Trump and the pressing rate cut

[Orpichukwu]

That option that the US president has to remove the Fed chair is limited, which means that a man like Trump – if there was much for him to do in his power – could have replaced Jerome Powell long ago instead of badmouthing him long ago, as that one is not on the same economic path. By law, Trump can only take action against him if he has done anything based on his own personal interest or is not effective on duty.

Wrong, another post by someone who does not live in the US or understand its law. Trump can remove Powell by tomorrow. This would cause a short term negative market reaction, which he does not want. That is the only reason why he does not do it. It has nothing to do with his ability to do it, he has the power to do it.

I don't need to live in the US to read about US law, and I also don't need to be a US citizen before I can read about "Humphrey's Executor v. United States (1935): Presidential Power and Independent Agencies", which was a clear case where supreme courts cleared the air of presidential power over independent agencies like the FED. Or has such a law been revoked in the US that I'm not aware of?

[coyhasmon]

That option that the US president has to remove the Fed chair is limited, which means that a man like Trump – if there was much for him to do in his power – could have replaced Jerome Powell long ago instead of badmouthing him long ago, as that one is not on the same economic path. By law, Trump can only take action against him if he has done anything based on his own personal interest or is not effective on duty.

Wrong, another post by someone who does not live in the US or understand its law. Trump can remove Powell by tomorrow. This would cause a short term negative market reaction, which he does not want. That is the only reason why he does not do it. It has nothing to do with his ability to do it, he has the power to do it.

I don't need to live in the US to read about US law, and I also don't need to be a US citizen before I can read about "Humphrey's Executor v. United States (1935): Presidential Power and Independent Agencies", which was a clear case where supreme courts cleared the air of presidential power over independent agencies like the FED. Or has such a law been revoked in the US that I'm not aware of?

You are asking bad AI agents for garbage information before posting, that is your problem and a problem of many people on this forum. You should not speak on the matters of US if your knowledge is very limited. The case just means that Trump can't dismiss Powell for not liking the way his nose looks or because the weather is very rainy today. In practice it means very little. It leaves a very open field on what for cause means, and they can easily argue this in many ways as it includes any number of things from incapacity, misconduct, neglect and so on it goes. The only practical difference is that Trump must make an argument for a cause, rather than just dismiss him at will without any recourse.

When at cause things are left open to interpretation they are mostly a formality and not a limit of power. It is not a clear case of anything and clearly you don't understand anything about the US.  

[Orpichukwu]

Wrong, another post by someone who does not live in the US or understand its law. Trump can remove Powell by tomorrow. This would cause a short term negative market reaction, which he does not want. That is the only reason why he does not do it. It has nothing to do with his ability to do it, he has the power to do it.

I don't need to live in the US to read about US law, and I also don't need to be a US citizen before I can read about "Humphrey's Executor v. United States (1935): Presidential Power and Independent Agencies", which was a clear case where supreme courts cleared the air of presidential power over independent agencies like the FED. Or has such a law been revoked in the US that I'm not aware of?

You are asking bad AI agents for garbage information before posting, that is your problem and a problem of many people on this forum.

It's only a lazy one that will rely on AI for such data that can easily be gotten with sources, especially in a digital era where constitutions can even be downloaded online.
Federal Reserve Act

You should not speak on the matters of US if your knowledge is very limited. The case just means that Trump can't dismiss Powell for not liking the way his nose looks or because the weather is very rainy today. In practice it means very little. It leaves a very open field on what for cause means, and they can easily argue this in many ways as it includes any number of things from incapacity, misconduct, neglect and so on it goes. The only practical difference is that Trump must make an argument for a cause, rather than just dismiss him at will without any recourse.

When at cause things are left open to interpretation they are mostly a formality and not a limit of power. It is not a clear case of anything and clearly you don't understand anything about the US.  

