Trump’s Fed Dilemma: Will Powell Stay or Go?
Let’s be real—Jerome Powell’s job security is looking shaky these days. Former President Trump and his crew aren’t exactly hiding their frustration with the Fed chair, especially when it comes to interest rates. And you know Trump—he never holds back. The guy who once said he regretted appointing Powell is now openly questioning whether he should stick around. But here’s the thing: it’s not just about personalities. This is a high-stakes game with the economy, inflation, and even the 2024 election hanging in the balance.
Trump vs. Powell: The Rematch
Trump’s beef with Powell isn’t new. Remember those days when he’d blast the Fed on Twitter for not cutting rates fast enough? Well, that same tension is bubbling up again. Trump’s allies—like economist Stephen Bessent—are doubling down, arguing the Fed’s current approach could slam the brakes on growth. “If they want to make a mistake here and not cut, that’s fine,” Bessent said recently. Classic Trump-world defiance.
But here’s where it gets messy. Critics keep blaming Trump’s tariffs for driving up prices, but his team swears that’s not the case. “Thus far,” Bessent added—which, honestly, sounds like he’s leaving himself an out. Economists are split, and the Fed? They’re stuck playing referee between inflation and recession. Not an enviable job.
Who’s Next in Line?
So if Powell gets the boot, who steps in? Names like Kevin Warsh and Judy Shelton keep popping up. Warsh is a former Fed guy who’s critical of post-2008 policies—right up Trump’s alley. Shelton? She’s the wild card, talking about gold standards and tighter Fed control. Both would probably push Trump’s “America First” agenda hard. But let’s be honest: Trump’s real checklist for a Fed chair is simple. Loyalty? Check. Willingness to cut rates? Double-check. And absolutely no “raising rates too soon” nonsense.
Why Timing Is Everything
Here’s the kicker: 2024 is an election year, and the Fed’s leadership could become a campaign issue. Google searches show people are already paying attention. A pre-election shake-up might fire up Trump’s base, but markets? They’d probably freak out. And replacing Powell isn’t like swapping out a cabinet member. The Senate has to approve a new chair, and good luck getting Democrats—or even some Republicans—on board with a radical pick.
What This Means for the Rest of Us
Markets hate uncertainty, and dumping Powell would deliver it in spades. Look at 1978—when Arthur Burns got replaced, things got ugly fast. A Trump-friendly Fed chair might juice the economy short-term, but at what cost? If the Fed starts taking political orders, decades of independence could go out the window. And that’s the real worry.
Bessent and other Trump allies keep insisting their policies work—tariffs and all. But analysts like Larry Summers aren’t buying it. The truth? Nobody really knows how this plays out. Some think Powell survives a second Trump term; others predict a full Fed overhaul. “Depends how much Trump wants to burn the house down,” one insider joked. Not exactly comforting.
The Bottom Line
This isn’t just about Powell. It’s about who controls the economy—and how far Trump’s willing to go to put his stamp on it. Get it right, and he could shape policy for years. Get it wrong? Well, let’s just say the fallout wouldn’t be pretty. One thing’s for sure: the next Fed chair, whoever it is, will have one heck of a mess to clean up.
Source: NY Post – Business
