He wrote, quote, Jerome Powell of the fed, who is always too late and wrong. He said that in all caps, yesterday issued a report which was another and typical complete mess. He went on to say that Powell's termination could not come fast enough. You've reiterated that you intend to stay in office until the end of your term, [00:00:19] and that's certainly reassured many in financial markets. Our independence is a matter of law. Congress has in our statute we're not removable except for cause. Well, the stock market was in freefall again today after President Donald Trump [00:00:34] called his own Federal Reserve chair, Jerome Powell, a loser. Now, Trump is very upset with Powell because of the fact that Powell is unwilling to lower interest rates. In fact, in a recent, update that we received from Powell, he basically cited [00:00:51] that Trump's tariffs policy is very likely going to lead to more inflation. And as a result of that, the Federal Reserve is unwilling to lower interest rates, which is something that Trump really, really wants Powell to do. Jake. Yeah, he better be careful what he wishes for. [00:01:06] So, lowering the interest rates, stimulates the economy. And Trump is in his first term, pressured the head of the Federal Reserve to lower interest rates over and over again. And look, we were headed in that direction anyway. And they did. Right. So you can't tell if they respond to pressure or if they were going that way. [00:01:24] So did it help his economic numbers? Immensely. But when you're worried about inflation, lowering the interest rate is the exact wrong move because it could overstimulate the economy and leading to higher prices. But now with the tariffs, we're already risking going back into [00:01:41] inflation in pretty significantly if you lower the interest rates. That's a double whammy and could actually destroy the economy. Right. So Powell is doing what he's supposed to do. You know we've got issues with the Federal Reserve overall. But as the chair here, he's supposed to balance, [00:01:56] you know inflation and unemployment and come to a number that's best for the economy and do that objectively and not based on the political whims of the president. And he is absolutely doing his job. The reason the market went down nearly 1000 points today is because one of the things that is true is that the market thinks Powell is doing a good job, [00:02:16] and he's a good steward of the economy because he's been now through a couple of presidents, and he's done a pretty good job of modulating the interest rates in a professional way. And they're worried that if he Trump gets rid of him and puts in some dumbass lackey, that it's going to absolutely destroy the markets. [00:02:33] So that's why the market headed south again today, by the way. Trump was warned about this by some of his top advisers. - And as usual, he didn't listen. - Yeah. And also I mean, when you think about the tariffs, if Trump really does go forward with some of the more astronomical tariffs against our trade partners. [00:02:52] And by the way, that is on top of the 10% baseline tariff that he's slapping on to every country. It's going to lead to unemployment, too. Like it's not just going to be inflation. There are companies within the United States that rely on foreign made parts [00:03:08] or foreign products in order to run their business here in the United States. And if they can't afford those products because of the high tariffs, or if their customers aren't willing to bear the financial burden of the, you know, inflation that comes along with those tariffs, [00:03:24] they're going to go out of business and that's going to increase unemployment. And that's like a crazy combination of higher unemployment. Yet you also have inflation that remains and could get worse. And that's one of the reasons why everybody is so worried about a recession. [00:03:40] Because Trump is flirting with stagflation. Right. That's when you do the nearly undoable of getting bad unemployment numbers and bad inflation numbers, which by the way, I mean, he already did the undoable in the markets by getting the stock market and the bond market did drop at the same time, which was previously thought unimaginable [00:03:58] because they balance each other out. When you take money out of one, you usually put it in the other, but people took it out of both markets because they were so worried about the instability that Trump is bringing. And also, I mean, look, this game of chicken with China has not really looked so great for Trump so far. [00:04:13] I think there was this assumption that President XI and China was going to cave to Donald Trump's demands. That has not happened yet. It doesn't appear that he's going to bend at any point he could. You never know what the future holds, but things aren't looking good in regard to, you know, these negotiations with China. [00:04:30] Now, with that in mind, today, Trump posted this on Truth Social. And that's what led to, you know, the freefall in the stock market. He wrote preemptive cuts in interest rates are being called for by many, meaning many want the fed to lower interest rates with energy costs way down, [00:04:49] which is true except for the case of California food prices, including Biden's egg disaster, substantially. I know, I know, it's ridiculous. Like, look, we didn't like hammer Trump over the egg prices because it was avian flu, and he doesn't have control over that. [00:05:04] To the extent that people want to make it seem. As usual, we were fair and honest about Biden's inflation. Exactly right. Exactly. So, like, was that all Biden? No. In fact, Biden handled it better than most of the rest of the world, partly because of Jerome Powell, by the way. And