They're at it again. Donald Trump and Jerome Powell—the oddest couple in economic policy—held their first meeting since 2019, reigniting a relationship that has all the warmth of a January dip in the Potomac.
The former president summoned the Federal Reserve chairman for what appears to be a preview of coming attractions, should November's election swing his way. As someone who's tracked this financial soap opera since Trump first started tweeting about interest rates at 5 a.m., I can tell you this reunion was about as surprising as finding inflation in the grocery aisle.
Look, we've seen this movie before. Trump wants lower rates. Powell wants independence. The market wants certainty. Nobody gets exactly what they want.
What makes this particular meeting fascinating isn't just the timing—though holding it while Trump campaigns for a second term is about as subtle as a casino billboard—it's the economic backdrop against which it unfolds.
Interest rates hover at 4.25-4.50%. Inflation, while down from its peak, still lingers uncomfortably. The job market? Cooling but not cold. It's a complex economic picture that doesn't lend itself to simple solutions or, dare I say, presidential tweets.
(I should note that I reached out to both camps for details on the meeting. The Fed offered their usual boilerplate about "constructive discussions," while Trump's team described it as "very good." Translation: nothing substantive to report.)
The history between these two isn't exactly heartwarming. Trump appointed Powell in 2017—reportedly passing over Janet Yellen partly because, and I swear I'm not making this up, he thought she was too short for the role. Height requirements for central banking... who knew?
Then came the barrage. Tweet after tweet. Interview after interview. Trump hammered Powell for not cutting rates fast enough, comparing him unfavorably to the leaders of other central banks and even—in one particularly memorable moment—wondering aloud whether Powell or Chinese President Xi Jinping was "our bigger enemy."
Central banker as enemy of the state? That's... different.
Powell eventually cut rates in 2019, a move many economists now view as premature and possibly contributing to the inflationary pressures that followed. This time around, he seems determined to stick to his "data dependent" mantra—Fed-speak for "I'll move when I'm good and ready, thank you very much."
The markets barely reacted to news of the meeting. Treasury yields yawned. Stock indices shrugged. Either investors have become numb to this particular political theater, or they've already priced in a future where the line between monetary and fiscal policy grows increasingly blurry.
For everyday Americans wondering what this means for their mortgage rates or retirement accounts, the short answer is: probably not much, at least not immediately. The longer answer is that presidential pressure on the Fed rarely ends well for anyone except politicians seeking short-term gains.
I've spoken with several economists who privately worry about the precedent this sets. "The independence of the Fed isn't just some academic concept," one told me over coffee last week. "It's fundamental to economic stability." He paused, stirred his latte. "But try explaining that in a campaign speech."
Trump's economic approach has always favored growth over inflation concerns, deficits over balanced budgets, and Wall Street over... well, almost everything else. That formula worked brilliantly until suddenly it didn't—right around the time inflation started climbing faster than gas prices on a holiday weekend.
Powell, meanwhile, is walking that central banker tightrope—cut rates too soon, and inflation might surge again; hold too long, and the economy could tip into recession. Now add political pressure to that balancing act.
No wonder the man looks perpetually tired.
The absurdity of this situation isn't lost on market veterans. Having covered Fed policy for years, I've watched the institution transform from a mysterious conclave of economic priests to a political football kicked around with abandon.
What happens next? If past is prologue (and in Washington, it usually is), Trump will continue his public campaign for lower rates while Powell will continue insisting on Fed independence—all while gradually bending to the political winds without admitting he's doing so.
Markets will bounce between worry and excitement. Economists will write serious papers analyzing it all. And somewhere, Paul Volcker—the Fed chair who once raised rates to 20% to combat inflation, political consequences be damned—is spinning in his grave.
This economic theater of the absurd would be entertaining if the stakes weren't so high. But they are. And that's the thing about economic policy—it eventually affects everyone, from Wall Street traders to the cashier at your local grocery store.
For now, we watch and wait. The Trump-Powell saga continues, with all the subtlety of a reality show elimination round. Only this time, the elimination might be of Fed independence itself.
And that's no laughing matter... even if some of the dialogue is.
