[Karah Rucker]
THERE’S BAD BLOOD BETWEEN PRESIDENT TRUMP AND FEDERAL RESERVE CHAIR JEROME POWELL.
TRUMP IS RAMPING UP CALLS FOR THE FED TO LOWER INTEREST RATES THIS MONTH.
WHILE POWELL MAINTAINS HE WANTS TO WAIT THINGS OUT.
<3:40- Am i allowed to appoint myself at the fed, i’d do a much better job than these people so anyway, we should be 2 points lower, 2.5 points lower would be nice.”
[Jerome Powell]
<:56-“We’re simply taking some time. As long as the u.s. Economy is in solid shape, we think the prudent thing to do is to wait and learn more.”
[Karah Rucker]
THIS divide ON WHEN TO CUT RATES –
HAS LED TO A TEMPERATURE INCREASE IN RHETORIC.
<1:44:31- “he’s a very average mentally person, i’d say low in terms of what he does low, low iq.”
[Karah Rucker]
AND JUST AS TRUMP QUESTIONS POWELL’S THINKING BEHIND THE FED’S DECISION-MAKING…
4:23- “we’re paying more right now because we have a guy who’s you know suffers from i think trump derangement syndrome if you want to know the truth.”
[Karah Rucker]
COMMENTATORS ON THE LEFT –
QUESTION **TRUMP’S THINKING.
“There’s sort of a fed derangement syndrome, and its not unique to donald trump.”
<:58- “Am i allowed to appoint myself chair of the federal reserve?”
<:44- “no president was ever capable of saying anything as stupid or as indicative of dementia as that.”
[Karah Rucker]
INTEREST RATES – ARE HIGHER THAN THEY HAVE BEEN IN RECENT YEARS.
WHILE BOTH REPUBLICANS AND DEMOCRATS SAY THEY WANT TO SEE INTEREST RATES COME **DOWN, A DIVIDE IS EMERGING OVER **WHY RATES REMAIN ELEVATED — AND **WHO IS RESPONSIBLE.
LEFT-LEANING OUTLETS ARE AMPLIFYING VOICES THAT BLAME TRUMP’S TARIFF POLICIES FOR KEEPING RATES HIGH — ECHOING THE FEDERAL RESERVE’S OWN WARNINGS.
RIGHT-LEANING OUTLETS ARE POINTING THE FINGER AT POWELL — ECHOING ARGUMENTS FROM TRUMP ADMINISTRATION OFFICIALS.
WELCOME TO BIAS BREAKDOWN.
THE WAR OF WORDS – IS ON.
“We have a guy that’s just a stubborn mule, and a stupid person that is making a big mistake.”
[Karah Rucker]
POWELL SAYING LAST WEEK – TRUMP’S TARIFF POLICY IS THE REASON INTEREST RATES HAVE NOT BEEN LOWERED.
[Jerome Powell]
:34- would the chair have cut more by now if it weren’t for the tariffs? So i think that’s right. So in effect we went on hold when we saw the size of the tariffs and economic forecasts went up materially as a consequence of the tariffs.”
[Karah Rucker]
BUT TRUMP – SENT A LETTER TO POWELL LAST WEEK – WHICH PRESS SECRETARY KAROLINE LEAVITT SHARED IN A PRESS BRIEFING.
THE LETTER SHOWCASED 34 OTHER CENTRAL BANK INTEREST RATES THAT ARE **LOWER THAN THE U.S.
TRUMP WRITING TO POWELL –
“JEROME – YOU ARE AS USUAL “TOO LATE.”
TELLING THE FED CHAIR HE “SHOULD LOWER THE RATE – BY A LOT!”
SUGGESTING THE U.S. SHOULD HAVE ONE OF THE LOWEST INTEREST RATES IN THE WORLD.
FOR FINANCIAL NEWS – MANY AMERICANS CHOOSE TO TUNE INTO BUSINESS NETWORKS.
THE TOP TWO – BEING FOX BUSINESS NETWORK.
AND CNBC.
FOX IS RIGHT LEANING AND CNBC IS LEFT LEANING, ACCORDING TO MULTIPLE NEWS RATING ORGANIZATIONS.
HERE – WE SEE NARRATIVES DIVERGE AS WELL.
IF YOU’RE TUNING INTO ONE NETWORK OVER THE OTHER –
YOU’RE GETTING A PERCEPTION OF POWELL UNDER THEIR POLITICAL LENS..
“He’s not a stubborn mule, he’s a smart guy. He’s done a very good job.”
“He’s making the wrong moves if you look at what the market is doing with interest rates.”
DEPENDING ON WHICH NETWORK ANALYSTS YOU’RE WATCHING –
ACCUSATIONS OF **POLITICAL MOTIVATION ARE BEING LEVELED AT BOTH POWELL AND TRUMP.