they worked in tandem. [00:05:20] So we didn't hammer Trump over it because we're fair. But then you want to blame it on Biden. Biden had nothing to do with the egg prices. That makes you look like an ignoramus. He says there's virtually no inflation right now. Really? Okay. There can be a slowing of the economy unless Mr.. Too late. [00:05:36] He's referring to Jerome Powell. They're a major loser. Lowers interest rates. Now come on. Powell has always been too late. Except when it came to the election period when he lowered interest rates in order to help Sleepy Joe Biden and Kamala get elected. [00:05:51] How did that work out? So Trump's post again followed an earlier post in which he called for Powell's termination. And I want to just briefly talk about that because due to congressional legislation that was passed earlier, the Federal Reserve is a separate independent body [00:06:09] and the president cannot fire the chair. Now, I should note that in Trump's first term, he was the one who tapped Jerome Powell to be head of the Federal Reserve. But since he can't manipulate him like a nice little puppet, Trump soured on him and wanted to fire him in his first term. [00:06:26] Didn't succeed in that. And now he's kind of bringing this issue back up. But look, there is a Supreme Court case that could eventually lead to Trump having the ability to fire Jerome Powell. So I want to get to that case. And here's an explanation of it. [00:06:42] Tell me about the case in front of the Supreme Court. That might change that. Well, it involves the National Labor Relations. Board, which is another one of those so-called independent federal agencies where Congress has specifically restricted the president from firing or removing members. Trump did it anyway. So one of the members sued. [00:06:59] Now, Trump argues that he has the power to do this under the Constitution, that these are agencies that perform executive functions. He's the head of the executive branch. And so Congress can't restrict him from removing these members. And I will say, looking back to cases in the past 15 years, [00:07:15] there has been some sympathy by some of the justices for those arguments. Now, how does this case affect the fed? Well, it's a similarly structured agency. So there is real concern that if the court agrees to take up this case. And certainly if Trump wins, then that also could suggest that he could get rid [00:07:34] of Jerome Powell as as head of the fed. So a lot could really hinge on whether the Supreme Court hears that case and how they rule on that case. It could, again, negatively impact Jerome Powell's role as head of the Federal Reserve. But nonetheless, Trump doesn't like independent government agencies. [00:07:51] He wants to have control over everything. Yeah, this is a big problem. So here the Supreme Court could go in the wrong direction. And so we'll have to see how it plays out. But, the reason it'd be a huge problem is because every president and this one is definitely not just Trump or the Republicans [00:08:08] is going to want to pick a fed chair that's going to stimulate the economy. But the problem is, when you stimulate it on your watch, sometimes it blows up on the next guy, right? So it's a deeply irresponsible but also nearly irresistible way of controlling the markets and the economy. [00:08:24] So a president is going to voluntarily not use that power to stimulate the economy, even if it's over stimulating, especially in his last two years when he's not likely to feel the brunt of it. And he could pretend and his party can pretend all along. Oh, when we were in charge, everything was great. [00:08:40] So it's a really bad idea, to go in this direction. And lastly for me Trump. I mean calling the head of the federal. Head of the fed a major loser. Who does that? [00:08:55] Like I don't know when MAGA is going to get tired of him being a child. Maybe the answer is never right. Or independents that voted for Trump, more importantly. Like, come on guys, what is this? What is like. I don't I don't mind the look. I don't like that he's attacking Jerome Powell for the reason [00:09:12] he's attacking Jerome Powell. And I've had my issues with monetary policy under Jerome Powell's leadership for sure. But nonetheless, I don't care if he calls him a loser I get it. It seems childish compared to what you know. So, you know, I've said a million times, I don't mind him doing the intimidation and the bullying. That's part of politics and that's hardball, [00:09:29] and I've given him credit for that. And you want to attack your political opponents, etc.. But when you call the head of the Federal Reserve. - Major loser. - It's so stupid and childish. And by the way, that's what makes the markets partly jittery, right? Because they're like, oh, the president's a freaking child. [00:09:46] And so whether you like it or not, there's also tons of foreign investors in the stock market, right. And once they see that our president is a buffoon, they get worried and they start withdrawing money from America. So you can say, hey, I don't care about corporations. [00:10:02] And you know me, I got 1000 problems with corporations, right? And and the structure of the Federal Reserve has huge issues that we've talked about on other shows. Right. But when a president does this kind of, like, third grade stuff, it's unnerving. [00:10:19] Yeah, I get it. Yeah I agree. So we'll see how this plays out. But Jerome Powell remains defiant. He is resisting calls to step down. He will not resign, and we'll see how it plays out for him. I'm super curious to see who wins in this battle. Every time you ring the bell below, an angel gets its wings. [00:10:37] Totally not true, but it does keep you updated on our live shows.