Trump is not happy with the Fed’s decision to hold rates steady today. 
Trump Slams Fed
NBC reports Trump Slams Fed After Decision to Hold Interest Rates Steady.
President Donald Trump took Federal Reserve officials to task after they left interest rates unchanged following their first policy meeting since he resumed office.
“Because Jay Powell and the Fed failed to stop the problem they created with Inflation, I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing,” he wrote on his Truth Social platform, referring to Federal Reserve Chair Jerome Powell.
“If the Fed had spent less time on DEI, gender ideology, ‘green’ energy, and fake climate change, Inflation would never have been a problem,” he said.
Trump on Truth Social
Because Jay Powell and the Fed failed to stop the problem they created with Inflation, I will do it by unleashing American Energy production, slashing Regulation, rebalancing International Trade, and reigniting American Manufacturing, but I will do much more than stopping Inflation, I will make our Country financially, and otherwise, powerful again! The Fed has done a terrible job on Bank Regulation. Treasury is going to lead the effort to cut unnecessary Regulation, and will unleash lending for all American people and businesses. If the Fed had spent less time on DEI, gender ideology, “green” energy, and fake climate change, Inflation would never have been a problem. Instead, we suffered from the worst Inflation in the History of our Country!
Plenty to Blame the Fed For
There’s plenty to blame the Fed for, but Climate Change isn’t one of them, nor is the decision to hold rates steady.
The Fed destroyed the housing market with inept QE policy coupled with holding rates too low too long. Those are repeat policy errors.
But the Fed has spent zero time on climate change, telling Elizabeth Warren it was not part of the Fed’s mandate.
Post-FOMC Press Conference
I listened to the Post-FOMC press conference and reporters asked Powell at least six questions regarding Trump’s policy.
Powell refused to answer a single question about what immigration, tariffs, or budget deficits might do to inflation.
Powell gave one reporter a “mulligan” and told him to ask another question. The rest got boiler-plate answers on inflation slowly coming down.
Trump Knows More Than the Fed
“I know interest rates much better than they do,” Trump said last week of Fed officials — shortly after telling the World Economic Forum in Davos, Switzerland, by videoconference that he’d “demand that interest rates drop immediately.”
I discussed the Davos command on January 23: Trump “Will Demand Interest Rates Drop Immediately”
Trump fails to understand that unless the Fed corners the entire bond market, long-term interest rates will rise if the Fed cuts rates prematurely.
Yield on the long end of the curve and mortgage rates have both risen about a full point since the Fed started cutting rates.
On January 28 I noted New Orders for Durable Goods Down 4 of 5 Months, Autos Down 6 of 7 Months
And on January 29 Trump Announces New Tariffs on Computer Chips and Semiconductors
Those posts are all troubling. One cannot “demand” lower interest rates and expect to get them.
And going after Taiwan is a serious policy error. It’s not like we can get advanced chips anywhere else. US customers would pay more than anyone else in the world for chips, and computers too.
If Trump wants interest rates to come down, he is going to have to reduce the budget deficit. The bond market doesn’t believe that and neither do I.
Unfortunately, Trump’s knowledge of monetary policy equals the capacity of the two DEI hires Biden elected to the eminent Fed Board.
If the Fed were a government agency, they would have to abandon their Opportunity & Inclusive Growth Institute in Minneapolis, Neel Kashkari established in 2017. At that time, Senator Pat Toomey had criticized Kashkari for politically embracing social causes far outside of the Fed’s statutory mandate. The true intent of their DEI Institute was to keep interest rates at inflationary zero, long after unfilled jobs outnumbered the unemployed. Kashkari’s Inclusive Growth Institute factors the percent of workers within minority communities, as part of the Fed’s maximum employment mandate.
Lael Brainard’s speech at the Institute’s inauguration highlighted the Fed’s intent to keep rates low, even though the economy had reached full employment: “In fulfilling its dual mandate, FOMC has set a target of 2 percent for inflation but does not have a similarly fixed numerical goal for maximum employment. That is because the level of maximum employment depends on non-monetary factors that affect the structure and dynamics of the labor market… Inclusion is an enduring goal of public policy that is embodied in our maximum employment mandate… maximum employment is inherently an inclusive goal.”
The Institute’s objective allowed the Fed to continue its 10-year zero-rate experiment it began in 2014.
Low rates are inherently inflationary, which has been severely detrimental to lower economic households. Many of these households are composed of minority communities, that the Fed’s DEI Institute was purported to support, with its low-rate policy. Trump’s wish to return to the low rates of his first term will only exacerbate inflation and harm lower economic households.
Have I told you lately that I love your courage and intellectual honesty?
Donald Trump is not someone who knows what he does not know, studies issues, and takes advice from people who have spent their entire lives deeply understanding a particular issue. Think about this! What large organization would hire someone with these qualities to lead that organization? That answer is pretty simple, but Donald Trump is not hired after an objective and rational hiring process. This is politics were talking about. But the problem with this is that a President like Donald Trump has no respect for the organization that he leads, the politically charged rhetoric that he peddles, and when dealing with the rest of the world, Donald Trump is not someone who values a win/win solution, in his world all negotiations are win/lose and for him winning is all that matters regardless of how much damage is done achieving that outcome.