And if you read my first comment, you will also notice where I talked about such being part of the limited options the president has over the power to remove the chairman, which includes if he's not effective in his duty and if he's doing things based on his personal interest and not for economic benefit, then the president can present a case against him; if it's valid, then that can be used to remove a seating chairperson from office, and not just like he can seat and declare/replace him without any backing.

[coyhasmon]

You should not speak on the matters of US if your knowledge is very limited. The case just means that Trump can't dismiss Powell for not liking the way his nose looks or because the weather is very rainy today. In practice it means very little. It leaves a very open field on what for cause means, and they can easily argue this in many ways as it includes any number of things from incapacity, misconduct, neglect and so on it goes. The only practical difference is that Trump must make an argument for a cause, rather than just dismiss him at will without any recourse.

When at cause things are left open to interpretation they are mostly a formality and not a limit of power. It is not a clear case of anything and clearly you don't understand anything about the US.  

And if you read my first comment, you will also notice where I talked about such being part of the limited options the president has over the power to remove the chairman, which includes if he's not effective in his duty and if he's doing things based on his personal interest and not for economic benefit, then the president can present a case against him; if it's valid, then that can be used to remove a seating chairperson from office, and not just like he can seat and declare/replace him without any backing.

Mate, just give it up. You were wrong and continuing to fight a case as an outsider to the US will not abolish you from your errors. You read these things thinking that you understand it, but the words merely pass through your brain. The US is a very special place where things happen in certain ways, ways in which foreigners can not understand. That is why you believe that a for cause thing is anything else but a formality stamp. Quite the clown you are.  

[Wind_FURY]

Has anyone correlated this with the historical data that people have? Like past rate cut cycles and their effects, such as the 2008 crisis or those in the 1970s? The long-term impact on the economy could be devastating, and, as others have noted, it could trigger a market crash. I agree that it's better to have something to diversify into, like Bitcoin.

I tried,

Teal = Fed Funds Rate, Orange = CPI, Blue = Unemployment Level.

Observe that after the Federal Reserve's rate hikes, high unemployment peak followed a year at least later. It happened during Volker's time during 1983 and Bernake's time during 2009/2010. Powell's time is coming, let's observe what happens for the rest of 2023.

In this topic, https://bitcointalk.org/index.php?topic=5452045.0

What was obvious was when the Federal Reserve started cutting rates, it was probably a little late because the unemployment rate still surged, which also crashed the market. Maybe it's because the data that goes to the Federal Reserve's desk is a lagging indicator? Those data are based on what happened in the economy months before.

I forgot to include the S&P 500 in the chart though. You can check for yourself.

So if the Federal Reserve is usually late, then does THAT make Trump right to say that Powell should cut rates NOW?

   ¯\_(ツ)_/¯

[sana54210]

Even if they are been chosen by the US president their duty is not to serve their personal interest.

FED duty is to serve the interest of economy in their country and President is out of scope of any administration.

But somehow we cannot deny that their our corrupt officials out there have debt of gratitude towards their appointments gotten from the President. So hopefully the chosen official have right or solid principles and cannot be controlled by anyone.

The logic is that we could see someone appointed by the president, and if he doesn't do what the president says, then he can be replaced by someone who will, and if he doesn't do, replace again, until they appoint someone who will.

So there is not really an independence there. The independence is at the power of doing something, FED doesn't require the presidents vote to do something, they are independent in the sense that they can do what they want without asking for permission from him, but they are capable of still getting fired in a sense, not lose their job but replaced. This is why Trump could takeover the whole FED too, just like he did with the supreme court and everything else while he was in power meanwhile.

[Wind_FURY]

Even if they are been chosen by the US president their duty is not to serve their personal interest.

FED duty is to serve the interest of economy in their country and President is out of scope of any administration.

But somehow we cannot deny that their our corrupt officials out there have debt of gratitude towards their appointments gotten from the President. So hopefully the chosen official have right or solid principles and cannot be controlled by anyone.

The logic is that we could see someone appointed by the president, and if he doesn't do what the president says, then he can be replaced by someone who will, and if he doesn't do, replace again, until they appoint someone who will.

