Firing her would serve him politically: he would be able to appoint three Governors to the Fed, which would allow him to control the Fed more so. Given Trump's motives and political desires, that would cause economic calamity no doubt.
Port Carverton wrote:https://www.theguardian.com/us-news/live/2025/aug/22/donald-trump-administration-federal-reserve-republicans-democrats-us-politics-live?filterKeyEvents=false&page=with%3Ablock-68a883d08f088233182d43f1#block-68a883d08f088233182d43f1
Powell signals potential rate cut after weak job dataPowell nods to a possible US rate cut next month
Joanna Partridge
Joanna Partridge
Signalling that the Federal Reserve could restart interest rate cuts, its chair Jerome Powell said the US economy had “faced new challenges” over the past year.
Focusing on inflation - Powell said Trump’s tariffs had “begun to push up prices in some categories of goods”.
He added he expected the effects of tariffs to “accumulate over the coming months, with high uncertainty about timing and amounts.”
Powell also said: “Tighter immigration policy has led to an abrupt slowdown in labour force growth.”
Some of the changes to tax, spending and regulatory policies brought in by the Trump White House could also have “important implications for economic growth and productivity,” he said.
Changes in trade and immigration policies are affecting both demand and supply. In this environment, distinguishing cyclical developments from trend, or structural, developments is difficult.
Powell’s speech did not mention the political pressure he, and the Fed, have been under in recent months, after Trump repeatedly threatened to fire him, which has raised questions over the independence of the central bank.
Instead, he repeatedly mentioned the central bank’s mandate “to foster maximum employment and stable prices for the American people” and said the Fed remained “fully committed to fulfilling our statutory mandate”.
Rate cuts will come, but they will likely be slow. It will probably be one or two cuts by the end of the year, far from what Trump wants. Either way, the economy is going to enter a recession given things are slowing down. The question becomes, when will that be?
