Statement from Jerome Powell | Hacker News Reader

Statement from Jerome Powell

federalreserve.gov

924 points0xedb808 comments

The US drift into Adam Curtis' broad thesis in hypernormalisation(a) continues apace I see. Great to see J Pow putting up a fight but I fear this is all going one way.

(a) >We live in a world where the powerful deceive us. We know they lie. They know we know they lie. They don't care. We say we care but do nothing.

> I fear this is all going one way

That belief isn't the consequence of the situation, but the cause. There is ample ability to change events, but people must believe they can act and act together, as they have for centuries of democracy and for all human history. They do it in Iran. The Republicans and MAGA movement have made changes that would have been unbelievable ten years ago.

> There is ample ability to change events, but people must believe they can act and act together, as they have for centuries of democracy and for all human history.

This is the political will of a plurality of American voters. They certainly can't claim they didn't know what they would get, and they seem unconcerned by any of these actions that many of us find terrifying.

It is difficult to see how we can democracy our way out of this situation.

If food keeps going up, it might get there but in the affluent west we run on our stomachs and as long as most of the middle class can still afford bread there won't be enough of a mass mobilization to affect any meaningful change.

Stated differently, if things really are so bad (and I would be the first to agree that things are pretty bad), then why are so many comfortable people (like me) not out on the street every day?

There are a lot of reasons for that, of course, but the bottom line is that when things get bad enough -- much worse than they are today -- then more people will take to the street, along with whatever sacrifice that entails. We're just not there yet, because for many, there is far too much to lose.

Most people, myself include, believe Powell has been a DNC puppet for his entire tenure. This has pretty much nothing to do with our republic.

For most of this countries history you would have been laughed at if you used the D-word, and that's when the quality of voters meant something.

Divide and conquer...

> That belief isn't the consequence of the situation, but the cause. There is ample ability to change events, but people must believe they can act and act together, as they have for centuries of democracy and for all human history.

True. But it’s very overwhelming since we are so democratically inept right now.

> They do it in Iran.

We know this because the local elites underlined it for us.

Curtis's HyperNormalisation, a BBC documentary, for those unfamiliar:

<https://en.wikipedia.org/wiki/HyperNormalisation>

Video, at BBC Online: <https://www.bbc.co.uk/programmes/p04b183c>

HyperNormalisation is one of many great documentaries by Adam Curtis, many of which are available on archive.org [1]. Specifically, I can recommend The Century of the Self and The Power of Nightmares. No need for YouTube :) FWIW, these used to be able on Google Video back when that still existed. And via torrents.

[1] https://archive.org/search?query=creator%3A%22Adam+Curtis%22

HyperNormalisation (2016) 2h:46m for those outside the UK https://youtube.com/watch?v=Gr7T07WfIhM

And for anyone who is nervous about clicking that video link at work: BBC in this context stands for British Broadcasting Corporation, which is a fairly well respected news group.

When I first watched a bunch of Adam Curtis stuff I thought it a long winded way of stating bad things have happened and have resulted in these bigger, overarching, bad things.

Thinking about it now 10 years later it feels alot different. The pervasiveness of tolerance of lies and fakeness has gone so far past anything I could have imagined being a big contributor to that.

For me, the key lies in the "We know they lie. They know we know they lie.". I'd argue that the transparency of lies is a fairly immature theme, relative to the long arc of history. Probably post-Iraq WMD is where I think it really started to ramp up and the emergence of virality/segmentation aspect of social media has really revved it up.

I have to say, I'd never heard of Adam Curtis or the HyperNormalisation documentary.

I just watched the first ~30 min and I'm not seeing the "bit picture". Hopefully, it won't take me another 10 years to achieve enlightenment.

Curtis tried to make these statements on the downside of neoliberalism + postmodernism but I don't think he did a very good job based on the discussion on these films.

I think his work is just too stylized. He has such an interesting style that it overwhelms the message. I barely remember what his messaging is in films. Just the interesting visuals and ominous music.

If you read Undoing the Demos by Wendy Brown and Lyotard's The Postmodern Condition together you will understand exactly what he is going for. As a film it doesn't really work that well though beyond a kind of depressing entertainment. The themes are too subtle and philosophical along with most people don't have the background knowledge to really make sense of his points.

Hasn't this always been the case, what is different right now is that the tech enables to do this at scale, at much higher frequency that makes them more audacious, since no regular person can keep up with it. The over saturation of lies/fake news has lead to numbness and the hyper-normalisation. So, unless something directly is affecting us currently, we won't care

No. The modern Republicans want you to believe that because it’s an easy path to despair and inaction, which means they win, but the magnitude and degree have varied significantly in the past. Where we are now is something living Americans don’t have experience with unless they escaped somewhere like the Balkans in the 90s.

People do nothing because they believe others are doing nothing and it's a suppressive feedback loop that's exploited. Repeating that people know and do nothing reinforces it and falls into the broad category of criticism for the the sake of social flagging and not towards actual growth.

