Philadelphia Federal Reserve President Anna Paulson said Tuesday that she thinks the current level of interest rates is sufficient to keep inflation moving toward the central bank’s goal.

In her first CNBC interview, the policymaker insisted she has an open mind about where monetary policy should go, but was confident in her vote last week to keep the Fed’s benchmark borrowing rate anchored at its current target level of 3.5%-3.75%.

“I think we need … policy that’s mildly restrictive, and I think policy has been mildly restrictive to get underlying inflation back down to 2% in an acceptable time period,” Paulson told CNBC’s Steve Liesman during a “Squawk Box” interview. “I need to see progress from here.”

The level of restriction that the current policy level is having on the economy is a key debate point for Fed officials, who have held rates steady all year as inflation has stayed well above the 2% target.

At last week’s meeting, the Federal Open Market Committee, of which Paulson is a voting member, opted by a 9-3 tally to keep the hold on rates. Dissenting voters questioned whether the current rate level is sufficiently restrictive to bring inflation lower.

However, Paulson said voting with the majority wasn’t a tough decision.

“For me, it was not a close call,” she said, adding that she thinks underlying inflation outside of energy supply shocks, tariffs and other factors is around 2.4%-2.8%. The core inflation level that the Fed uses as its primary forecasting tool was 3.3% in June, the Commerce Department reported Thursday.

If that level doesn’t move lower, then Paulson said she’ll be open to adjusting rates.

“Maybe there was a little bit of mild progress over the last several months, but I want to see more progress on that, and that’s what I’m really focused on,” she said. “If we don’t see that progress, then we have to be open to recalibrating monetary policy. You know, we need to get to 2%.”

Paulson added she is keeping an “open mind” about some of the changes Chairman Kevin Warsh has discussed, including the potential to reduce the frequency of FOMC meetings from the current level of eight per year.

“It’s healthy to have a discussion about that,” she said.

U.S. Secretary of State Marco Rubio on Wednesday accused Iran of not honoring the Strait of Hormuz deal, while reiterating that Washington was “committed to diplomacy” in the Middle East.

His comments come as U.S. Central Command hit Iranian targets for an 11th straight night, as it seeks to “continue degrading Iran’s ability to threaten commercial shipping in the Strait of Hormuz.”

Centcom said it had hit military operations centers, drone storage facilities, and military logistics infrastructure.

Speaking at the ASEAN Foreign Ministers’ meeting in the Philippines, Rubio said that “the problem we’re having right now is that they’re not serious about talks. If they’re serious, we’re serious. If they’re not, then we will do what is necessary to protect our interest and also the interest of our allies.”

He added that a key sticking point between Teheran and Washington was that Iran “demands the right” to control traffic in the Strait of Hormuz, a right it does not have under international law.

“If we create a precedent in the Middle East, where a nation state can decide that they are going to control an international waterway, charge a toll, and if you don’t pay them, blow up your ships, we have created a very dangerous precedent, which will repeat itself in other parts of the world, including in this region,” Rubio warned.

Rubio appeared to make a veiled reference to China, saying that “of all the regions in the world, the one I don’t need to teach about the importance of freedom of navigation in international waterways, it is this region.”

The U.S. Navy has in the past conducted “freedom of navigation” operations around disputed islands in the South China Sea, where several Southeast Asian countries have competing claims with China, whose “nine-dash line” claims almost all of the sea as its waters.

That is despite a 2016 ruling by the Permanent Court of Arbitration that said that China’s claims has no basis under international law. China has refused to recognize that outcome.

Oil prices jumped on Wednesday morning. International benchmark Brent crude futures with September delivery rose 3.7% to $94.43 per barrel, while U.S. West Texas Intermediate futures advanced 4% to $87.67.

U.S. and Iran had signed an interim memorandum of understanding on June 17 that halted military operations, called for the reopening of Hormuz and established a 60-day window for negotiating a permanent agreement, including terms covering Iran’s nuclear program. But the document left the future management of the Strait of Hormuz unresolved.

Iran interpreted the text as recognizing a role for Tehran in managing…

The Japanese yen weakened to its lowest level against the U.S. dollar since 1986 on Tuesday, keeping investors on alert for possible intervention from Japanese authorities.

The yen weakened to 162.27 per dollar in early Asian trading, marking its lowest level in four decades.

Chief Cabinet Secretary Minoru Kihara said at a regular press conference on Tuesday that the Japanese government will work to build an economy less vulnerable to foreign-exchange volatility while remaining prepared to intervene in currency markets if necessary. Kihara also declined to comment on the yen’s current level.

The Bank of Japan recently raised its benchmark interest rate to 1%, the highest level in more than three decades, as policymakers continued the monetary policy normalization that began in 2024.

The quarter-point increase marked the central bank’s first rate hike since December, when it lifted rates to 0.75%, and brought borrowing costs to their highest level since 1995.

The move came as Japan grappled with rising inflationary pressures, partly fueled by higher energy prices during the Iran conflict.

The European Commission has found that Meta breached EU law by failing to prevent under-13s from accessing its platforms, as scrutiny of the tech giant’s handling of child safety intensifies.

The commission said Wednesday that its preliminary investigations concluded that Meta violated the EU’s Digital Services Act because the minimum age requirement of 13 for Instagram and Facebook is not adequately enforced.

When creating an account, minors can input a false birth date, with no controls in place to verify it, the Commission said.

Additionally, the tool for reporting a minor’s account is “difficult to use” and requires up to seven clicks to access the form, the commission said. Even when a minor’s account is reported, the commission found that there are often no adequate follow ups or measures to get them off the platform.

“The Commission considers that Instagram and Facebook must change their risk assessment methodology, in order to evaluate which risks arise on Instagram and Facebook in the European Union, and how they manifest,” the commission said in its announcement.

