Precious few of us know anywhere near enough about macro-economics to opine about the impact of interest rates on the overall economy generally and inflation specifically. Luckily, there are those few who most certainly do understand and take on the cause for us in setting the rates paid between banks. Those rates then flow down to our mortgages, cars, and credit cards. Federal Reserve Chairman Jerome Powell has had the thankless task of pulling us out of post-COVID inflation and did so winningly. Though prices haven’t gone down, inflation has abated. Now, though, Donald Trump wants to politicize a process that cannot work unless it is above politics, and his comments today are sure to destabilize the entire economy.
One doesn’t need to know sh*t about econ to know that every president would love to have low inflation along with low interest rates. If we somehow got into a position where the Fed chair was beholden to the president, it would send our economy into a tailspin because the president would take away a primary tool – raising rates. But like so many other things, Donald Trump thinks he knows better than the Fed Chair, and – even more dangerously, refuses to think beyond his own administration. Today, he let loose on Jerome Powell, writing on Truth Social: (Posted below)
“‘Too Late’ Powell complains about costs, much of which were produced by the Biden Fake ‘Government,’ but he could do the biggest and best job for our Country by helping to lower Interest Rates and, if he reduced them to the number they should be, 1% to 2%, that ‘numbskull‘ would be saving the United States of America up to $1 Trillion Dollars per year.”
First, it couldn’t matter less whose government did what, even if Trump’s words were true, but that goes directly to the point, Trump sees things as transactional to him and what his administration deserves. Additionally, the Fed has to look five to ten years down the road in managing current interest rates and cannot worry about “saving $1 trillion” per year. If Trump wants a trillion dollars, tax the fcking rich.
“I fully understand that my strong criticism of him makes it more difficult for him to do what he should be doing, lowering Rates, but I’ve tried it all different ways. I’ve been nice, I’ve been neutral, and I’ve been nasty, and nice and neutral didn’t work! He’s a dumb guy, and an obvious Trump Hater, who should have never been there, I listened to someone that I shouldn’t have listened to, and Biden shouldn’t have reappointed him,”
The juvenility is just mystifying. Perhaps the “smart guy” Trump should ponder whether Powell looks at things beyond whether Trump is “nice” to him. Notice, too, that Trump dodged the fact that he, in his infinite wisdom, who appointed Powell – it’s someone else’s fault, and then rakes Biden for the reappointment. An eleven-year-old would blush making such a laughably stupid point.
“If he was concerned about Inflation or anything else, then all he has to do is bring the Rate down, so we can benefit on Interest Costs, and raise it in the future when and if these ‘other elements’ happen (which I doubt they will!). Don’t say that you think there will be Inflation sometime in the future, because there isn’t now but, if there is, raise the Rates! We should be at the TOP of the attached List, not the bottom. I don’t know why the Board doesn’t override this Total and Complete Moron!”
Maybe the Board doesn’t override him because they all agree? Maybe Donald Trump isn’t actually that knowledgeable about the economy and only wants what’s best for him? Keep in mind, Donald Trump is a real estate guy and loves low interest rates even more than most. Every percentage point drop is real cash in Trump’s hands.
But all of this isn’t even about Jerome Powell so much as the position itself. The Chair cannot even be seen by others as beholden to presidential politics. It will, by definition, instill fear into the system, that the economy’s overall health is being managed to suit a political agenda rather than long-term goals and stability. Even if Trump keeps Powell, there is the danger that he appoints a stooge to the position next time, someone seen by others as a “Trump guy” (And you know it will be a guy).
Trump is big mad about Jerome Powell for not lowering rates
Trump calls Fed Chair Jerome Powell (who he appointed) a “numbskull,” a “dumb guy and an obvious Trump hater,” and a “total and complete moron.”Completely unhinged
— Republicans Against Trumpism (@rpsagainsttrump.bsky.social) 2025-06-20T22:29:52.590Z
Notice he ends with the question as to whether to fire Powell? Yes, Wall Street will surely spank him for even floating the idea. Economics is built on perceptions, and the perception will now be that Trump will destabilize the economy by upending Powell and appointing a gopher to lower rates.
So, while it is always amusing seeing Trump meltdown on Truth Social, put this on the list of atrociously dangerous moves Trump makes all in the interest of his next six months – trying to win the week, the day, the hour. It is easier to convince an eleven-year-old to worry about the next five years.
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He’s got it backward. It’s Frump’s meddling with the way government runs things that have removed investors faith in investing in the USA. If you put someone who doesn’t know how tariffs work, (they are an import tax.), it shows up when there are more sellers than buyers for Federal Bonds,(which is how America funds itself when spending more than it earns,) and you have to pay them higher interest rates on those bonds. And if trust in the running of the economy is weakened further, the US Dollar goes down in value. Usually these two things cancel each other out, but Frump has destroyed so much trust in the way the US economic systems work that they are, for the FIRST TIME EVER, happening together.
He, himself, is directly to blame for interest rates being high.
It is the direct cost to EVERYONE of his incompetence and ignorance.
If anyone else posted this vitriol on social media the guys in white suits would come and take him downtown for a psychological evaluation. He’s a disgrace and shouldn’t be walking the streets, let alone running the country.
Think back to the first Trump term and the economy Obama handed to him. It’s true that virtually all who caused the mess Obama inherited got off the hook but he got things back on track. However for a lot of working class folks the benefits of the overall economy weren’t being felt and it sparked resentment Trump recognized. He rode that resentment into the WH but at that point the fed was essentially keeping the prime rate at zero or nearly so. Rates needed to be raised and should have been but Trump raised all kinds of hell at the very prospect. I thought then and still do he browbeat the fed into keeping them artificially low.
Bumping up the prime rate wouldn’t just affected mortages but things like car loans and middle/working class resentment would have been even worse. Besides so many figured, a ‘successful businessman; was President and surely he was an expert on economics. So the fed allowed itself to be bullied which mitigated the impact of his big tax cut. Then Covid hit and the fed had nowhere to go when it came to using interest rates (reductions) which are its primary tool to address problems.
Powell and the rest at the fed are doing what they should have done during the first Trump term – ignoring him and trying to make sound decisions.
You know, if Drumpf REALLY wants to “Make America Great Again” which seems to me means little more than “Take us back to the 1950s,” then I’ve got the perfect solution for him to do it: Restore the top tax rate to where it was when America was so “great.” I mean, the top federal tax rate in 1960 was 91%. Just imagine how much money would be flowing through the US economy if folks like Elon Musk and Jeff Bezos were having to pay 90% of their “income” and/or “profits” and live off a meager “10%” of what they currently havec.
But, that’ll never happen. Nope. Just charge a “tariff” of 100% on something coming in from China and ends up selling at Walmart for triple its actual value so that Walmart (and any other middlemen) can make a bit of a profit. And who’s paying that actual price (including the tariff)? The consumer. The “little guy.” Certainly NOT China.