Trump vs. the Fed, briefly explained

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Welcome to The Logoff: Today, I want to provide some perspective on President Donald Trump’s recent criticism of Federal Reserve chair Jerome Powell, which has been making headlines but may not be a crisis, at least not yet.
What’s the update? Trump publicly lambasted Powell, urging him to lower interest rates and stating that his removal should happen sooner rather than later. Powell, on Wednesday, warned that Trump’s tariffs could hinder economic growth and lead to inflation – a viewpoint shared by the majority of economists but in contrast to Trump’s trade policy assurances.
Can Trump dismiss Powell? The law establishing the Fed stipulates that the chair can only be removed for reasons like corruption or incompetence, a stance supported by Supreme Court precedent. Nevertheless, the administration argues that the President has the authority to dismiss employees at independent agencies, such as the Fed, at his discretion based on the Constitution. Any attempt by Trump to oust Powell would likely lead to a legal battle. Powell’s term as Fed chair concludes in May 2026.
Is this a significant matter? A genuine effort to remove Powell would represent a noteworthy power grab with significant implications. The autonomy of the Fed is crucial for economic management, and attempting to take control of central banks aligns with authoritarian tactics. Trump has frequently criticized and threatened Powell on social media over 100 times since nominating him in 2017, but has not taken any tangible steps to dismiss him. As of now, there is no indication that this time will be any different.
Moreover, the administration appears to recognize the importance of the Fed’s autonomy: In February, when Trump moved to consolidate authority over all independent agencies within the executive branch, the Fed’s power to dictate interest rates was explicitly exempted from the order.
What’s the bigger picture? In a different era or administration, a president demanding the Fed to lower interest rates would be a major breach of norms that would attract significant attention. However, in a reflection of how far we have strayed from that standard, Trump’s criticism of Powell has become part of his routine.
And on that note, it’s time to disconnect…
No, scientists have not announced the discovery of alien life in a recent paper. However, they have detected a gas that could potentially be a sign of extraterrestrial life. For me, the quest for alien life is intriguing to ponder. Thank you for reading, and I look forward to seeing you here tomorrow.