Full Story Is Trump regretting his battle with the Federal Reserve?
Jan 16, 2026
Join economist Heather Boushey, a former White House adviser, as she dissects Donald Trump's tense relationship with the Federal Reserve. Boushey explores the implications of the DOJ's investigation into Jerome Powell and Trump's push for lower interest rates amid rising housing costs. They discuss the rare global support for Powell and why maintaining central bank independence is crucial for economic stability. Boushey also cautions against misreading economic hardship, highlighting its potential impact on the Republican Party's messaging.
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Unprecedented Attack On Fed Independence
- The DOJ's criminal probe into the Fed chair is unprecedented and shocks norms protecting central bank independence.
- Heather Boushey warns this threatens the foundations that keep monetary policy based on data rather than politics.
Policy Choices Undermine Rate Cuts
- Trump wants lower interest rates to ease mortgage and living costs, but policy actions undermine that aim.
- Boushey says chaotic tax and tariff choices have reduced the effectiveness of Fed cuts on real mortgage rates.
Renovation Became A Political Proxy
- The fight has become a proxy spat over a lavish renovation of the Fed's historic headquarters.
- Trump publicly mocked the renovation as 'the most expensive construction job in history' to attack Jay Powell.