The Intelligence from The Economist Fed man walking? Trump v Powell
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Apr 24, 2025 
Simon Rabinovich, the U.S. economics editor at The Economist, dives into the tumultuous relationship between Jerome Powell and Donald Trump. He discusses the Fed's precarious position amidst political shifts, especially concerning interest rates. The conversation shifts to remote work preferences, revealing demographic insights and its lasting effects post-pandemic. Finally, Rabinovich unpacks the environmental paradox of electric vehicles, emphasizing that while they reduce tailpipe emissions, they still pose air quality challenges from other pollution sources.
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Trump vs Powell: Fed Independence Risk
- President Trump dislikes Federal Reserve Chair Powell’s independence and desires lower interest rates.
- This conflict risks the Fed's independence and has led to market instability.
Market Reaction Shapes Trump’s Fed Moves
- Market backlash to Trump’s threat to fire Powell prompted White House advisors to caution him.
- Advisors warned firing Powell would cause worse market turmoil, leading to a swift climbdown.
Legal Limits on Firing Fed Chair
- Law limits firing Fed chair to cause beyond policy disagreement, making immediate dismissal hard.
- Changing laws or Supreme Court rulings might impact removal powers but Fed’s independence remains strong.