This is clearly a fraudulent criminal investigation. Classic dictator strategy of charging opponents with trivial crimes to achieve political power grabs. US futures in stock market are way down.

But I bet a third of the country will blindly support it. They will see it as a just investigation into a crime. And they won’t care about the consequences. Or connect cause and effect. And with that much support the administration can get away with anything.

As for their various unconstitutional and illegal acts - what method is there to hold the executive branch accountable? It’s not like there’s a police force to arrest them right?

Who is "we"? I'm not doing nothing. Why are you doing nothing?

Nothing that effects real change.

Evidence, the lack of change.

I think the real test will be, not whatever this administration does, but how much of that survives into the next one - how much is the new normal versus how much is a temporary aberration.

That’s true even if the next administration is Republican (Vance or whoever), but especially true if the next administration ends up being Democratic instead-which while not certain, has decent odds-the more Trump defies norms, the more voters who will wish to go back to a “normal” Presidency

I'm not sure?

Some things, it just doesn't matter what the next administration does. The people of the US may, at any time, elect an administration that continues the course of breaking norms. The fact is that businesses, industries, banks, and nations have to guard against that possibility more than they need to cooperate with the next administration.

I think it's a bit fanciful to think you can take all the policies back to normal and have, Europe for instance, say "Oh good! Everything's back to normal!" I could be wrong, but I think that ship has sailed. Europe will work towards a new normal that looks to their own interests. And no action the next administration can take will change Europe's determination in this regard.

I think this will be as true of actors in the financial and industrial spheres as it will be of Europe in the security sphere.

> I think the real test will be, not whatever this administration does, but how much of that survives into the next one - how much is the new normal versus how much is a temporary aberration.

A reminder that this is the second time that Trump has been elected.

(People were saying what you're now saying after he was kicked out—an event that he says was rigged—the first time.)

I think the test beyond that is how willing the next government will be to codify meaningful changes into law. After Trump’s first time it’s as if there was a big sigh of relief and a notion of “well, we just won’t do that again”.

It’s very clear now that we need a lot more regulation of what presidents can and cannot do. Not to mention judicial reform. But if you’re a democrat theoretically getting power in 2028 you’re going to have immense pressure to move forwards, focus on kitchen table issues, yadda yadda.

One thing I think is sometimes forgotten about shifting the overton window is that it sort of doesnt matter what political leaning has their hands on the lever. When it serves a purpose, which is not always a public first purpose, people in power will leverage any lever possible. Shifts in the overton window, just add more levers and it comes down to benevolence or luck that those levers aren't used incorrectly

> We say we care but do nothing.

Historically this is always the case until it absolutely isn't. And things just boil over.

Rupture -- often revolutions -- are entirely unpredictable, and cascading. They often occur after several failed attempts make it seem like the discontent has been at least partially contained (e.g. Russia in 1905 vs Russia in 1917). Maybe we're seeing this in Iran right now.

The kind of governance that Trumpism is attempting is inherently unstable. My guess is its higher level adherents know this. They just want to get theirs while they still can. Should be obviously the case as its very figurehead is obviously not thinking long term as he only has a few years left to live.

If I might add a couple of quotes:

"What prepares men for totalitarian domination in the non-totalitarian world is the fact that loneliness, once a borderline experience usually suffered in certain marginal social conditions like old age, has become an everyday experience of the ever-growing masses of our century. The merciless process into which totalitarianism drives and organizes the masses looks like a suicidal escape from this reality."

"Politically speaking, tribal nationalism always insists that its own people is surrounded by ‘a world of enemies,’ ‘one against all,’ that a fundamental difference exists between this people and all others. It claims its people to be unique, individual, incompatible with all others, and denies theoretically the very possibility of a common mankind long before it is used to destroy the humanity of man."

"Society is always prone to accept a person offhand for what he pretends to be, so that a crackpot posing as a genius always has a certain chance to be believed. In modern society, with its characteristic lack of discerning judgment, this tendency is strengthened, so that someone who not only holds opinions but also presents them in a tone of unshakable conviction will not so easily forfeit his prestige, no matter how many times he has been demonstrably wrong."

"Mass propaganda discovered that its audience was ready at all times to believe the worst, no matter how absurd, and did not particularly object to being deceived because it held every statement to be a lie anyhow. The totalitarian mass leaders based their propaganda on the correct psychological assumption that, under such conditions, one could make people believe the most fantastic statements one day, and trust that if the next day they were given irrefutable proof of their falsehood, they would take refuge in cynicism; instead of deserting the leaders who had lied to them, they would protest that they had known all along that the statement was a lie and would admire the leaders for their superior tactical cleverness."

"The ideal subject of totalitarian rule is not the convinced Nazi or the convinced Communist, but people for whom the distinction between fact and fiction (that is, the reality of experience) and the distinction between true and false (that is, the standards of thought) no longer exist."

