@60minutes Fed chair says he worries about the national debt #nationaldebt #60minutes #federalreserve #debt
Donald Trump believes that Federal Chairman Jerome Powell will make decisions for the central bank based on politics. I must say that I do disagree with Trump’s stance on the role of the central bank and Chairman Powell. I noted my dissent when Trump was urging the central bank to keep interest rates artificially low. Trump has been harshly critical of Powell’s performance, and said that he would not elect him to serve a third term when Powell’s current position comes to an end in May 2026.
“I think he’s political,” Donald Trump said. “I think he’s going to do something to probably help the Democrats, I think, if he lowers interest rates.” First, we must remember that Jerome Powell was one of the first in his position to criticize Washington. The Federal Reserve must remain neutral and not criticize Washington, after all, Washington oversees the Federal Reserve. The Federal Reserve must adjust its fiscal policy to meet Washington’s monetary policy, or lack thereof.
THE CENTRAL BANK CANNOT CONTROL GOVERNMENT SPENDING. Powell has warned, perhaps more so than any past chairman, that the government is destroying America by deepening the national debt through historic spending. Powell candidly said the following in an interview with 60 minutes:
“In the long run, the US is on an unsustainable fiscal path. The US federal government is on an unsustainable fiscal path and that just means that the debt is growing faster than the economy,” Powell finally warned, later adding, “effectively, we are borrowing from future generations.” He warned that we must begin to prioritize fiscal policy immediately to fix this unending crisis. Again, his comments were unprecedented as his agency is largely unable to criticize Washington. How is the Federal Reserve supposed to regulate price stability when their overlords are doing everything possible to steer the nation’s economy off the deep end?
Again, it was extremely out of character for Powell to criticize Biden’s fiscal policies. The Federal Reserve simply cannot adjust monetary policy OR the other two pillars of government debauchery – war and taxation.
In March, Powell noted that the Federal Reserve did all it could to stabilize prices. “We believe that our policy rate is likely at its peak for this tightening cycle,” Powell said. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year. But the economic outlook is uncertain, and ongoing progress toward our 2% inflation objective is not assured.” Four months later, Powell is putting forth the same message.
“People I don’t know will always say, ‘hey, cut rates.’ Somebody said that in the elevator this morning,” Powell said jokingly, but the matter is not that simple.
“The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said.
American consumers are not driving demand. Raising interest rates have ZERO impact on demand, as the government will simply borrow more, and the central banks have no say. I explained in an earlier post why Keynesian Economics is collapsing, one major factor being that government need not repay its debts.
Powell has agreed to stay on until the end of his term. I would not want to be in his shoes. Right or left, they’re going to point their finger and blame the Fed. They have asked me if I would serve as Fed Chairman – absolutely not! I would never want a position in front of the curtain.
