Unhedged Swamp Notes: Trump’s case against Fed chair Powell
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Aug 7, 2025 
In this discussion, Adam Posen, President of the Peterson Institute for International Economics, and Claire Jones, The FT's U.S. economics editor, dissect the escalating tensions between President Trump and Fed Chair Jay Powell. They explore the implications of Trump's pressure for interest rate cuts and the risks to the Fed's independence. The conversation also touches on historical clashes between the presidency and the Fed, and how these dynamics affect economic stability. Plus, they analyze potential outcomes of the upcoming midterm elections on Trump-era policies.
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Trump's Pretext to Pressure Powell
- President Trump publicly criticized Fed Chair Jay Powell because he disagrees with the Fed's pace of interest rate cuts.
- He is using the high cost of the Fed's headquarters renovation as a pretext to pressure or possibly remove Powell.
Attacks on Fed Are Pretexts
- The administration's attacks on the Fed, including on building costs, lack sound policy or legal basis.
- These attacks serve mainly as pretexts to pressure the Fed Chair aggressively.
Fed Independence Is Crucial
- Past presidents have criticized the Fed, but Trump's hostility is uniquely public and personal.
- Maintaining Fed independence is crucial for stable inflation and the country's economic well-being.