-- Hannah Arendt, The Origins of Totalitarianism

Also Arendt: "The result of a consistent and total substitution of lies for factual truth is not that the lie will now be accepted as truth and truth be defamed as a lie, but that the sense by which we take our bearings in the real world — and the category of truth versus falsehood is among the mental means to this end — is being destroyed."

At least some selection mechanisms are still working. Every time he does something like this, the world dumps a bunch more US currency.

He certainly doesn't beat around the bush here. Very nice too see someone of his stature stand up and call out these shenanigans for what they are.

His term ends on May 15, 2026, so it's almost pointless to file these charges now.

I see what's happening now as game-theory signaling, not as a real threat to Powell. I would suggest that this action is better seen as a latent threat to the next Fed chairman to let them know that they will either enact Trumps desired Fed policies or they will be prosecuted for anything that the administration can manufacture.

It's also important to remember that Powell is not the only Federal Reserve Board of Governors to have very odd accusations of wrongdoing and investigations launched. He's also done this with Lisa Cook. It seems pretty blatant at this point what's really happening.

> His term ends on May 15, 2026, so it's almost pointless to file these charges now

His term as chairman ends in May. He remains on the Board of Governors after that. Following this fight, he may remain the most prominet voice despite losing the chairmanship.

Remember early in his first term when he tested waters but the governmental system pushed back and kept him in check? It feels like an out of body experience to look at this and contemplate how much he’s changed about how the U.S. government conducts itself.

In his first term, he probably didn't yet understand how much power the office truly holds and how to wield it and just how far you can go with that. Because the main restriction on all of that power has always been convention rather than any actually robust guard rails. But no one, not even someone like Nixon, has ever dared to truly test that out.

He knew how much power he had back then. The difference was that the government bureaucracy worked hard to counter his agenda throughout his term. It’s why The Heritage Foundation came up with Project 2025: an organizated and cohesive plan to dismantle the bureaucracy and consolidate power. And it is working.

I hate to assign him so much agency. The man seems a complete buffoon who lacks the ability to plan anything beyond real estate fraud. Instead, I look to all of the people in his orbit who can orchestrate long term goals. Sure, he will self sabotage many schemes, but will directionally go where the handlers want. Vance, Miller, Heritage Foundation, etc are the ones guiding most policy decisions.

That tariffs have been so absolutely scattershot, says Trump actually is the one calling the shots there.

Cause most of the capricious use of power is expensive and people used to care about the budget.

He still doesn't understand, I think anyone that sticks all of this to Trump is playing exactly in the hands of the powers behind him: The Heritage Foundation, Federalist Society, billionaires like the Koch, Stephen Miller, Bannon, so on and so forth, they would love to have Trump as the scapegoat for all of this.

Trump is not a smart person, he doesn't know much aside from what he's been told, and the people playing him to further their agendas would love more than anything to be kept in the shadows in case it all comes crumbling down to just pin it all on Trump, the moron.

He was rewarded with full control of every branch of government. What did we expect?

And that happened even after they arrested him and tried to put him in jail. What's happening now might be shocking but not unexpected at all.

Through what mechanism is he controlling the other branches of government?

He's also appreciably more senile now, and a common manifestation of that is lowered inhibitions. I'm not saying that Trump was great at 70, but now that he's 80 he's considerably less in control of himself.

(If you doubt this, go watch some clips and compare how he talks now to how he talked during his first administration. If you were concerned about Biden's state in 2024, you should be concerned about Trump now.)

Trump #1 came unprepared, that hasn't repeated.

I think it’s more like the opportunists weren’t prepared. Now they’re feasting, and Trump is easily exploited.

So I'm sitting here as a Canadian wondering what the American people are going to do? I understand a lot of what the President of The United States says - I even agree with some of it, the problem is I don't feel like we're engaging with the American people anymore. I really wonder where you guys are headed and what it means for the rest of us, I spent 15 years in the states, built a public company there, I really like the Americans, but I don't want annexation. I wonder where you guys are headed.

> I wonder where you guys are headed.

You need to know only two facts about America to guess that:

* Fifty three percent of Americans now read below the sixth grade level.

* As (ostensibly) a representative Democracy America's fate is dictated by the majority of it's citizens.

Our future is to become a broken nation governed by middle-school student level thinking. The only way to build a better America is to build a better populace, and that would be contrary to the interests of the angry, spoiled, children who seem to hold all the power now.

> * As (ostensibly) a representative Democracy America's fate is dictated by the majority of it's citizens.

No, it's determined by the people who actually go out and vote.

Bizarrely, voter turnout among younger people remains low. It's beyond frustrating to work with large groups of young people who are seemingly always talking politics and angry about something political, then to watch as half of them either forget to vote or act like they're too apathetic to vote.

The craziest part was seeing this apathy play out in states with vote-by-mail systems that required as little effort as possible. I still don't get it.

    > Fifty three percent of Americans now read below the sixth grade level.