RIGHT-LEANING OUTLETS CLAIM POWELL IS WORKING AGAINST TRUMP’S INTERESTS –
AND LEFT OUTLETS ACCUSE TRUMP OF IMPROPERLY PRESSURING POWELL TO MAKE DECISIONS BASED ON HIS ADMINISTRATION’S INTERESTS.
<:16- “We hear all this policy criticism from powell now and we didn’t hear much of it when biden was spending money like a drunken sailor.”
<46 ish “here you had a fed that was committed to the idea that they would keep lowering rates as inflation was coming down right before they abandoned that idea after the inauguration of trump.”
<3:51-:4:06> “The mere thought that you’re going to make trouble for the fed, you’re going to put political pressure on, you’re going to undermine its credibility . who am i to appoint as vice, if a chair comes up, who is going to pressure? It’s very damaging.”
[Karah Rucker]
MORE OFTEN THAN NOT –
NETWORKS STACK THEIR PANELS WITH EXPERTS – AND ECONOMISTS – WHO REINFORCE THEIR POLITICAL LEAN — AND PUSH THE NARRATIVE THAT BENEFITS THEIR SIDE OF THIS DEBATE.
RIGHT-LEANING FOX BUSINESS INTERVIEWED ANALYSTS THAT EXAMINED ECONOMIC DATA AND CONCLUDED THE FED SHOULD SLASH RATES NOW –
WHICH MATCHES TRUMP’S TAKE ON THE ISSUE.
“The fed’s logic is falling apart when you look at the data because we are seeing tariff revenue but not seeing it rise inflation”
<:36-:42 with all of these good inflation numbers coming down and it’s a surprise. The tariff inflation is missing in action i mean that’s one thing.
<1:09- the target rate is now over 2 percentage points above the inflation rate so i’m trying to figure out what is the fed’s argument here.”
“The fed has no argument here, the fed has tariff derangement syndrome.”
WHILE MSNBC ON THE LEFT – INTERVIEWED ANALYSTS WHO CITED ECONOMIC UNCERTAINTY – DEFENDING POWELL AGAINST TRUMP’S RHETORIC.
1:34- “we know why the fed isn’t cutting rates…they would be cutting rates if not because of trump’s trade war on whether inflation will be reignited.”
<4:22- “First lets understand what powell did wrong, he stated the obvious. He said something that every economist is saying, which is that these tariffs are going to cause higher inflation and higher unemployment.”
[Karah Rucker]
WORTH NOTING, POWELL IS A REPUBLICAN APPOINTED TO FED CHAIR BY PRESIDENT TRUMP during his first term – BUT OVER THE YEARS, the two have seen things differently.
YOU’VE SEEN THE NARRATIVES AT PLAY –
NOW LET’S TALK ABOUT WHAT YOU NEED TO KNOW BEHIND THE DECISION MAKING PROCESS.
THE FED LOOKS AT SEVERAL FACTORS WHEN IT COMES TO POTENTIALLY LOWERING INTEREST RATES.
SO HOW IS THE ECONOMY DOING?
THE LATEST INFLATION DATA AVAILABLE FROM MAY SHOWED A POINT-ONE PERCENT INCREASE MONTH OVER MONTH WITH A 2.4 PERCENT RISE IN PRICES FROM A YEAR AGO –
THAT’S SLIGHTLY ABOVE APRIL’S ANNUAL INFLATION RATE, WHICH WAS THE LOWEST SINCE 2021 –
INFLATION’S BEEN UNDER 3% FOR THE PAST YEAR –
BUT IT’S STILL HOVERING ABOVE THE FEDERAL RESERVE’S TARGET OF 2 PERCENT.
A NEW JOBS REPORT SHOWED 147 THOUSAND JOBS ADDED IN JUNE –
BEATING EXPECTATIONS.
UNEMPLOYMENT TICKED DOWN TO 4.1 PERCENT –
ECONOMISTS THOUGHT IT WOULD COME IN SLIGHTLY HIGHER.
THIS DATA SHOWS A STRONG ECONOMY.
TRUMP SAYS THAT STABILITY MEANS ITS TIME FOR RATES TO COME DOWN.
POWELL IS USING THAT STRENGTH TO DEFEND HIS WAIT-AND-SEE POSITION –
SAYING HE WANTS TO SEE HOW THE ECONOMY REACTS TO TRUMP’S TARIFF POLICIES.
THE STOCK MARKET GETS SHAKY WHENEVER INVESTORS BELIEVE TARIFFS ARE COMING.
TRUMP’S “LIBERATION DAY” TARIFFS WERE PUT ON A 90-DAY PAUSE BACK IN APRIL.
THAT PAUSE WAS SET TO EXPIRE THIS WEEK — BUT THE WHITE HOUSE NOW SAYS TRUMP IS LIKELY TO EXTEND IT THROUGH AUGUST 1.
THE CURRENT FED RATE SITS BETWEEN 4.25 TO 4.5 PERCENT.
