In a new analysis shared with Fortune, Swonk argues that Powell is treating the slowdown in hiring as a sign of weakening demand that must be offset with lower interest rates. But if that weakness is being driven instead by structural forces—specifically, AI adoption and sharp declines in immigration—then cutting rates won’t fix the underlying problem and could worsen inflation.

“Powell risks the Fed’s inflation-fighting credibility if the weakness in employment is due more to AI and curbs in immigration than weak demand,” Swonk wrote.

That warning comes after one of the most contentious Federal Open Market Committee meetings in years. The Fed cut rates by a quarter point for the third meeting in a row, taking the federal funds rate down to 3.5%–3.75%, but the vote fractured the committee. Swonk notes it was the first time since 2019 that there were three dissents, and they came “in opposite directions.”

Governor Stephen Miran — currently on leave from the White House Council of Economic Advisers — voted for a half-point cut, while Kansas City Fed President Jeff Schmid and Chicago Fed President Austan Goolsbee voted to hold rates steady.

Swonk highlights that the Fed’s statement resurrected language meant to indicate a pause: “In considering the extent and timing of additional adjustments… the Committee will carefully assess incoming data, the evolving outlook and the balance of risks.” Powell reinforced that stance, saying “We are well positioned to see how the economy evolves” and emphasizing that policymakers would need to “be a bit skeptical” of data distorted by the government shutdown.

But the bigger issue, Swonk argues, is that Powell kept pointing to imminent downward revisions to employment, revisions she warns may not mean what the Fed thinks they do.

If job growth is negative because automation is replacing workers or because the labor force is shrinking due to immigration policy, then monetary policy can’t solve the problem. That’s because rate cuts can stimulate demand, but they cannot create workers or reverse automation decisions already made by firms. 

“The challenge is if that weakness is due to AI and curbs on immigration, then rate cuts will not do much to shore up the labor market. More could show up in inflation,” she wrote.

Powell, during the conference, acknowledged that AI may be “part of the story” behind the cooling labor market, citing major employers like Amazon that have linked hiring freezes and job cuts to automation. But he stressed that it’s “not a big part of the story yet,” and said it’s too early to know whether this wave of technological change will ultimately destroy more jobs than it creates.

He also noted that labor supply has “come down quite sharply” due to a drop in immigration and participation.

A misread could become especially dangerous given the fiscal backdrop. Swonk notes that “expansions to tax cuts last year will show up as a record high tax refunds in early 2026,” warning that the windfall could “further entrench inflation much like we saw in the wake of the pandemic.” 

At the same time, federal debt is projected to surpass GDP for the first time since World War II, marking a level of issuance that is “a lot of debt for bond markets to absorb.”

Swonk also flags mounting risks to credibility inside the Fed itself.

Six participants wanted to hold rates steady, and the market openly dismissed Powell’s attempt at a hawkish spin: investors “priced in more cuts after the meeting,” she notes. Powell now appears to be one of the more dovish voices on the committee, raising questions about the direction of policy if the administration installs a new chair aligned with Miran’s more aggressive easing stance.

Swonk expects the Fed to pause early next year, but warns that if inflation fails to cool as expected, “the bond market could grow more skittish about rate cuts.”

KISS frontman Gene Simmons has urged the US Congress to pass a bill that would require US broadcast radio stations to pay royalties for the use of recordings for the first time.

“American artists have never been paid for radio airplay. Not one cent,” Simmons said in prepared remarks in front of the Senate Judiciary Committee’s subcommittee on intellectual property on Tuesday (December 9).

“Let me say that again: Frank Sinatra, Elvis Presley, Whitney Houston, Garth Brooks, George Strait – none of them ever got a royalty check when their songs played on the radio. Meanwhile, radio made $14 billion this year.”

The US has long followed a practice under which broadcast radio stations pay music publishers and songwriters for the use of a composition, but they don’t pay artists and producers for the use of a recording. That sets the US apart from most developed countries, where terrestrial radio stations pay for both compositions and recordings.

It also stands in stark contrast to other music media, such as streaming services and satellite radio, which do pay for recordings in the US.

“They play our songs. People tune in to hear our songs. Advertisers pay big money to reach those listeners. And the artists who created the music that makes it all work? They get bupkis. I don’t know about you, but where I come from, that’s called robbery,” Simmons said.

“American artists have never been paid for radio airplay. Not one cent.”

Gene Simmons

Simmons appeared in front of the committee in support of the American Music Fairness Act, a proposed law that had stalled in previous congressional sessions and was reintroduced in Congress this past January by Sen. Marsha Blackburn, a Tennessee Republican, and Rep. Darrell Issa, a California Republican.

The bill would establish a performance right for recordings played on terrestrial radio, mandating that artists, performers, producers and others involved in the creation of a recording be paid a fair market rate for radio airplay.

At times Simmons strayed from his prepared remarks, declaring that “if you are against this bill, you are un-American,” and adding, per Rolling Stone: “Our emissaries to the world are Elvis and Frank Sinatra. And when they find out we’re not treating our stars right — in other words, worse than slaves; slaves get food and water. Elvis and Sinatra and Bing Crosby got nothing for their performance. You’ve got to change this now.”

Simmons, who just this past Sunday received Kennedy Center Honors in Washington, DC, along with his KISS bandmates. appeared in the Senate alongside Michael Huppe, President and CEO of digital performance royalty collection org SoundExchange, who urged Congress “to finally close this glaring loophole in our copyright law which has been giving one of the oldest music delivery platforms a free ride for far too long.”

“We are in the company of the most notorious abusers of property rights in the world – joining North Korea, Iran, and Cuba.”

Michael Huppe, SoundExchange

Huppe noted that the current practice puts the US in bad company.

“Even Russia and China pay,” he said. “We are in the company of the most notorious abusers of property rights in the world – joining North Korea, Iran, and Cuba.”

The Recording Academy, which has thrown its weight behind the bill, notes that “when American music is played overseas, other countries collect royalties for American artists – approximately $200 million annually – but never pay those royalties because the US does not reciprocate with our own performance right.”

The bill is currently under consideration by the Senate Judiciary Committee and has yet to come to a vote. Simmons told the subcommittee that he’s “confident” President Donald Trump will sign it into law if it passes through the Senate and House.Music Business Worldwide

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