I don't know what to think when I see these quotes. Are you writing a local newspaper opinion piece about the "decline of America"? How is it meaningful to this discussion? It's like a poison blowdart shot from behind the stage curtain that kills the messenger.

By the way, I Googled for the equivalent stat about Canada: "48-49% having skills below a high school level". I'm not here to bad mouth the Canadian education system, but I think you will find fairly similar stats in most highly developed nations.

I think it’s also important to talk about what it means to “read at a 6th grade level” when this is mentioned, because a lot of people (myself included) might assume that just means they could finish and understand a book intended for 6th graders.

But there’s actually meaningful criteria that sheds some light on the critical thinking capabilities of people who can or can’t read at certain levels, especially as it pertains to propaganda. Below a certain level, people are not well-educated enough to critically assess a text against the motivations of its authors (somewhere around 9th grade). Americans are prone to conspiratorial thinking so you might think that that’s alright because they’re often skeptical of any text, but it just seems like it causes them to dig even deeper into the propaganda that’s targeted to them.

It’s kind of like learning that some people don’t have an inner monologue, or that they aren’t capable of imagining shapes or objects abstractly in their mind. Except it’s a lot more serious as it deals with critical thinking directly: these people don’t understand that what they’re reading was written for a purpose.

Why is literacy so important? Wasn’t literacy lower in the US at other points in time?

> Fifty three percent of Americans now read below the sixth grade level.

I thought this was a joke. Like, holy shit I regret looking this up and finding out it's not BS

https://www.snopes.com/news/2022/08/02/us-literacy-rate/

In what language? 78% of Americans have English as their first language.

> It's so simple: everyone is stupider than me. These are facts dontcha know. The science is on my side.

America has enough power to help someone else. No one has the power to save America from itself.

The cavalry is not coming, and this fire is going to take its course.

One day, maybe we will rebuild from scratch.

> No one has the power to save America from itself.

Wrong!! Please don’t say that! We all have power inside the US. Congress had the opportunity in 2021 to correct the wrong, but Republicans kowtowed and they are still doing so. That was the easy way. Now for the hard way, American people will have to do something about it.

Edit: Grammar

> One day, maybe we will rebuild from scratch

The current situation is bad, but this is just doomerism.

The current administration will end. Trump can't live forever. His approval rating is already low and falling.

We're in for a bumpy ride, but then it's going to start reverting toward the mean. Not necessarily back to the way things were, but periods of extreme like this are followed by a reversion to the mean more often than not.

The problem is that a lot of what is happening is within the executive branch's power and/or democratic. A nontrivial number of Americans support everything that has been happening. The expectation at a time like this would be that you have checks and balances working, but all other branches have yielded their power. I find that jaw dropping personally, but it's where we are. Midterms are happening soon and are the right place to disrupt congress.

There's basically nothing the American people can do short term.

The US government is entirely non-responsive and only nominally representative.

Barring a wave of Republican retirements in the House, the absolute soonest there are any guardrails are after the 2026 midterms when a new congress is seated in 2027.

Gerrymandering, infinite lobbying corruption, and manufactured consent are supposed to keep the populace doing and thinking what the 1% want, and cheating to help them. They can't even do those properly anymore with vast resources. Perhaps billionaires and failed celebrity reality stars don't make the best public administrators.

> There's basically nothing the American people can do short term.

If there are ICE agents in your area follow and film them. Create evidence of their jackboot tactics.

Most folks do not like force/violence, and the more people see the jackboot policies and actions of one side, the more folks will lean towards the side(s) that are against those policies.

58% of Americans were okay with goverment shooting at protesting students at Kent State shooting.

There are still some things. A handful of court cases have gone against the trump admin and they have (in many cases) respected them. For example, the suits against national guard deployments in chicago. Donating to organizations using the courts to leverage the law against the trump administration does have material effects.

The senate can also still hold some things up. If you have a senator who keeps voting for trump's judicial appointments or you have a senator who is in leadership then yelling at them to stop letting trump's judicial appointments sail through is important. The fact that the dems are not using every procedural step to slow down the process is ridiculous.

Of course there’s, it’s just that anti-Trump people don’t care as much and are not as brave as the pro-Trump people. MAGA people stormed the capitol, anti-Trump people just write well thought concerns on the internet. MAGA people for years endured deplatforming and being outcasts but developed methods to deal with it, the anti-Trump people are scared to lose what they have and are too concerned about their differences within and they are unable to build anything. It’s people with nothing to lose and everything to gain vs people with everything to lose and nothing to gain from having a fight.

Those who stormed the Capitol did it because they were against the current course of affairs. Are the anti-Trump people ever going to do something like that if they are against the current course of events? I don’t think so.

Consequently, Trump will win. That’s why people who control the capital are aligned with MAGA.

People are out there protesting right now even though ICE and the police have a history of shooting unarmed protestors. Leftists protestors are and always have been more harshly treated by this government than the other side.

If anyone is doubting this, look at how the police treat "ecoterrorists" versus mass shooters. Ecoterrorists in quotes because the real ecoterrorists are those polluting and destroying the planet for money, not a group of people that stop a machine from raping the land.