TAKING A LOOK AT THIS GRAPH – YOU CAN SEE HOW THE RANGE TICKED UP – LITTLE BY LITTLE – FROM MARCH 2022 THROUGH JULY 2023.
THEN THE FED CUT INTEREST RATES IN SEPTEMBER OF LAST YEAR BY 50-BASIS POINTS.
AND ANOTHER 25 BASIS POINTS IN NOVEMBER AND AGAIN IN DECEMBER.
THE FEDERAL RESERVE BOARD IS SET TO MEET AGAIN AT THE END OF THIS MONTH.
ACCORDING TO “CME FEDWATCH” –
THE PROBABILITY OF A 25-BASIS POINT INTEREST RATE CUT IN JULY WENT FROM 23.8% TO JUST 4.7% FOLLOWING THE LATEST JOBS REPORT.
SO PROBABLY UNLIKELY THINGS WILL CHANGE.
THE NEXT FED MEETING WILL BE IN SEPTEMBER.
ACCORDING TO FEDWATCH – THERE’S A 62 PERCENT CHANCE THE FED WILL CUT RATES THEN.
AND A 40 PERCENT LIKELIHOOD THEY GET CUT AGAIN AT THE NEXT MEETING IN OCTOBER.
AS FOR POWELL –
HE DOESN’T HAVE THE SOLE AUTHORITY TO LOWER INTEREST RATES –
THE FEDERAL OPEN MARKET COMMITTEE -MADE UP OF 12 MEMBERS – VOTE ON RATES.
BUT POWELL DOES LEAD THOSE DISCUSSIONS – SETTING THE TONE AND AGENDA OF MEETINGS – SO HIS OPINION DOES CARRY WEIGHT.
POWELL’S TENURE AS FED CHAIR ENDS NEXT MAY.
COURTS HAVE RULED A PRESIDENT CAN’T FIRE THE FED CHAIR FOR POLICY REASONS – BUT AS REPORTED BY THE WALL STREET JOURNAL –
TRUMP COULD UNDERMINE POWELL’S AUTHORITY BY ANNOUNCING HIS REPLACEMENT EARLY.
HERE’S HOW THAT WOULD WORK.
THE JOURNAL WROTE –
“Because the new chair wouldn’t take office until next May, announcing the pick this summer or fall would be far earlier than the traditional three-to-four month transition period. An early announcement could allow the chair-in-waiting to influence investor expectations about the likely path for rates, like a backseat driver, attempting to steer monetary policy before Powell’s term ends.”
[Karah Rucker]
TREASURY SECRETARY SCOTT BESSENT HINTED THAT TRUMP ALREADY HAS PEOPLE IN MIND.
[Scott Bessent]
“I think we have lots of good candidates for fed chair. We will start working on that in the fall.”
[Karah Rucker]
POWELL COULD ALSO RESIGN EARLY – SOMETHING TRUMP HAS CALLED ON HIM TO DO.
BUT HE’S INDICATED NO INTENTION OF DOING SO.
THOSE ON THE POLITICAL LEFT AND RIGHT HAVE MADE THEIR VIEWS CLEAR ON WHAT THE FEDERAL RESERVE **SHOULD DO.
AND THE MEDIA HAS TOO – LARGELY LEANING HEAVILY ON ONE SIDE OF THE INTEREST RATE DISCUSSION.
IF YOU’RE WATCHING LEFT-LEANING OUTLETS, YOU’RE LIKELY HEARING THAT TRUMP IS WRONG TO PUSH FOR RATE CUTS — BECAUSE OF UNCERTAINTY AROUND ***FUTURE ECONOMIC OUTLOOKS.
BUT IF YOU’RE WATCHING RIGHT-LEANING OUTLETS, YOU’RE PROBABLY HEARING THAT POWELL IS WRONG TO HOLD RATES STEADY — GIVEN ***CURRENT STABLE JOBS NUMBERS AND INFLATION DATA.
BUT INSTEAD OF TELLING YOU WHAT YOU SHOULD THINK AND WHY –
IT’S MY JOB TO EXPLAIN WHAT IS HAPPENING –
AND THEN OPINIONS OVER WHETHER THE FED IS RIGHT OR WRONG ARE YOURS TO DECIDE.
AND THAT’S YOUR BIAS BREAKDOWN.
THANKS SO MUCH FOR WATCHING THIS WEEK’S EPISODE.
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POLL AFTER POLL SHOWS AMERICANS DON’T HAVE MUCH TRUST IN THE MEDIA.
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A BIG THANKS TO IAN KENNEDY AND ALI CALDWELL FOR THEIR WORK ON VIDEO EDITS AND GRAPHICS THIS WEEK.
AND THANK YOU FOR STICKING WITH ME ALL THE WAY TO THE END HERE.
I’LL SEE YA NEXT TIME!
