USD2.17 billion. Citigroup declined to comment on the completed investigation. The bank’s shares fell as much as 3.3% before partially recovering. (Bloomberg)

5.

Canva unlocked: Canva kicked off an employee share sale at a USD42 billion ($65.3 billion) valuation, saying the offer is already oversubscribed. The round is led by existing investor Fidelity, with JP Morgan Asset Management and Wellington Management joining the register. The valuation represents a more than 30% jump from last year. With a US float anticipated in 2026, this sale is likely to be Canva’s final staff share offering as a private company. According to an email cited by The Australian Financial Review, eligible current and former ‘Canvanauts’ can sell up to USD3 million of vested equity at USD1,646.14 per share. Canva said it has 240 million monthly active users, 27 million paid seats, USD3.3 billion in annualised revenue, strong cash reserves and has been profitable for the past eight years. The sale follows a ruling by the ATO that treated Canva’s US relocation as a vesting event, forcing some staff to pay tax this financial year. (Capital Brief)(AFR)

6.

Lonely leader: The Commonwealth Bank failed to mobilise its big four rivals and the broader financial services industry for its campaign against key payment reforms proposed by the Reserve Bank, but still proceeded to fire a letter to the central bank outlining its concerns. As Capital Brief this week revealed, CBA spent weeks revising a confidential letter to RBA governor Michelle Bullock – expressing “deep concern” over some of the proposals in the central bank's payments review – and searching for industry allies to lend their signatures to it. But a source with direct knowledge of the situation who requested anonymity to speak freely told Capital Brief that Australia’s largest bank had sent the letter itself on Tuesday despite a cool response from its rivals and the industry's peak lobby group, who all declined to endorse it. (Capital Brief)

7.

Bug embargo: Microsoft has curtailed Chinese companies’ access to early alerts about cybersecurity vulnerabilities in its technology after investigating whether a leak led to a series of hacks exploiting flaws in its SharePoint software. Citing a company spokesperson, Bloomberg reported the company will no longer provide “proof of concept” code and will instead issue “a more general written description” of vulnerabilities at the same time as patches are released. The change applies to participants in countries “where they’re required to report vulnerabilities to their governments,” which includes China. Microsoft also confirmed it had “long retired” its transparency centres in China, which have not been visited since 2019. These centres had previously allowed the Chinese government to review Microsoft’s source code to verify it was free of hidden “backdoors” for surveillance. (Bloomberg)

8.

Frontier financed: JP Morgan and MUFG will lead a USD22 billion ($34.17 billion) loan to support Vantage Data Center’s plan to build a massive data-centre campus in Texas, according to sources cited by Bloomberg. The debt, which is yet to be priced, will support Vantage’s plans for a USD25 billion ‘Frontier’ campus in Shackelford County, Texas announced on Tuesday, which will host 10 data centres across 1,200 acres. Sources told the FT that the first of 10 data centres within the campus would be completed by mid-2026 with the remainder built by the end of 2028. The news highlights the speed at which US banks are deploying billions to fund properties that big tech will increasingly rely on to power their artificial intelligence ambitions. Silver Lake Management and DigitalBridge Group have also committed USD3 billion of combined equity for the project, Bloomberg reports. (Bloomberg)(FT)(Vantage)(Capital Brief)