> People are out there protesting right now even though ICE and the police have a history of shooting unarmed protestors

I never understand what's the point of those protests. They should be taking over power by force or GTFO. Notice that successful revolutions storm the HQ, destroy some building of iconic significance or kill/capture the leader, not just enduring the atrocities of the foot-soldiers of the people who they are against.

The peaceful protest thing works when the people in the HQ care about what you think about them, which means it only works if those protesting are their people and not the opposition.

The lefties should start taking notes on what works and what the far right did to gain so much power and start stealing their methods. Display of dissatisfaction isn't going to work, if anything that dissatisfaction is satisfaction to the right wingers. They feel giddy when see the people they hate protesting, their only complain can be that the protests are not big enough.

The pro-Trump group don't think about consequences is the thing. The anti-Trump group do, and that's a big reason why they're slow to respond. Performing a siege on the Capitol was a stupid, angry, and impulsive reaction with no thought of the consequences afterwards. That's the way the entire pro-Trump group tends to act. Meanwhile the anti-Trump group think about knock-on effects and long term consequences because they understand that nothing is an island and that everything is connected to everything else, even through degrees of separation. It makes them hesitant to do anything right away because they first have to consider what the ripples are going to affect outside of the area of their immediate focus. One group is reactive and the other is proactive, and being proactive is always going to be slower.

I think it is much simpler than that: creation takes time, destruction is fast.

I don't think that's it. It has more to do with something to lose or not.

"The most dangerous creation of any society is the man who has nothing to lose"

Liberals are generally more empathetic towards others and have good intentions when protesting. However if they have a comfortable life they will back down very quickly when faced with force. Just my opinion, could be wrong.

A big difference is that if anti-Trump protesters tried to storm the Capitol like MAGA did, they would be shot dead.

Not doing much. Playing PC games and watching the world burn. Not much I can do.

Just bought a new 5080 this week. Hoping I can hunker down in my cave for the next couple years and see what's left of the world in 2030.

Oh yea, beer, lots of beer.

We vote. That’s all we can do. 50.5% of the people voted for this insanity in 2024. We can only hope they see how this is going and vote differently in 2026 and beyond.

Was it not 49.9%?

39% of the country still approves of him and his fractal waterfall of disaster. So many people, and so many now gifted power and immunity to swing it at dissenting voices. That's a lot of inertia.

In the "First They Came" poem, we're already at white Christian mothers, and it's not moving the needle. I'm not sure why there isn't more talk of succession on the coasts but at this pace, it feels inevitable.

How many people have sat down and "war gamed" this out? e.g.

Let's say that opposition to... Trump's unilateral rule, disregard for the constitution, interference with free and fair elections, building a private army and using it increasingly against immigrants and citizens alike, as long as they are "opposition" to Trump, etc... decides to get as organized and impactful as possible? What does that look like?

Some kind of public, open communication portal? A closed sign-up portal where you have to put in your information?

Some kind of plan to put a lot of bodies in one place? Peaceful protest? Armed and violent protest? (Literally insurrection against the authoritarian regime.)

Even the peaceful protest option which is scattered across 50 states, hundreds of cities, has resulted in some violent reaction by Trump's army, National Guard, even local law enforcement.

What are next steps for the American people?

I think those that are protesting by trying to keep it peaceful are holding onto hope that power is still somewhat distributed, and that elections still function enough to displace Trump loyalists (MAGA / Republicans) with Democrats that have at least paid lip service to being opposed to Trump. And maybe given a majority in Congress, they could at least enact impeachment.

But what else are the American people meant to do?

I fear we are headed towards world war, something bigger than America.

Time to get your PAL buddy

Complain to our representatives who will do absolutely nothing because the system is ripe for abuse and we’ve put people who actively want to abuse and exploit it into office.

I keep telling everyone and have been for a year, it’s not just our problem, due to global US positioning it’s now a world problem. Just ask Venezuela. Regardless of what you think about the end result the ends did not justify the means.

I for one will be collecting my (completely legal) hunting rifles and weapons I’ve had in storage since I was a kid, have them professionally serviced and grab some ammunition, on the terrible case I need to defend myself which I thought I’d never ever have to consider and I’d just sell them some day. But alas we have a lot of really really stupid as well as downright toxic voters in this country.

You’re all tooling up to defend against your neighbours instead of the people causing the political instability.

The outcome of this is all too predictable.

Nothing? Trump is playing freeway chicken with Powell, he's driving a Pontiac Fiero and Powell is driving a bulldozer. The Supreme Court has already signaled that they're not on board fucking with the Fed. This will potentially cost Trump his next Fed nomination for awhile, because GOP Senators are putting a hold on his nominations until the legal stuff resolves.

It's nothing. In a sane country Trump would have been impeached many months (or even years) ago and would have never managed to get a second chance at this.

