Fed Chairman Powell admits that his 2025 rate decisions are simply a feud with Trump, and have nothing to do with current economic conditions.

Photo above – NYPD detectives Jimmy Smits and Kim Delaney try to determine if inflation is really dead, and whether Jerome Powell is the perp.

You gotta love Fed Chairman Jerome Powell. He always tells the truth. Even when he doesn’t understand how crazy it makes the Fed look. Case in point – Powell says he won’t cut rates because of “Trump’s tariffs”. (see link at bottom).

Before we take Powell to the woodshed, let’s review what his Fed rate hikes (implemented during the Biden administration) were supposed to do:

1 – Curb inflation. Okay, check this one off as mission accomplished. The inflation rate has dropped from 7% (2021 and 2022) to 2.4% today. You deserve a medal, Professor Powell!

2 – Help make housing affordable again. Okay . . . this a complete failure. Housing starts are at their lowest level in nearly a decade. But then higher mortgage rates always cause home construction to tank. Mr. Powell, give back the medal you received above. And there’s no reason to believe that if you continue to torture home buyers with the highest mortgage rates in a decade that things will get any better.

3 – Increase unemployment. Stop screaming, you amateur economists with humanities degrees! How do you think curbing inflation works? When you make consumption more difficult that throws people out of work. Unemployment is rising now; it was 3.6% in 2023 but it's 4.1% today. That means 25% more people are jobless. How high will unemployment have to go before Mr. Powell, is satisfied? Does he even personally know anyone out of work?

Okay, so far Chairman Powell looks like he should take a remedial summer course in economics, to improve his understanding of how money works.

Let’s get back to Powell's inadvertent admission that Fed Rates are about Trump's tariffs. There’s two problems with this [Unwelcome language removed] and bull story. First, America had minimal tariffs when the Fed began hiking rates. Second, there is zero evidence – from the federal government itself – that Trump’s tariffs are about to cause inflation, or a massive increase in hiring. Think about this for a moment. New car sales are off 20% compared to the first quarter. Yet prices are NOT skyrocketing. Automakers – especially in Asia and Europe – are “rethinking” their pricing strategies. Geeze . . . maybe Trump got this one right. Rich corporations actually CAN swallow some tariffs without going bankrupt. Even I was skeptical about this, but the numbers so far don’t show we're falling off a cliff.

There’s another Fed announcement expected today. Nobody knows what Powell will say. Maybe down, maybe up, maybe sideways. Chairman Powell, like Chairman Mao, likes to appear inscrutable. But is there any other Federal agency which is allowed to concoct plots behind closed doors, and refuse to tell anyone what they have in mind? Other than the department of defense, I mean . . .?

I’m just sayin’ . . .

Trump's tariffs kept Fed from cutting rates, Jerome Powell says