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Trump and Powell feud explodes in public

Trump-Powell Feud Escalates into Full-Blown Public Spectacle Amid Economic Tensions

In a dramatic escalation of long-simmering tensions, former President Donald Trump has once again launched a blistering public attack on Federal Reserve Chair Jerome Powell, accusing him of political bias and incompetence in managing the U.S. economy. The feud, which has roots stretching back to Trump's time in the White House, exploded into the open this week with a series of pointed remarks from Trump during a high-profile interview, reigniting debates about the independence of the Federal Reserve and the intersection of politics and monetary policy.

The latest chapter in this ongoing saga began when Trump, speaking on a popular business news program, directly blamed Powell for what he described as disastrous economic decisions that have hampered growth and fueled inflation. "Jerome Powell is a disaster," Trump declared emphatically. "He's playing politics with our economy, and it's hurting the American people." Trump's comments come at a particularly sensitive time, as the Fed grapples with persistent inflationary pressures and debates over interest rate adjustments. Powell, appointed by Trump himself in 2017 but later reappointed by President Joe Biden in 2021, has steadfastly defended the central bank's actions as data-driven and apolitical.

To understand the depth of this feud, it's essential to revisit its origins. During Trump's presidency, he frequently clashed with Powell over monetary policy. Trump, known for his preference for low interest rates to stimulate economic growth, repeatedly pressured the Fed to cut rates, even going so far as to tweet criticisms and threaten to fire Powell—a move that would have been unprecedented and legally questionable, given the Fed's statutory independence. In 2018, for instance, Trump publicly lamented that Powell was "not even a little bit accommodating" and compared him unfavorably to his own Treasury Secretary. These outbursts were seen by many economists as an assault on the Fed's autonomy, which is designed to insulate monetary policy from short-term political influences.

Powell, for his part, has maintained a composed demeanor throughout these attacks, emphasizing the importance of the Fed's dual mandate: maximizing employment and stabilizing prices. In recent public appearances, including testimony before Congress, Powell has reiterated that decisions on interest rates are based solely on economic data, not political considerations. "Our focus is on what's best for the economy," Powell stated in a recent press conference following the Fed's latest policy meeting. This stance has earned him praise from bipartisan quarters, with supporters arguing that his steady hand helped navigate the economy through the COVID-19 pandemic and its aftermath.

The current flare-up appears tied to broader economic anxieties. With inflation hovering above the Fed's 2% target and unemployment rates ticking upward, Trump has seized on these issues to criticize the Biden administration's handling of the economy, lumping Powell into the mix as a holdover from his own era who has since "gone rogue." Trump specifically pointed to the Fed's aggressive rate hikes in 2022 and 2023, which he claims stifled business investment and contributed to a slowdown in growth. "If I were in charge, we'd have rates at zero, and the economy would be booming," Trump asserted, echoing his past calls for ultra-loose monetary policy.

Analysts suggest that Trump's renewed attacks may be strategically timed. As the 2024 presidential election looms, economic issues are poised to dominate the campaign trail. Trump, positioning himself as a potential candidate, is leveraging dissatisfaction with the current economic landscape to rally his base. Polls indicate that a significant portion of voters view inflation and high interest rates as top concerns, and Trump's narrative frames Powell as a symbol of Washington insiderism that prioritizes global elites over everyday Americans.

This isn't the first time a president has tangled with the Fed, but the Trump-Powell dynamic stands out for its personal vitriol. Historical precedents include President Richard Nixon's pressures on Fed Chair Arthur Burns in the 1970s, which some economists blame for exacerbating stagflation. More recently, President Barack Obama maintained a hands-off approach, while Trump shattered norms by making his grievances public and personal. "Trump's style is to make everything a spectacle," noted one economic historian in commentary on the matter. "But this risks undermining confidence in institutions that are crucial for economic stability."

The implications of this feud extend beyond rhetoric. Financial markets, already jittery amid recession fears, reacted modestly to Trump's comments, with slight dips in stock indices as investors weighed the potential for increased uncertainty. Bond yields fluctuated, reflecting bets on future Fed actions. Economists warn that persistent political interference could erode the Fed's credibility, making it harder to control inflation expectations. "The Fed's independence is a cornerstone of modern economics," explained a senior fellow at a prominent think tank. "When politicians attack it, it plants seeds of doubt that can lead to volatility."

Powell's response has been measured, avoiding direct engagement with Trump's barbs. Instead, he has focused on upcoming policy decisions. The Fed is widely expected to implement a rate cut in the coming months, potentially as early as September, in response to cooling inflation and softening labor market data. Such a move could be interpreted by Trump as vindication of his criticisms, or alternatively, as evidence of the Fed's responsiveness to economic realities rather than political pressure.

Critics of Trump argue that his attacks are hypocritical, given that he appointed Powell and initially praised him. "You can't have it both ways," said a Democratic strategist. "Trump put him there, and now he's scapegoating him for problems that started under his watch." Supporters, however, see Trump's outspokenness as a refreshing challenge to bureaucratic inertia. "Finally, someone is holding these unelected officials accountable," a conservative commentator remarked.

The feud has also sparked discussions about the future of Fed leadership. If Trump were to return to the White House, speculation abounds that he might seek to replace Powell, whose term expires in 2026. Legal experts debate whether a president can remove a Fed chair without cause, with most agreeing it's uncharted territory that could lead to court battles. Powell himself has indicated he would serve out his term unless removed, underscoring his commitment to the institution.

Broader economic context adds layers to this drama. The U.S. economy, while resilient, faces headwinds from global supply chain disruptions, geopolitical tensions, and domestic fiscal debates. Inflation, which peaked at over 9% in mid-2022, has eased to around 3%, but remains a sore point for consumers dealing with higher costs for groceries, housing, and energy. The Fed's balancing act—tightening policy to curb inflation without tipping the economy into recession—has been lauded by some as masterful, but criticized by others, including Trump, as overly cautious.

In the public eye, this feud plays out against a backdrop of partisan divides. Republicans, aligned with Trump, often echo his calls for lower rates to boost growth, while Democrats defend the Fed's independence as vital for long-term stability. Independent voters, meanwhile, may view the spectacle as yet another example of Washington's dysfunction.

As the dust settles from this latest exchange, one thing is clear: the Trump-Powell feud is far from over. It encapsulates larger questions about power, policy, and politics in America. Will Trump's criticisms force a shift in Fed strategy, or will they reinforce the central bank's resolve to remain above the fray? Only time—and perhaps the next election—will tell. For now, the public spat serves as a stark reminder of how deeply intertwined economics and politics have become in the modern era, with figures like Trump and Powell embodying the clash between bold leadership and institutional caution.

This ongoing narrative not only highlights personal animosities but also underscores the fragility of economic governance in a polarized landscape. As markets watch closely, the hope is that sound policy prevails over spectacle, ensuring the U.S. economy's continued strength.

Read the Full DC News Now Washington Article at:
[ https://www.yahoo.com/news/articles/trump-powell-feud-explodes-public-132019836.html ]