So there is not really an independence there. The independence is at the power of doing something, FED doesn't require the presidents vote to do something, they are independent in the sense that they can do what they want without asking for permission from him, but they are capable of still getting fired in a sense, not lose their job but replaced. This is why Trump could takeover the whole FED too, just like he did with the supreme court and everything else while he was in power meanwhile.

?

Trump took over the supreme court and "everything else"? That can't be true, no? Because that could mean he could lift term limits and he could be the president until the day he dies.

  ¯\_(ツ)_/¯

I believe that a better way to say it is, he has influence over the people behind the courts and the politicians in Capitol Hill.

[Alpen]

Again, from the U.S. Bureau of Labor Statistics, the US core inflation rate looks upward to me, which was rekindled in March 2025. Is this the right time to cut the rate?

I agree with you; inflation in the U.S. is on the rise and will likely only accelerate. Trump will get his rate cut anyway, especially since Powell is set to leave his position in 2026. Plus, all decisions at the Fed are collegial, and the president has already started to go after regional Fed bankers—some have been replaced, and others are being pushed for early retirement.

Interestingly, we recently saw a similar situation in Turkey, where the president dictated a rate cut during a period of rising inflation. We can all see how that ended for the country.

From a different perspective, an economic downturn in the U.S. would actually have a positive emotional effect on the rest of the world. Such a reset, in the form of a severe economic crisis, can be quite beneficial.

[Marvell1]

The logic is that we could see someone appointed by the president, and if he doesn't do what the president says, then he can be replaced by someone who will, and if he doesn't do, replace again, until they appoint someone who will.

So there is not really an independence there. The independence is at the power of doing something, FED doesn't require the presidents vote to do something, they are independent in the sense that they can do what they want without asking for permission from him, but they are capable of still getting fired in a sense, not lose their job but replaced. This is why Trump could takeover the whole FED too, just like he did with the supreme court and everything else while he was in power meanwhile.

Trump does not have the authority to fire or replace any Fed member if they have not violated the Constitution and their term has not ended. He also has no say in choosing who becomes a new Fed member or Fed chairman. He only has the right to nominate candidates but the decision rests with the Senate.

Also, he may have close relationships with members of the Supreme Court, but he does not control them. Likewise, the Fed has 11 members and the rate hike/drop is based on voting results, he will not be able to interfere, let alone control the Fed.


The Fed is an independent institution and its mission is to maintain the strength and dominance of the dollar, not just the US economy.

[pooya87]

Because that could mean he could lift term limits and he could be the president until the day he dies.

That has been one of his dreams ever since he was installed in Oval Office the first time. He has been trying to become the "emperor" just as long. For example the chairman of the Joint Chiefs of Staff general Mark Milley described the last months of his first term by comparing it with the Nazis and the Reichstag Moment they pulled off, specially after Trump's goons attacked government buildings after the election and all the mess he caused back then...

Even recently a clip came out of him talking to the Zionist Zelensky and was fascinated about the idea of being able to remain in office even after the term ends, in case the country was at war!

[Tungbulu]

Because that could mean he could lift term limits and he could be the president until the day he dies.

That has been one of this dreams ever since he was installed in Oval Office the first time. He has been trying to become the "emperor" just as long. For example the chairman of the Joint Chiefs of Staff general Mark Milley described the last months of his first term by comparing it with the Nazis and the Reichstag Moment they pulled off, specially after Trump's goons attacked government buildings after the election and all the mess he caused back then...

Even recently a clip came out of him talking to the Zionist Zelensky and was fascinated about the idea of being able to remain in office even after the term ends, in case the country was at war!

Trump's attempt to halt federal payments in order to ensure compliance with his order could also be seen as another notable example that clearly shows just how authoritative Trump is and it wouldn't be wrong at all to say that Trump's approach to governance has been characterised by a willingness to test the limits of presidential authority.
 And with clip about his fascination with remaining in office even after his term clearly shows that he has no commitment to Democratic norms and peaceful transfer of power, and honestly such actions undermines the principles of democracy and the rule of law which he clearly claimed adherence to before becoming president.

