0% Rates Are Here
Submitted by QTR's Fringe Finance
Jerome Powell’s days at the Federal Reserve are effectively numbered — even if President Trump can’t fire him outright. So, it’s time to think ahead.
The president has made clear, both in word and action, that he views Powell not as an independent central banker but as an obstacle to his economic agenda.
Trump recently escalated his criticism of Powell, accusing him of keeping interest rates too high and costing the U.S. "hundreds of billions" of dollars. In a handwritten note, Trump called Powell “too late as usual” and pointed to other countries with much lower rates as examples the U.S. should follow.
He’s also attacked Powell personally, calling him “average mentally” and a “numbskull,” and has suggested he might try to remove him early or sideline him with a “shadow Fed chair”. Trump blames Powell for being slow to cut rates even though inflation has eased, and he argues that Powell’s policies are hurting sectors like real estate.
His public attacks have raised concerns about central bank independence and potential market instability.
Trump has now spent years publicly ridiculing Powell, blaming him for everything from slow GDP growth to falling stock prices. In 2019, he went so far as to say Powell was a “bigger enemy than China.” He questioned whether Powell was “a worse enemy than the Chinese Chairman” and routinely tweeted that the Fed was holding the economy back.
Even if Powell serves out the remainder of this term, the pressure campaign will be relentless. We’ve seen this playbook from Trump before: insult, belittle, and publicly undermine until the target either caves or disappears. Trump doesn’t need legal authority to fire Powell — he just needs time and a Twitter account. If he can’t fire him, he can undermine hime by announcing his replacement early.
And once Powell is out of sight and out of mind, he’ll be replaced by someone loyal to Trump. It won’t be a Volcker, or even a Bernanke. It’ll be someone who sees their job the way Trump sees it: cut rates, juice the market, and fuel the illusion of unstoppable economic growth so Trump can claim he had the greatest economy in history during his presidency.
Trump has been explicit about what he wants...(READ THIS FULL COLUMN HERE).