If the continuation of the USA hinges on Powell the man should be given a spot on mt. Rushmore, but I don't think that it is going to happen. Congress and the senate are for the most part filled with people that are too afraid to act. And in the meantime a lot of other crazy stuff will happen (just look at the last 30 days) to push this out of the public eye.

They are headed for complete fascist take over. Going through a phase that Europeans went through a century ago, end up destroying themselves.

It’s very concerning that they have nukes. JD Vance said something about the risks UK and France owning nukes, I think he just wanted to start the conversation because I think he believes that it’s actually US that is the risk. We know that the guy is not actually a Trump ideology zealot from his pre-Trump alignment.

I think it'd be a mistake to assume that JD Vance is not exactly what he portrays himself as at this point. He certainly seems onboard with everything thats happening and is happy to defend it and push the boundaries for more lawlessness.

> Going through a phase that Europeans went through a century ago, end up destroying themselves.

That's not history as I've been taught it since grade school.

Many times I've disagreed with Powell, but major props for this statement.

I came in to say the same thing -- major, major respect to Powell.

I am not a big fan of his earlier policies (or of Greenspan's and anyone after him for that matter). His "unlearn the importance of M2" did not age well. He made the tail end of the ZIRP more painful than it needed to be. But those were honest mistakes from a public servant who did his best and believed in what he is doing.

And standing up for what he believes is right, against this insanity from the president is the gold standard of what we need from public servants. My 2c.

Courage in short supply, refreshing to see it flexed.

I hope that some heads of universities, CEO's and people running important journalism outfits are looking at this and feeling a deep sense of shame.

It's honestly depressing how little push back there seems to be.

Yes.

His statement is firm and well articulated. I have nothing bad to say about the man right now

I have bad things to say about him. But they're firmly on pause. What Trump wants for the Federal Reserve is far worse.

And anyone who is a hard-currency quantity-theory-of-money conservative, should also be appalled by it.

Trump is way worse than what the harshest critics of the Federal Reserve think about it. Nobody right or left should support it. Only the billionaires will profit off the monetary disorder.

Would love to hear what you've disagreed with because the man pulled off what can only be interpreted as a miracle in landing the economy nearly back on the 2% target with no massive economic problems after we went through an unprecedented pandemic, during which Trump printed $3.5 Trillion, causing massive inflation (yes, Trump did that, not Biden).

Its crazy how you can see where things are heading and still be surprised when they arrive there.

Everyone calling it out was named a doomer.

Well doom is here. Congrats.

America has reached the inter-departmental warfare stage of failed states it seems. As an appreciator of all sorts of banana republics, kleptocracy and military juntas, this is a very familiar pattern of behavior.

Couldn't disagree more. Failed states normally have a single department (the military, often) dictating without opposition what other departments should do. Here we see a functioning system, the President presses, the Fed disagree and push back. The President weaponizes the judicial, yes, but it'll be a long shot. Nothing here smells to a failed state.

"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President."

Thank you, Mr. Powell. We really want interest rates set to serve the people, not the whims of the President.

Shots fired. Even the republicans will not be able to ignore this and they know that if Powell caves in the American economy will likely collapse. So who will speak up in his defense?

> Even the republicans will not be able to ignore this

Oh boy would I love to join you in whatever alternate dimension you live in.

Money rules everything and if there is one thing the donor class will not lose is their money. They are willing to turn a blind eye to the ripping up of the Constitution but as soon as you rip up the money, phone calls will be made, meetings will be had, and Vanguard and JP Morgan and Walmart will get what they want.

Republican representatives have been very much behaving like cattle, they're scared and they think that there are no other options but to cower and to jump to Trump's every whim. If one of them stands tall and survives (which remains to be seen) and speaks up then quite possibly others will follow.

It's probably going to collapse anyway. He's been hitting all of the pillars of the economy with a sledge hammer.

I wonder how the stock market would look if AI wasn't such a big driving factor. Or how it would look if there was no sledge hammer. Insane times.

Yes, but for now the USD has more or less survived. If Trump forcibly removes the FED chair on a pretext things could go downhill very fast. You can probably kiss the USD as a reserve currency goodbye overnight and China is going to have a real problem given the amount of debt they hold. This could easily knock the last pillar that holds it all up away.

Republicans ignored a literal coup

I don’t believe this will cause the collapse in the economy (short to mid term) that you are expecting, where I am defining “this” as a federal funds rate that is politically driven and lower than what Chair Powell would have otherwise set. On the contrary, I think it will largely benefit the kinds of affluent asset holders that comprise the top say 5% of the country, which probably accounts for most members of congress and the senate. I think those people will look around them and think this is ugly but otherwise fine. The inflation that follows will be painful to the rest of the country and, with any luck, an opposition party will be able to create a political narrative out of some solution to that pain.

Uh have you met Republicans? Anyone not fully onboard that had even half a spine retired or got voted out. The rest either love it or just fall in line so they can collect paychecks.

> Even the republicans will not be able to ignore this

GOP: "Hold my beer."