[Fiatless]

Because that could mean he could lift term limits and he could be the president until the day he dies.

That has been one of this dreams ever since he was installed in Oval Office the first time. He has been trying to become the "emperor" just as long. For example the chairman of the Joint Chiefs of Staff general Mark Milley described the last months of his first term by comparing it with the Nazis and the Reichstag Moment they pulled off, specially after Trump's goons attacked government buildings after the election and all the mess he caused back then...

Even recently a clip came out of him talking to the Zionist Zelensky and was fascinated about the idea of being able to remain in office even after the term ends, in case the country was at war!

Trump has not revealed his intentions to be a life president. He has always praised the Chinese president for extending his tenure and ruling China with an iron fist. This is why he is doing all he can to influence the court, the Feds, independent agencies, etc. If you tell him what he doesn't want to hear, you will be sacked even if what you said is the truth.

His constant posting of pictures such as these shows his power-drunk nature.

 

https://x.com/WhiteHouse/status/1892295984928993698?lang=en
https://www.bbc.com/news/articles/cdrg8zkz8d0o

[abhiseshakana]

That has been one of this dreams ever since he was installed in Oval Office the first time. He has been trying to become the "emperor" just as long. For example the chairman of the Joint Chiefs of Staff general Mark Milley described the last months of his first term by comparing it with the Nazis and the Reichstag Moment they pulled off, specially after Trump's goons attacked government buildings after the election and all the mess he caused back then...

Even recently a clip came out of him talking to the Zionist Zelensky and was fascinated about the idea of being able to remain in office even after the term ends, in case the country was at war!

Trump sees US national interests in absolute power and global domination, not in democracy (values). If he assumes full power without institutional restraint, America could truly transform into a Fourth Reich: a great, ultra-nationalist, exclusive, and authoritarian power in the 21st century. If Trump returns to power, the US could shift from liberal democracy to nationalist authoritarianism similar to 20th-century European fascism.

The issue of "Trump wants to make America a Fourth Reich" is a valid political metaphor. While Trump hasn't declared a new Reich, his personal characteristics (narcissistic, authoritarian, and admiration for dictators like Putin, Erdogan, and Kim Jong Un), nationalist-exclusionary policies, and efforts to undermine democratic institutions make comparisons with Nazi Germany (the Third Reich) relevant.

Furthermore, Donald Trump's leadership style is highly oriented toward self-branding, populism, and narcissism. International relations are viewed as a profit-and-loss proposition, not an ideology. His narratives of ultra-nationalism, anti-immigration, and law-and-order are reminiscent of classic fascist rhetoric. This rhetoric appeals to a conservative white voter base that feels threatened by globalization and the multicultural demographics of the US. Trump views extreme nationalist loyalty as a way to maintain "America First."

[imamusma]

The logic is that we could see someone appointed by the president, and if he doesn't do what the president says, then he can be replaced by someone who will, and if he doesn't do, replace again, until they appoint someone who will.

So there is not really an independence there. The independence is at the power of doing something, FED doesn't require the presidents vote to do something, they are independent in the sense that they can do what they want without asking for permission from him, but they are capable of still getting fired in a sense, not lose their job but replaced. This is why Trump could takeover the whole FED too, just like he did with the supreme court and everything else while he was in power meanwhile.

Trump does not have the authority to fire or replace any Fed member if they have not violated the Constitution and their term has not ended. He also has no say in choosing who becomes a new Fed member or Fed chairman. He only has the right to nominate candidates but the decision rests with the Senate.

Also, he may have close relationships with members of the Supreme Court, but he does not control them. Likewise, the Fed has 11 members and the rate hike/drop is based on voting results, he will not be able to interfere, let alone control the Fed.


The Fed is an independent institution and its mission is to maintain the strength and dominance of the dollar, not just the US economy.

