Despite all evidence to the contrary, President Donald Trump remains convinced he is the smartest guy in the room. So why not just let him be the chair of the Federal Reserve? Surely nothing could go wrong with having a mercurial toddler simultaneously being president and running the central bank, right?
Trump is furious with Federal Reserve Chair Jerome Powell because on Wednesday, the Fed announced it would be holding interest rates steady at 4.25%-4.5%. Trump wants those rates lowered for reasons he can’t really articulate, but it’s basically a mishmash of personal attacks on Powell and insisting that tariffs are great and have already fixed the economy.
So he took some time out on Wednesday at the White House to unleash his wrath:
And then there’s the part where he ruminated about how maybe he should just appoint himself chair of the Fed, saying “Maybe I should go to the Fed” and wondering aloud about his power to do so: “Am I allowed to appoint myself at the Fed? I’d do a much better job than these people.”
Sure, Powell has decades of experience in government, law, and finance, which is a pretty standard background for Federal Reserve chairs. But hey, Trump got a BS in economics in 1968 at Wharton, though no, you can’t see his transcripts, thank you very much.
You’ll just have to take it on faith that Trump understands the economy best of all, despite that his economic policies are slowing job growth and his will-he-won’t-he tariff game is destabilizing the economy. The nonpartisan Congressional Budget Office found that Trump’s tariffs would indeed reduce the federal deficit by $2.8 trillion but would also shrink the economy.
The CBO also found that inflation is projected to rise 0.4% in both 2025 and 2026, which reduces the purchasing power of people and businesses. Increased tariffs will also make goods more expensive, and the CBO also expects that overall, average real income will decrease. Also, though tariffs will increase federal revenues, the CBO found that federal outlays “will more than offset the increase in federal revenues.”
Okay, so at best, the tariffs lower the deficit, but do so by basically making things worse for everyone. To be fair, lowering the deficit by $2.8 trillion is no small feat, but given that the CBO also says that Trump’s “Big, Beautiful Bill” is about to blow a $2.4 trillion hole in the deficit so Trump can give more money to rich people, so the one possible benefit of tariffs is kind of a wash.
Trump doesn’t care about any of that or even understand it. Tariffs are magic and will fix everything, as will his tacky gold card, which lets you pay $5 million not for citizenship, but just for a “path” to citizenship.
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As far as Trump is concerned, Powell is standing between America and prosperity because he refuses to cut interest rates to the level Trump wants. He’s been threatening to remove Powell since last November, before he even took office. By April, he was resurrecting his first-term stupid nickname of “Too Late Jerome Powell” and writing screeds on Truth Social about how “Powell’s termination cannot come fast enough.”
Because Powell won’t just take orders from Trump, Trump is now complaining that Powell is a “stupid person” and a “political guy who is not a smart person.” Of course, Trump appointed Powell, but since Trump will never take responsibility for his own actions, he’s been mad at former Treasury Secretary Steven Mnuchin for years because he backed Powell, and is also now sure that Powell is a Democrat.
For all Trump’s sound and fury, the Supreme Court has already tipped its hand that it would not let him remove the chair of the Federal Reserve. Sure, they’ve let him run roughshod and remove agency heads and commissioners even when he doesn’t have the authority to do so, but they made a very special carve out for the Federal Reserve.
Unlike all the other agencies Trump gets to decimate, the Federal Reserve, per the Supreme Court, is a “uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks.” Translation: Trump can pretty much fire anyone he wants except Jerome Powell.
With that decision on the books, it seems like a slam dunk that if Trump tries to remove Powell, the court will use its brand-new explanation of the Federal Reserve to say he can’t do that. But that was before Trump floated the idea of just taking over the Fed himself. Are there five justices who are that eager to let Trump keep expanding his power and would step aside if he installed himself as the chief economist for the nation? Lucky us, we might get to find out!