A Meta spokesperson told CNBC: “We disagree with these preliminary findings. We’re clear that Instagram and Facebook are intended for people aged 13 and older and we have measures in place to detect and remove accounts from anyone under that age.

“We continue to invest in technologies to find and remove underage users and will have more to share next week about additional measures rolling out soon. Understanding age is an industry-wide challenge, which requires an industry-wide solution, and we will continue to engage constructively with the European Commission on this important issue.”

Meta can now review the Commission’s preliminary investigation findings and respond in writing. If the commission’s findings are confirmed by its final investigation, it can fine Meta up to 6% of its total worldwide annual turnover.

This comes after two high-profile U.S. court rulings in March: one found that aspects of its platform design contributed to addiction and mental health harms among teenagers, while the other concluded that the company misled users about children’s safety on its platforms.

Meanwhile, a blanket social media ban for under-16s is gaining traction with governments worldwide, after Australia became the first country to implement such a ban.

The U.K., Spain, and France are among some of the countries looking at legislation to prevent teens under 16 from being on social media.

U.K. regulators also urged social media giants, including YouTube, TikTok, Snapchat, Instagram, and Facebook, to enforce stricter protections for children on its platforms in March.

The Information Commissioner’s Office said that the platforms need to implement better age verification technologies as opposed to just “self declaration,” which is “easily circumvented.” This could include facial age estimation, digital ID, or…

For DBS CEO Tan Su Shan, the biggest risk keeping her up at night is not just market volatility or geopolitical shocks, but cyberattacks.

“Cyber security. I think the new war is cyber. So what keeps me awake at night is cyber. It’s who’s going to attack who, and how it’s going to happen, how people will get affected,” the chief executive of DBS told CNBC on the sidelines of its annual CONVERGE LIVE event in Singapore. 

Her warning underscores a broader shift in how financial institutions are thinking about risk, as cyber threats become increasingly intertwined with geopolitics and rapid advances in artificial intelligence.

Tan said banks are now operating in an environment where cyber risks are constant and evolving, requiring a mindset of perpetual vigilance. “Assume nothing, trust nothing, trust nobody,” she said, describing how DBS approaches cybersecurity internally.

That has translated into continuous “red teaming,” or stress-testing systems by simulating attacks, as well as a culture of what she described as deliberate paranoia. The goal is to anticipate vulnerabilities before attackers exploit them, particularly as AI lowers the barrier for more sophisticated cyber threats, she said.

“We’re constantly being paranoid about cybersecurity… what will separate the winners from the losers is good adoption, smart adoption, safe adoption,” Tan said.

The rise of generative and “agentic” AI has added a new layer of complexity. While these technologies promise productivity gains and operational efficiencies, Tan warned they also expand the attack surface — or all the points at which an authorized user can attack a system — especially when deployed in critical systems.

“When it touches production… make sure that you’ve got all the relevant guardrails,” she said, referring to AI systems that interact directly with customer-facing or core banking infrastructure.

That vigilance has become even more critical as financial institutions deepen their adoption of artificial intelligence. While AI promises efficiency gains and new capabilities, Tan said it also introduces fresh vulnerabilities, particularly as systems become more interconnected and autonomous.

The rise of generative and agentic AI, she noted, has created “fantastic opportunities, but also fantastic challenges and a lot of scariness that comes with it,” especially when it comes to safeguarding sensitive data and core banking infrastructure.

For DBS, that has meant building strict frameworks around how data is handled and monitored. Tan emphasized the importance of “data lifecycle management,” ensuring that data is properly governed from creation to deletion, with clear controls over access, auditability and transparency.

At the same time, the operating environment for markets and banks has grown more volatile, shaped by supply chain disruptions, trade tensions and conflict-driven shocks, from the pandemic to tariffs and now the Iran war.

Tan said these shocks have forced companies to rethink…

President Donald Trump on Wednesday said he would love to fire Federal Reserve Chair Jerome Powell, but suggested that Treasury Secretary Scott Bessent is holding him back.

“[I’ll] be honest, I’d love to fire his ass,” Trump said of Powell at the U.S. Saudi Investment Forum in Washington, D.C.

Trump urged Bessent to “work on” Powell to quickly lower interest rates — and quipped that the Cabinet secretary’s job depended on it.

“The only thing Scott’s blowing it on is the Fed,” Trump said. “The rates are too high, Scott, and if you don’t get it fixed fast, I’m gonna fire your ass.”

It was unclear how seriously Trump was threatening to fire Bessent.

White House spokesman Kush Desai told CNBC in a statement, “The White House maintains complete confidence in Secretary Bessent’s job running the Treasury Department and President Trump’s search for a new – and competent – chairman of the Federal Reserve.”

Trump went on to recite a conversation in which Bessent pleads with the president to let Powell finish out his term as chair, which is set to end in May 2026.

“I can’t tell you — Scott: ‘Sir, don’t fire him. Sir, please don’t fire him. He’s got three months to go, don’t fire him,'” Trump said. “I wanna get him out!”

Trump added that Commerce Secretary Howard Lutnick is “a little bit more for firing.”

“I think Howard would say, ‘Get him the hell out.'”

The remarks came shortly before the release of minutes from the Fed’s October meeting, which show central bank officials were conflicted over whether to cut rates further. The rate-setting Federal Open Market Committee ultimately approved a quarter percentage point reduction in the overnight borrowing rate to a range of 3.75%-4% at that meeting. The group will gather again in December.

Trump has long criticized Powell for declining to slash rates as quickly and deeply as the president wants.

At the White House on Tuesday, Trump said, “people are holding me back,” from firing Powell.

He also said that his administration is talking to multiple candidates to succeed Powell. Bessent is assisting in the search process.