The organization is corrupt. Who should have respect for a corrupt organization? Every election the politicians call each other the scum of the earth, then congratulate the winner. Trump is far from the first with politically charged rhetoric. The 7 government overthrows in 5 years was not a win/win plan. It was a victor take all plan. Bush Jr. and Obama both participated. Trump is disrupting the status quo. The bipartisan establishment opposes that. It also was Obama, who first set out to as he said, to fundamentally change America. Trump is the response to that.
I think you are correct about that.
What don’t you understand about a peaceful transfer of power? Of course the norm is that you fight it out during the campaign, but for the most part prior to Trump low blows and personal insults were the exception, and then once the election results are in they are accepted, respected, and the the outgoing administration makes the transition as smooth as possible. Obama was the first African American President and he was born at the tail end of the Baby Boom Generation. He was still a kid when the civil rights movement was “fundamentally” changing society. He was a young man as women gained significant legal and reproductive independence. Plus, he was politically active when non-discrimination and other equal right rights protections were extended to the LBGTQ population. All of these expanded rights and protections came about early in his life and they were indeed fundamentally changing our nation, just like freeing the slaves and giving women the right to vote did 75 and 100 years earlier. But as we know from history, being granted rights legally and having society fully accept those rights are two very different things. This is what I believe candidate Obama was referring to.
Shocking that he lacks this understanding.
Ok no it’s not.
It’s shocking that we would expect a president to have a basic command of these things.
Dunning Kruger effect FTW !
Dont fight the fed. Trump wants zero interest rates and he will get zero interest rates. There are a dozen reasons why this country and this world cannot service the debt from the last few years (currently at $300 trillion worldwide). No politician wants government money to go to interest for past politicians spending. Todays politicians want to spend money on their priorities NOW, not spend the money on interest for past politicians’ borrowing.
If you want ZIRP to come back you will be sorely disappointed. The Fed only influences short term rates. Who the Hell is going to accept zero as a long term yield in an age of inflation? This inflation shows no sign of being transitory whatever Powell might once have said. Bet on higher rates for longer.
Good grief! The Fed FOLLOWS the 3 month T-bill rate. They NEVER lead rate changes, they simply react to what has already happened.
For the life of me, I can’t understand why people who should know better subscribe to the fantasy that the Fed is all powerful when it comes to setting interest rates!
For the sake of your loved ones, I hope a professional is handling your retirement planning
Oh yeah, that’s what I need. An “expert” who, like you, can’t read a line chart.
My evidence can be found in the chart at this link (assuming you can read a chart). https://www.dropbox.com/scl/fi/rfm45ppxokpul4rm8cq4g/FF-and-3MonthTB.png?rlkey=ukkmmgsfhvy79idhaucywh0qf&e=1&dl=0.
Powell had as much vinegar today as an Allan Greenspan deadpan.
Almost fell asleep listening to him.
Fed as always drives by looking thru rear view mirror..
Fiscal spending party is over and there is little gas in consumers economic tank.
Interest rates are peaking with a sluggish economy.
Bank of Canada ended QT and will start buying again.
US not all that far behind. Powell believes everything is great. It is not.
Powell behind the curve so am expecting market rates to soften in 2025.
Going to still be some time for Trump cheaper energy to kick in putting some spending power back into consumer wallets..
Just wait until we replace Powell with Hulk Hogan. That guy can put on a show!
Wait until we replace Sonia Sotomayor with Kari Lake.
IT would be more fun with the Hulk. I think that the entire Fed should don Masks and show us some live Professional Wrestling. I would get a kick out of Powell being pile-driven on to his head!
I know what people WANT!
Hopefully SOMETHING gets cheaper. We are surrounded by 7 different Young Families: Our Sister’s and Brother’s Kids (5 from Bro, 2 from Sis) and all of those Primary Kids are Gen-Xers who had two to three kids each. We are talking then 7 Family Units and then we have MANY other close personal friends. ALL of the kids are up to their ears in Debt and our Sister and Brother are getting calls for short-term Loans that will never be paid back. Three of the Nephews and Nieces are barely making ends meet. Two of them are SUPER-EARNERS and you can see the vast Socioeconomic spending differences with the richer kids traveling to Europe and buy season tickets. THE POOR ONES are clearly struggling with Inflationary Spiral costs killing their budgets.
The dollar is strong against every major currency.
Imagine the trade deficit when the dollar weakens.
Trump wants low interest rates because the Federal government/We the people can not bear $1+ Trillion yearly debt servicing.
J. Powell is not smart enough to tend a cash register. He gives 98 cents change for a dollar every year.
How are YOU getting 98 cents?? The past two years, it has been 85 cents back on each dollar in spending power.
