Why Is Trump Screaming at Powell?

It’s June 2025, and Donald Trump is on his 17th social media rant in two months—this time calling Fed Chair Jerome Powell “Too Late先生” (a nickname he invented). He claims Europe has cut rates ten times; we’ve done nothing. No inflation, booming economy—why not slash rates by two full points?

I’ll admit: this feels like watching a very expensive sitcom. A former president screaming at an unelected bureaucrat over interest rates. But beneath the theatrics lies real tension.

The Debt Bomb Ticking Under Washington

Trump wants lower rates to slash U.S. government borrowing costs. His math? Cut rates by 2% → save $80 billion annually. That sounds good—until you realize it’s based on assuming markets won’t panic.

The truth? Lowering rates prematurely risks inflating asset bubbles and reducing demand for Treasuries—pushing yields higher, not lower. It’s like trying to cool a fever by turning up the heater.

What Does ‘No Inflation’ Actually Mean?

Trump keeps saying “inflation is gone!” But data tells another story: core PCE remains above 3%, while energy prices are volatile due to global tensions.

Meanwhile, labor markets hold strong: unemployment stuck at 4.5%, wages rising 4% year-on-year. GDP shrank slightly in Q1—but that was mostly due to inventory corrections.

Powell isn’t ignoring reality—he’s waiting for hard evidence of economic slowdown before acting.

The Power Struggle Behind Closed Doors

Let me be clear: this isn’t just about macroeconomics—it’s political theater. Trump pushed tariffs that raised import costs, then blames Powell for not fixing them via rate cuts. He wants stimulus after fiscal expansion—but that breaks one of central banking’s golden rules: monetary policy should respond to conditions, not create them.

Yet here we are—political pressure meeting institutional independence—and neither side seems ready to blink.

What Experts Really Think (Spoiler: They’re Divided)

Not everyone agrees with Trump:

• Fed Vice Chair Goolsbee: “We’ve seen no clear inflation spike since tariff rollouts.” — Suggests room for early easing.

• Fannie Mae CEO Pulte: “Our housing market needs relief now.” — Blames high rates on Fed inaction.

• Cox (Harris Financial): Predicts soft landing but expects July/September cuts based on labor cooling signs.

But most economists warn against premature action:

“Cutting too soon fuels inflation expectations—and erodes trust in the Fed’s mandate.” — Gregory Daco, EY Chief Economist

The consensus? Two cuts in late 2025 likely—but only if job growth slows significantly without wage spikes or price surges.

So Why Not Just Wait?

Because markets hate uncertainty more than anything else—and this war of words fuels it daily.

When leaders attack institutions publicly, they risk undermining confidence in the dollar itself—not just rate decisions but long-term stability.

And yes—I’m aware I sound like a broken record repeating ‘wait for data.’ But that’s exactly why central banks exist: to be boring when chaos demands boldness, to stay calm when politicians scream, to do what’s right—not what’s popular.