And what might Trump’s answer be to this economic havoc? To fire Powell. His attacks on the Fed chair have been growing over the past week—on Monday, he wrote on Truth Social that “there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW”—and National Economic Council Director Kevin Hassett has confirmed that Trump is considering firing him. Should Trump do so, it may not be as catastrophic as his tariffs. But it nevertheless shows that Trump has learned nothing from his disastrous trade war, and that he is determined to enact maximum economic destruction on America.
When Trump backed down on the trade war on April 10, pausing tariffs on most of the world except China, markets breathed a sigh of relief. There was a hope that he had learned his lesson and would ultimately return to the laissez-faire economic management that defined most of his first term. That was a ridiculous conclusion to draw then, and it’s even more absurd now that Trump might fire Powell—the very possibility of which has sent the markets spiraling further.
Of course, firing Powell won’t accomplish that. Trump himself can’t be chair, and there is no guarantee that a new chair appointed by him would do what he wants, which is to slash interest rates—or, for that matter, that slashing interest rates would improve the economy in the short term, let alone stave off a recession. Trump could remove Powell, in other words, and nothing much would change. Even if a new chair was determined to try to soften the blow of Trump’s tariffs—Fed board member Kevin Warsh, a loyalist and trade war enthusiast, has been floated—the larger economic situation is so bad it’s possible there would be no substantive result. Even if the Fed did lower interest rates, there’s no guarantee that other rates would fall—or, for that matter, that doing so would offset the damage of Trump’s ongoing trade war. The yield curve is just that bad right now.
I can’t speculate what the long-term effect of firing Powell on the markets or the economy would be. But even if it is minimal, which seems more than possible, the fact that Trump has looked at the gyrations of the last six weeks and decided that he should have more power and control over the economy should be alarming for everyone. Having experienced the profound fallout from leveling a massive, apparently ChatGPT-generated series of tariffs on nearly the entire world, Trump has come to the conclusion that the real problem with the economy is the chair of the Federal Reserve.
That Trump is incapable of personal growth or self-reflection is, like his feud with Powell, hardly new. It is the basic fact of his personality and at the heart of his political appeal: He never says he’s sorry and always finds a scapegoat. But the consequences of his actions have never been more profound or catastrophic. Trump narrowly avoided economic Armageddon two weeks ago, and already he’s tempting it again.
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