On The Market

Can Trump Push Jerome Powell Out of the Fed? w/WSJ's Nick Timiraos

Nov 21, 2024

In this discussion, Nick Timiraos, a Wall Street Journal reporter and Federal Reserve expert, dives into the intricate relationship between Donald Trump and Fed Chair Jerome Powell. He analyzes Trump's past criticisms of the Fed and the implications of his potential return to power. Key topics include the significance of Fed independence for economic stability and the legal limitations on the President's ability to fire Powell. Timiraos also addresses the future of interest rates, inflation concerns, and whether Trump's and Powell's economic strategies may align more than it seems.

32:36

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Nick Timiraos

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Quick takeaways

The podcast examines the tension between President Trump and Fed Chair Powell, emphasizing the importance of Fed independence for economic stability.

Nick Timiraos highlights the impact of rising mortgage rates on housing markets, despite the Fed's intention to reduce interest rates.

Deep dives

Federal Reserve's Future and Interest Rates

The podcast discusses the ongoing uncertainty surrounding the Federal Reserve's policy direction following interest rate cuts. After significant cuts earlier in the year, the bond market unexpectedly reacted by raising yields, indicating a belief that a recession might be averted. Factors influencing this scenario include unclear economic policies from the newly elected administration, which could impact growth and inflation. Mortgage rates, tied to the bond market rather than the Fed's actions, have risen despite the central bank's rate reductions, complicating the landscape for housing markets.

Intro

2min

Exploring Federal Reserve Policies and Inflation Dynamics

2min

Trump, Powell, and Fed Independence

9min

The Independence of the Federal Reserve: Politics and Pressures

9min

Trump and Powell: Fed Dynamics Explored

6min

Exploring the Economic Nexus Between Trump and the Federal Reserve

3min

Has the Federal Reserve gone too far? Many Americans are critical of the Fed’s move to raise interest rates sharply, pause for years, and then slowly start implementing rate cuts. The arguably most prominent critic of the Fed? President-Elect Donald Trump, who, shortly after nominating the current Fed chair, Jerome Powell, reversed his opinion on whether Powell was the right person for the job.

Now, with Trump coming back to the White House, Powell’s job hangs in jeopardy—or does it? Can a President fire the Fed chair? Does the President have the authority to influence how the Fed operates? What would happen if Trump decided to go after Powell and request his resignation? Nick Timiraos, reporter at The Wall Street Journal and Federal Reserve expert, is on to answer these questions.

Nick gives us the latest update on rate cuts, where the Fed is headed, how the future of the Fed looks with Trump back in office, and why some politicians champion “Fed Independence,” while others argue that Fed power has overstepped its bounds. Are Trump and Powell more aligned than they think, and is this government drama all talk? We’re getting Nick’s expert viewpoint on it all.

In This Episode We Cover

Why “Fed Independence” could actually be a crucial piece to keeping the economy stable

Whether or not Trump has the authority to fire and replace a Fed chair

Future rate cuts, inflation concerns, and the Fed’s latest “signal” on rates

Powell’s simple response when asked if he would resign because of Trump’s request

Why the Fed does NOT have to answer to the President (and is this a good thing?)

Trump’s proposed tax and tariff policies and why they could challenge the Fed

And So Much More!

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