That's right, regulatory wise President Trump cannot replace Fed members at will. However, I think Adriana Kugler resignation is part of a scenario that gives Trump room to place his trusted people on the board chair. I think Trump, with all the authority and influence he has as president, can do anything to realize his plans. Ultimately, the Fed may have to follow Trump wishes to lower interest rates.

[goldkingcoiner]

Even if they are been chosen by the US president their duty is not to serve their personal interest.

FED duty is to serve the interest of economy in their country and President is out of scope of any administration.

But somehow we cannot deny that their our corrupt officials out there have debt of gratitude towards their appointments gotten from the President. So hopefully the chosen official have right or solid principles and cannot be controlled by anyone.

The logic is that we could see someone appointed by the president, and if he doesn't do what the president says, then he can be replaced by someone who will, and if he doesn't do, replace again, until they appoint someone who will.

So there is not really an independence there. The independence is at the power of doing something, FED doesn't require the presidents vote to do something, they are independent in the sense that they can do what they want without asking for permission from him, but they are capable of still getting fired in a sense, not lose their job but replaced. This is why Trump could takeover the whole FED too, just like he did with the supreme court and everything else while he was in power meanwhile.

?

Trump took over the supreme court and "everything else"? That can't be true, no? Because that could mean he could lift term limits and he could be the president until the day he dies.

  ¯\_(ツ)_/¯

I believe that a better way to say it is, he has influence over the people behind the courts and the politicians in Capitol Hill.

I do not think he has as much power and influence as many people seem to think he does. Everything he does is met with pushback and ultimately, failure. Any influence he had was used to secure his vote but now he is going off the rails and his supporters are shying back.

Good thing a president is not the same as a dictator. Democracy has protocols to ensure megalomaniacs like him do not get their way. But he is doing great damage which will take years to undo. Especially the diplomatic damages.

[₿itcoin]

Even if they are been chosen by the US president their duty is not to serve their personal interest.
FED duty is to serve the interest of economy in their country and President is out of scope of any administration.
But somehow we cannot deny that their our corrupt officials out there have debt of gratitude towards their appointments gotten from the President. So hopefully the chosen official have right or solid principles and cannot be controlled by anyone.

The logic is that we could see someone appointed by the president, and if he doesn't do what the president says, then he can be replaced by someone who will, and if he doesn't do, replace again, until they appoint someone who will.
So there is not really an independence there. The independence is at the power of doing something, FED doesn't require the presidents vote to do something, they are independent in the sense that they can do what they want without asking for permission from him, but they are capable of still getting fired in a sense, not lose their job but replaced. This is why Trump could takeover the whole FED too, just like he did with the supreme court and everything else while he was in power meanwhile.

However, Trump has far less ability to control the Federal Reserve than you might imagine. Fed officials cannot be arbitrarily dismissed by the President & the appointments require Senate confirmation, so he just cannot simply rearrange the board as he pleases. That being said, Kugler's abrupt resignation is a genuine plug and play move and Trump now gets to put in his own person who complements his ideas & thus perhaps shift the balance within the Federal toward either hawkish or dovish action. So yeah, he can absolutely put some pressure on the institution & place his allies there but he cannot control the whole institution on his fingertips and its independence is still there... at least until now.

[Wind_FURY]

I'm looking at this again and I had a Shower Thought - If the Federal Reserve is ALWAYS LATE in acting on their pivot to Q.E./rate cuts, then is Trump and Bessent right in forcing Powell to cut the rates as soon as possible to avoid a surge in unemployment/recession?

Teal = Fed Funds Rate, Orange = CPI, Blue = Unemployment Level.

Observe that after the Federal Reserve's rate hikes, high unemployment peak followed a year at least later. It happened during Volker's time during 1983 and Bernake's time during 2009/2010. Powell's time is coming, let's observe what happens for the rest of 2023.

  ¯\_(ツ)_/¯

[pooya87]

If he assumes full power without institutional restraint, America could truly transform into a Fourth Reich: a great, ultra-nationalist, exclusive, and authoritarian power in the 21st century.

