Jerome Powell probably didn't sign up to be anybody's punching bag. But that's exactly what he's become—again—as former President Trump has ramped up his attacks on the Fed chairman following disappointing job numbers.
"Incredible!!!" Trump blasted on Truth Social after the ADP private sector report showed a measly 37,000 jobs added in May. And no, those exclamation points weren't conveying admiration.
The timing here is... interesting. Powell and Trump actually met face-to-face last Thursday, which makes this social media tirade feel like one of those arguments where you think of the perfect comeback three days too late. Classic Trump.
I've been watching this Powell-Trump dynamic since 2018, and there's something almost theatrical about it. Trump demands cuts. Powell maintains his poker face. The markets grab popcorn. Rinse and repeat.
But this time feels different. The economy's sending mixed signals that would give any Fed chair heartburn.
The Political Game Nobody Asked to Play
Look, presidents pushing for looser monetary policy isn't exactly revolutionary. What's new is the, shall we say, colorful language. When you're calling the Fed chair a "big loser" and a "fool," you've pretty much tossed the traditional central bank independence playbook into the shredder.
Having covered monetary policy for years, I've noticed what you might call an "asymmetric pain theory" at work. When rates are high, the pain is immediate and loud—businesses struggle, layoffs happen, politicians get angry phone calls. When rates are too low? The inflation creeps up slowly, quietly eating away at purchasing power like termites in your financial foundation.
No wonder politicians almost never campaign on "Higher rates now!" It's economic suicide.
The whole setup is weird, really. We ask these technocrats to make unpopular decisions while remaining "independent," yet they're appointed by the very politicians they're supposed to ignore. It's like telling someone to drive the car while the backseat driver keeps threatening to have them fired if they don't speed up.
A Genuine Economic Puzzle (Not Just Politics)
Behind all the drama lies a legitimate economic conundrum. That ADP report was undeniably weak—like "showing up to a potluck with store-bought chips" weak. If Friday's official jobs report confirms this trend, Powell will have some serious explaining to do.
But inflation? Still hovering above target. And those tariffs Trump keeps promising would almost certainly push prices higher, not lower. Powell himself acknowledged this uncomfortable reality, noting tariffs would "push up inflation and probably weigh somewhat on economic activity."
Between slowing job growth and sticky inflation, Powell's caught in what my economics professor used to call a "damned-if-you-do, damned-if-you-don't" scenario. (He was more eloquent in his published papers.)
Meanwhile, the markets are betting on roughly three quarter-point cuts this year, starting around September. That's a far cry from Trump's "cut now, cut big" demands. It's as if Wall Street and Mar-a-Lago are reading completely different economic forecasts.
Powell's Impossible Balancing Act
So what's a Fed chair to do? Powell somehow needs to: 1. Follow the data, not the tweets 2. Maintain credibility with markets 3. Navigate between the Scylla of recession and the Charybdis of inflation 4. Avoid becoming a campaign talking point (probably already too late)
That last bit might be the trickiest. Powell's term runs until 2026, meaning he'll be around regardless of who wins in November. But once the central bank becomes a political football, its effectiveness takes a hit. Markets start viewing monetary policy decisions through a partisan lens—which is about as helpful as using political affiliation to predict the weather.
In the end, Powell will probably do what Fed chairs have always done—move cautiously, speak cryptically, and pray the data provides clear direction. Though with Trump calling him "incredible!!!" (and not in the good way) and economic indicators flashing warning signs, his path looks about as smooth as... well, as a Trump cabinet meeting.
Things happen: Goldman's apparently looking to offload its GM credit card business... SEC finally gave the green light to spot Ethereum ETFs... Nvidia briefly dethroned Apple as the second most valuable company before slipping back... And Jamie Dimon announced he's staying at JPMorgan "until I die or the board fires me"—narrowing his exit options considerably.
