News alert. Housing still unaffordable. Powell asserts he won’t quit, and can’t be fired.

[i]Photo above - when I see a bureaucrat posing in front of a giant wall of flags, I always suspect skullduggery might be at work. And notice the official Federal Reserve pennant (blue), which is being flown at the same height as the stars and stripes. Isn't this illegal?[/i]

Jerome Powell took to the podium yesterday. Paraphrasing his remarks: I will never quit, and I can't be fired.

If reporters also asked any questions about why the Fed's obsession with high interest rates didn’t make housing affordable, the media failed to report on that. “I can’t be fired!” See link below.

You have to admire Powell’s chutzpah. First, for not mentioning that Trump has NEVER once threatened to fire him. And for glossing over the fact that Trump is actually the president who nominated him to be Fed chairman in the first place. "I can't be fired!" Yikes!

The closest Trump EVER came to firing Powell was in 2020, when the president simply said: “the US central bank is behind its global peers in the fight to come back (from Covid 19), and we should be leading." Notably, trump did not threaten to fire Powell, or have him arrested, or shot with 9 bullets, or even hold congressional hearings (democrats did that).

Clearly Jerome Powell was traumatized by Trump's criticism 4 years ago, and he mulls it over it to this day. Hence, his attitude toward voters and economic realty. "I can't be fired!"

How do we know that Trump was right, and Powell was wrong in 2020? Because immediately after getting called out by the president, Powell announced a 50 basis point rate cut. And again because when Powell tripled interest rates in 2022, that increase had zero impact on inflation. In fact, housing, automobiles, food, electricity and other essentials actually went HIGHER.

So there’s perhaps room for Powell to display some humility, no? He might have said something like: “Congratulations to the incoming president. I look forward to meeting his new team of economic advisors, and exchanging ideas on how we can improve living standards for all Americans.”

Instead we got “I can't be fired!"

Before anyone loses their mind over legal minutiae here, let me agree: current interpretations of the Fed Chairman tenure rules suggest there is no easy way to fire Powell. He’s possibly the only government official who can’t be fired, impeached, or simply transferred laterally to a position where he does less damage. Powell is unique in that regard.

I’ll make a deal with you, loyal readers. I will agree to support a constitutional change to use the popular vote instead of the electoral college to decide presidential contests. If - in return - you will agree to support a law that no appointed bureaucrat is exempt from being fired, no matter what he does. Deal?

I’m just sayin’ . . .

Powell says he won’t resign for Trump, can’t be fired

SunshineGirl · 36-40, F

You really do not want politicians interfering in monetary policy, it never ends well. Even if Trump has made no direct threat, it is as well for Powell to remind him of his independence.

SusanInFlorida · 31-35, F

@SunshineGirl so your theory here is that Jerome Powell is NOT interfering with monetary policy? when he yanks rates up and down without any discernable benefit for citizens, or impact on inflation?

SunshineGirl · 36-40, F

@SusanInFlorida Central banks deal with monetary policy, politicians with fiscal policy. There are few levers available to the former and it is essential that they are not pulled by politicians seeking short term solutions. Central banks make collective decisions based on long term vision of global economic trends that few politicians have the time or technical competence to acquire.

Inflation in the USA is 2.4% (down from a recent peak of 9.1%). That reduction has been achieved without a recession or major job losses. We may argue over the timing of central bank decisions, but overall it shiws that conventional monetary policy has succeeded in the USA as it did in most other major economies. Contrast this with Turkey where President Erdogan took the less conventional view that inflation could be countered by lowering interest rates and pressured bank officials to make decisions that were popular but economically ruinous. Official inflation (almost certainly understated as the president interferes in statistics too) now stands at 48.6% and unemployment at at 8.5%.

This is why a central bank must be independent of politics.