Yes, there is a chance of that.

This is... just crazy. One of those mostly boring bits of plumbing that has been left to professionals throughout the entire 50 years of my life - and they're trying to wreck it.

> One of those mostly boring bits of plumbing that has been left to professionals throughout the entire 50 years of my life - and they're trying to wreck it.

There is even a more boring and obscure bit of plumbing, the Treasury payment system, that they/DOGE went after last year:

* https://arstechnica.com/tech-policy/2025/01/musks-doge-clash...

* https://news.ycombinator.com/item?id=42904200

* https://hn.algolia.com/?q=treasury+payment+system

Every knee must (forced to) bend.

It's also completely in character with Trump's behaviour. He is a dictator who wants what he wants and can't abide anyone standing in his way. He wants absolute authority to do as he wishes. This extends to removing foreign heads of state so he can access their countries resources and also threatening 'allies' so he can take their territory. We're watching him systematically destroy any good will or moral authority that the USA held.

It's also for very stupid reasons: The fed dropping rates to the degree that would satisfy Donald Trump would greatly accelerate inflation which in turn would further upset voters, who would in turn blame Donald Trump (just like they did Biden before).

This week's episode of "Not the Epstein Files".

There hasn't been a single point in my shorter life so far where things have been this out of control. The fed is supposed to be as non-political as possible. I know politics and the economy are intertwined, but tell me how this won't end up a disaster please. How do we get back to the USA we had even 10 years ago?

I can't say I'm the biggest fan of the financial apparatus in general but it is more than a little heartening to see someone in the federal government with a spine for once.

He's one of very few adults left at that level.

It might be childish, but I think the “act like an adult” (or not) is a good way to frame the bad behavior that’s been so present lately.

It encapsulates so much of how I want to describe things.

Selfish behavior - this adult is just a child who didn’t learn to share.

Mean and vindictive behavior - didn’t learn to empathize as a kid

Lying? You’re still a child. Grow up and then join the adults.

you mean for not cutting interest rates, right?

Best of luck JPow - that was a perfect statement from the Fed.

It seems like theres a bit of an inflection point right now in the US. I wonder how much entropy the system can handle it has to be near a breaking point.

Observation:

> Some countries that have prosecuted or threatened to prosecute central bankers for the purpose of political intimidation or punishment for monetary policy decisions: Argentina, Russia, Turkey, Venezuela and Zimbabwe.

* https://xcancel.com/jasonfurman/status/2010532384924442645#m

* https://en.wikipedia.org/wiki/Jason_Furman

And Senator Thom Tillis (R-NC)

> If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question.

> I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved.

* https://xcancel.com/SenThomTillis/status/2010514786467959269

who sits on the United States Senate Committee on Banking, Housing, and Urban Affairs (which oversees the Fed):

* https://en.wikipedia.org/wiki/United_States_Senate_Committee...

The "independence and credibility of the DoJ" line is quite something else.

There’s no question about the independence of the DoJ. Its independence is undeniably gone and it is full on working as Trump’s enforcement arm. Anyone who tries to argue otherwise is a clown.

Thom Tillis is a liar and will immediately confirm whoever Trump nominates. There are no examples of Tillis or other prominent republicans ever coming together to actually effectively oppose a Trump nominee (see the current secretary of defense, or leader of DHS for evidence).

Matt Gaetz didn't get the AG spot - there was at one point some kind of a line.

I wonder if we'll see another round of resignations at Justice like the Eric Adams thing.

Powell normally talks around the political pressure he's been subjected to. Funny to see him call it out right here.

I think that the President has too much power and should have only a symbolic role, limited to soft-powers

Well the power is limited but weve also allowed every check and balance to be given to sympathetic cronies.

What an unhinged moment in time. At some point, they'll need to be courageous people with the ability and funds to speak up and say enough. But will they? It does not appear so.

Here's Trump and Powell publicly disagreeing about these exact Fed renovation costs in July 2025: https://www.youtube.com/watch?v=EvYljCN970s

Powell corrects him in real-time. Worth watching given today's statement.

It seems like they learned a lot from the Letitia James and James Comey cases, which are going great (not in the way they intended).

From an institutional engineering POV (warning- I am a grouchy old former political scientist), it would be interesting to come up with institutional solutions for some of the problems America is facing right now. Specifically I think I'd remove the Attorney General role from the President's authority and give it to Senate, to nominate & confirm exclusively. Let's say 51 votes to confirm and 55 votes to impeach. Even among presidential systems, the US cabinet is unusually presidential-centric. I'm not a big LatAm expert, but I think they typically separate the public prosecutor from the president's nomination capacity.

Of course I would strongly prefer to not be a presidential system at all. But if we're discussing post-Trump constitutional reforms that could plausibly pass, I think removing the Attorney General/DOJ from the president's purview and also placing some checks on the pardon power seem doable

>Of course I would strongly prefer to not be a presidential system at all.