This rhetoric appeals to a conservative white voter base that feels threatened by globalization and the multicultural demographics of the US.

I don't think it is possible in the US because the two bold parts are in contradiction.

US is not a "natural" country, it is a colony and the ~350 million population are not Americans, they are immigrants who call themselves American. This is why they usually identify as Something-American like Irish-American, African-American, and so on. Something that is not true in a real country like Germany. Which is why "nationalism" has a different meaning too and could lead to "Reich" in Germany but not in the US.

Of course they have tried to artificially create the concept of "nationalism" in this colony by doing things like mass advertisement of benefits of "genetic/racial mixing" to strip the colonizers/immigrants of their ancestral identity and replace it with a new artificial one but their success rate is still small (30% IIRC) and the result is indifferent people who are more like potatoes rather than nationalists!

The main thing that used to unite all these completely different people under the same flag was the promise of "land of opportunity" something that was always a lie and is now long dead which is clear from Trump's main campaign ad/fake promise that won him the election: M.A.G.A.!

[shield132]

US is not a "natural" country, it is a colony and the ~350 million population are not Americans, they are immigrants who call themselves American. This is why they usually identify as Something-American like Irish-American, African-American, and so on. Something that is not true in a real country like Germany. Which is why "nationalism" has a different meaning too and could lead to "Reich" in Germany but not in the US.

That's right, nationalism can't exist in the USA because it's a country of European migrants. I have some friends and relatives who life in different countries. I've heard from everyone that in the USA and Canada, you feel like a local if you manage to integrate well within the country and the society but in European countries, you are still a foreigner, doesn't matter how much you try to integrate with their culture.
Btw I believe that there is an attempt to destroy nationalism in European countries like the UK, Germany, France and others. When I was in France, it was full of black people. I know from history that the French people are white. When there is such a mixture of people and also a huge promotion of acceptance of every religion and race, then such a country can't be nationalistic.

"land of opportunity" something that was always a lie

I hear from many local people, who are in the USA that it's really a land of opportunity. Why do you think that it's a lie? I've never been in the USA, so I can't really talk but people around me say otherwise. We have a very good example, who is a UFC fighter, from a very poor family and village, who moved to the USA, worked on construction and today is a UFC fighter. I'm talking about Merab Dvalishvili.

[Marvell1]

Trump does not have the authority to fire or replace any Fed member if they have not violated the Constitution and their term has not ended. He also has no say in choosing who becomes a new Fed member or Fed chairman. He only has the right to nominate candidates but the decision rests with the Senate.

Also, he may have close relationships with members of the Supreme Court, but he does not control them. Likewise, the Fed has 11 members and the rate hike/drop is based on voting results, he will not be able to interfere, let alone control the Fed.


The Fed is an independent institution and its mission is to maintain the strength and dominance of the dollar, not just the US economy.

That's right, regulatory wise President Trump cannot replace Fed members at will. However, I think Adriana Kugler resignation is part of a scenario that gives Trump room to place his trusted people on the board chair. I think Trump, with all the authority and influence he has as president, can do anything to realize his plans. Ultimately, the Fed may have to follow Trump wishes to lower interest rates.

As I said, the Fed's job is to maintain the strength of the dollar, and that is the core of American strength. That is why the Fed needs to be independent of the US government and avoid being politicized. If Trump can politicize the Fed, it means the world's confidence in the USD will be shaken and collapsed, and US dominance will also disappear.
If the Fed is politicized to serve Trump's political purposes, the consequences will be huge and I believe Congress is well aware of that and they will not let that happen.


Update: Trump has ordered the firing of Fed Governor Lisa Cook on unconvincing charges. That's why she said she won't comply, and what can Trump do? Trump can do nothing, and the case will soon go to the Supreme Court, the only place with the authority to decide.
https://www.nbcnews.com/politics/white-house/trump-removing-federal-reserve-governor-lisa-cook-rcna227138