Trump vs Powell. It’s On!

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Federal Reserve Chairman Jerome Powell spoke Wednesday at The Economic Club in Chicago where he stated that he saw “a strong likelihood” that consumers would face higher prices and that the economy would see higher unemployment as a result of tariffs in the short run.”

Powell went on to say this could create a “challenging scenario” for the central bank because anything it does with interest rates to address inflationary pressures could worsen unemployment, and vice versa.

“It’s a difficult place for a central bank to be, in terms of what to do,” Powell said.

Powell explained that the Fed is still focused on curbing inflation. But, in the words of Ulysses Everett McGill, he’s in a tight spot. Normally, the Fed lowers interest rates when the economy weakens. However, Trump’s tariffs are already triggering inflation. Powell doesn’t want to add to that by lowering interest rates.

In response to these rather logical points, especially the part about not immediately lowering rates, President Trump — the once self-proclaimed “King of Debt” — exploded Thursday morning:



Trump does not have the power to fire Powell, but there are reports he’s willing to try. That wouldn’t be shocking given how Trump 2.0 has gone so far.

But given that Powell’s term runs until May 2026, my guess is Trump will do what he does best: continue the verbal assaults and make Powell’s life miserable until he can be replaced.

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Who holds the Fed accountable when Fed bank presidents are caught red-handed trading stocks first and then bailing out the world in 2020? It turns out it’s the Fed! The Fed’s Inspector General investigated the matter and gave little more than slaps on the wrist.

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Some have said that San Francisco Fed President Mary Daly was too busy focusing on DEI instead of a banking crisis growing right in front of her face. Meanwhile, inflation continues to plague the nation.

Presidents have the power to appoint a Federal Reserve chairman every four years and Federal Reserve Board Governors to four-year terms. The Fed chairman must also give testimony twice a year to Congress.

That’s about all the accountability the Fed has. It perhaps has more unchecked power than all three branches of the government combined.

That can lead to a lot of political tension between presidents and the Fed during times of inflation.

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