Washington: What to Watch Now is a regular column that analyzes only those political and regulatory issues that could potentially affect investors. For more, listen to the WashingtonWise podcast on Apple Podcasts.

Federal Reserve policymakers meet this week amid change and uncertainty. The September Federal Open Market Committee (FOMC) meeting was already going to be consequential with the Fed poised to cut rates for the first time in 2025. But the circumstances surrounding the meeting and the uncertainty about exactly who would be participating make this the strangest Fed meeting in memory. Here's a quick update on where things stand:

• Is a rate cut coming? There is near-universal agreement that the Fed will cut rates, with the expectation that it will be a 25-basis-point reduction. There is a camp that thinks a 50-basis-point cut could be on the table. The decision will be announced Wednesday afternoon and will be followed by Fed Chair Jerome Powell's news conference. Expect a lot of questions about how the Fed is wrestling with jobs numbers and inflation numbers that are a bit in conflict with each other, as well as how the Fed is working to maintain its independence in the face of unprecedented attacks from the White House.
• Miran was confirmed at the last minute. The Senate confirmed Stephen Miran, the chair of the White House Council of Economic Advisors, to fill the open seat at the seven-member Fed Board of Governors by a 48-47 vote on the night of September 15th. Miran will only serve the remainder of an unexpired term through the end of January. Controversially, Miran is taking an unpaid leave of absence from his White House job instead of resigning, a decision that has raised questions about his ability to be independent. Miran took the oath of office at the Fed on the morning of September 16th and went directly into the FOMC meeting. It's a historically fast confirmation process for a Fed governor.
• Fed Governor Lisa Cook will be able to vote…for now. A court ruled late last week that Cook could continue serving at the Fed while the court case in which she is challenging President Donald Trump's attempt to fire her plays out. An appeals court upheld that ruling on September 15th, and the meeting began with Cook participating. The underlying case, in which the president is attempting to fire Cook "for cause" due to allegations of mortgage fraud that took place before she was nominated to the Fed, is widely expected to go to the Supreme Court eventually. This is the first time a president has attempted to fire a sitting Fed governor.
• Interviews for a potential Powell successor are underway. The search for a replacement for Powell, whose term as chair ends in May 2026, has been an oddly public one. The president said earlier this month that he was down to three finalists—National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh and current Fed Governor Christopher Waller. But Treasury Secretary Scott Bessent, who is leading the search, has said that he plans to interview nearly a dozen candidates.

Meanwhile, the clock is ticking toward government shutdown. Odds of a government shutdown at the end of the month are creeping up. Congress still has not passed any of the 12 appropriations bills to fund government operations for fiscal year 2026, which begins on October 1st. Lawmakers are facing a September 30th deadline to pass a "continuing resolution" that will keep government funding going temporarily. Republicans are pushing for an extension through November 20th, with a House vote expected late this week. Complicating matters is that both the House and Senate are scheduled to be in recess next week for the Rosh Hashanah holiday, returning to Washington on September 29th. Even if Republicans can pass a continuing resolution in the House—far from a certainty at the moment—the extension would require at least seven Senate Democrats to vote for it in order to reach the necessary 60-vote supermajority in that chamber. Democrats, however, are signaling that they won't support any funding extension that does not include a plan for addressing the looming expiration at the end of this year of enhanced Affordable Care Act subsidies. We would put the odds of a shutdown at the start of October at about 50/50, though last-minute agreements are a hallmark of these annual funding showdowns. Historically, government shutdowns have not been big market movers.

President Trump has suggested ending quarterly corporate earnings reports. The president called for requiring companies to report corporate earnings every six months in a social media post on September 15th. Trump first talked about this issue in 2018 and the Securities and Exchange Commission (SEC) solicited public comment on the idea, but it never went anywhere. In the post, the president said that moving to semi-annual earnings reporting would "save money and allow managers to focus on properly running their companies." Notably, the post also said that the idea was "subject to SEC approval," putting the ball in the court of SEC Chair Paul Atkins about how to proceed. The SEC subsequently said it would "prioritize" the issue. The discussion raises a host of issues, including whether Congress would have to get involved to make a legislative change to the Exchange Act of 1934, how investors would feel about potentially getting less information from companies, and whether such a change would exacerbate market volatility. It would likely take the SEC months to sort through the questions, conduct the required economic analysis, and potentially propose a rule to change the status quo. Put this one in the "stay tuned" category.