So Mr. Trump said “If the Fed had spent less time on DEI, gender ideology, ‘green’ energy, and fake climate change, Inflation would never have been a problem,” All true, and perfectly stated and obviously “Spot On”
As a result of this “Epic Failure” Within and At the Top of Our Government, Trump is not happy with the Fed’s decision to hold rates steady today. This undeniable failure, is the sole reason for “Inflation” and hence “Rates Held Steady”
I personally think Donald Trump AND The American Citizens, Should ALL be unhappy about this waste of Taxpayers $$$ and now impeding “Vital Progress” from being able to be achieved. I’m pissed off myself about it, knowing what I now know.
– There’s plenty to blame the Fed for, but Climate Change isn’t one of them, nor is the decision to hold rates steady.
> The blame is on the past Administrations epic failures, now getting in the way of the Fed, being able to make decisions that would have extremely beneficial outcomes. They have to do this, but why did they allow it to get this bad, to place themselves into this position, in the first place. “Piss Poor Decision Making” that’s what… So Trumps Pissed about it!
Get rid of that debt ceiling and bring back the free money! My crypto account hungers.
Nah, the last Administration tried that, and accomplished nothing but higher inflation…
Musk who?
I AM YOUR RULER!!
Rat?
Just add that to the long list of what Americans overpay for these days: healthcare, pharmaceuticals, housing, food, cars, insurance, government, etc. It’s almost like if you want a high quality of life, you need to exit and go where there’s young vibrant people eager to work. Go where you are treated best.
Lots of interesting news today. Tesla revenue drops 8% and I expect it to drop more now that Musk has “outed” himself for who he is….
Meta reality labs loses $5 billion.
Great pic of Trump trying to stop the sea, very fitting but he should have been dressed like a clown to complete the picture. I think I’ll go play with AI and create a fitting image.
I think 2025 is going to be quite nasty to the Mag7.
Bernie had a good idea: Pharma companies should be prohibited from charging more for a drug in the US than 110% of the lowest price they charge in the rest of the world. Hospitals and doctors should be prosecuted for charging different amounts based upon whether the patient has insurance.
Why do that? People under threat of death are motivated… they’ll figure something out. Perhaps avail themselves of one of the many credit opportunities that are available to the serf class.
The yield on the 10 yr bond is challenging 52 week highs. The Fed couldn’t justify going against the bond market. The Fed is still hurting form the October whiplash when they thought yields were heading lower instead of a significant rally. If yields are challenging 52 week highs, shouldn’t the Fed RAISE interest rates back to the levels where they were during the 10 yr yield 52 week high?
The ten year is down about 30 bps from a month ago. I don’t know whether the Fed should cut now. They’ll probably be too late in cutting like they were too late in raising. Deficit spending is the primary cause of inflation.
Trump is not blaming the Fed for climate change, but for focusing on it, which they have.
See: Climate Change and Financial Stability, Feds Note, March 19, 2021.
See: The Fed exited the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), which was created in 2017 to help facilitate the advancement of green finance and climate policy. January 17, 2025.
It’s silly to blame the Federal Reserve for all our financial issues. I don’t understand why we can’t have a discussion about the real culprit. That is Congress. After all, the Fed was created by Congress, and they have manipulated and changed the Fed’s mission over the years to support Congress’s insane desire for more money.
Initially, the Fed’s mission was as a bank of last resort. One of the tools at their disposal was buying corporate bonds to help stabilize the economy during rough economic times. Additionally, when the Fed was created, the US was basically debt-free. So, buying corporate bonds indeed would be stabilizing. Now, the US is the largest debtor. Also, Congress changed what the Fed could buy early after the Fed’s creation and mandated that they buy only government debt since World War One needed financing. This was supposed to be a temporary change; nothing in DC is temporary. Congress saw how easy it was to create money through the Federal Reserve, and it continued to rack up more and more debts and kept the mandate of buying only US debt.
Congress is the beast that manipulated the nation to the insane debt we have today. We really need term limits in Congress so members don’t have enough time to drown the nation in more and more debts.
I will 100% agree with “Term Limits” and would be willing to discuss “Age Restrictions” of some sort (Ex. over x age before term would be up), but discuss…
A well deserved bashing for secondary pretext.
The ZIRP train wreck isn’t worth a mention?
We’re going back for seconds.
You’re defending the Fed’s position? Lol.
What are you defending?
Do you think inflation is too high (which necessitates a higher Fed funds rate) or too low?
As Mish has rightly written numerous times the Republicans are going to blow the defect to new highs
“President Trump said he is signing an executive order on Wednesday to prepare a massive facility at Guantánamo Bay to be used to house deported migrants.”
https://thehill.com/homenews/administration/5113897-trump-guantanamo-bay-migrants/
We took all the republican congressmen to Trump’s resort the other day. He made a good bit of money… funny how he gets so focused on 10 million or so.
Fed made a political decision to cut rates in September when there was absolutely no case to do. Thus they are fair game now. Tough break.
They must cut, and cut again! I’ll have Powell out of there if he’s reticent. My crypto bets are in place.
… oh and Donald want’s me to tell you all to buy $meliana.
Last Administration…
Why the hell do you even bother?
You are the very definition of a troll.
C’mon man, he’s the most obvious troll ever, and he’s pretty funny! Roll with his silliness!