Having grown up in the US and having blinders on, I always thought all those parliamentary systems seemed unstable and sometimes comical. But now I see the value in it. Once a leader has demonstrated he is not up to the task, has grown out-of-touch, or has descended into madness, he can be replaced by his party, and if that didn't happen, a no-confidence vote could trigger an election. No guarantee either of those things would happen, but the option exists. The fixed four-year term idea now seems artificial and inflexible.

I suspect the current US leader and maybe even the previous US leader (maybe in his 4th year) would have suddenly found himself a back-bencher.

Also, the ‘leader’ in a parliamentary system is simply a lot less powerful. The executive is the cabinet, not the PM. The PM usually appoints it, but the ministers don’t get to fall back on ‘just following orders’; they are very much using their own authority. And again there’s always the threat of replacement of PM and re-alignment. Realistically, the threat is more important than the thing itself.

> Having grown up in the US and having blinders on, I always thought all those parliamentary systems seemed unstable and sometimes comical.

There are so many different variables between countries, and plain luck, that it's tough to extrapolate too much, but this just jumped out a bit for me as a Canadian - the average Canadian PM term has historically been marginally longer than the average American Presidential time in office.

This would give congress much more power over the Executive branch. The justice department is run by the Executive branch. Congress's job is to legislate, not prosecute crimes. A president can be voted out or impeached if they do something bad.

It's not like campaigning and running elections are terribly hard these days. The AG (and other heads of independent executive departments) should be each their own races voted on by the public. (Yes, this obviously requires repudiating this new innovative brain damage called sparkling autocracy theory^W^W^W unitary executive theory.)

We also need Ranked Pairs voting so we end this two party duopoly bullshit. Primaries can remain, but voters should be able to vote in all parties' primaries (rather than having to pick just one).

We also need some sort of recall mechanism, either periodic option to vote no confidence (twice a year when elections/primaries are already held?), or something triggered when signatures/polling get high enough.

Since I'm making my Christmas list, we also need to drastically neuter sovereign and qualified immunity - remove their applicability for any action not explicitly authorized by the legislature (and Constitution). No more general "agents of the government" who unilaterally act with impunity, with only narrow legal ways of recovering damages.

But part of the difficulty that has precipitated our current situation is the absolute gridlock in Congress for the past twenty+ years. That's what pushed more and more power into the executive and executive agencies. I don't know if Ranked Pairs would be enough to fix that with fresh blood, or we need more direct democracy (voters can override their sen/rep vote on a bill?), or what. Maybe triple the number of sen/reps from each district so that voters won't feel they're losing their experienced politicians if they vote out the worst of the three.

I believe that if Trumpism is overthrown (because that's probably what it will take) there will be considerable effort to change the rules and set up strong constraints on the executive branch that cannot just be worked around by blowing past the guardrails. Trump exposed how weak the balance of powers actually is and how much it relies on (somewhat) good actors.

I dislike the existence of the Fed, but I dislike the idea of the executive branch being in control of monetary policy even more. I'll be tuning in to see how the case progresses.

Do you have an alternative to the Fed? Likes and dislikes has nothing to do with it. Or let me ask you another way — why do you dislike the Fed?

You can dislike a solution but admit that you can't think of a better solution, or specify that it is better than an even worse solution.

I can see why someone would have a issues with "a bunch of rich bankers appointed by politicians" controlling American monetary policy. But I can't really see a better way at least, until we can achieve a post-scarcity economy or something.

> Do you have an alternative to the Fed?

The appears to be difficult for a lot of people to like, but the Fed still exists because the people who bitch and moan about the Fed can never voice an alternative that wouldn't immediately destroy everything if it were implemented.

The eradication of the Fed and fiat money. As others have expressed, I also think the interest rate mechanism is clumsy and that bailouts do more harm in the long term than good (see one of the most recent examples [1]).

[1] https://www.wsj.com/finance/banking/the-fed-launched-a-bank-...

The libertarian view is that interest rates should be decided by the free market and not a central bank. Mainly due to what we're seeing now (the executive trying to take it over) and that a small board of people can make bad decisions that have reaching effects.

The FED is much maligned, but has brought a lot of stability to the economy.

Monetary policy is actually under the purview of the legislative branch.

Section 8: Congress shall have the power ... To coin Money, regulate the Value thereof ...

You probably don't them in control, either.

Who should own the money printer if it’s not the feds?

Threats like the ones Powell's receiving would be the end of any other presidency. Why tech elites continue to align themselves with this clownshow will be a source of incredible shame that I'll hold onto forever.

Mafioso politics

The tech CEOs will have to do a whole lot of explaining, relocating and, perhaps, other things once this clown show is gone after 2028

I really wish that were true but they won’t. They’ll just keep on keeping on.

As I've written in another post, everyone is doomed to either align or face his rage.

So, better face his rage then. If those are the options the choice is clear and easy.

I think a lot of largest tech companies feel that they'll face retribution from the current administration for not being supportive enough but would not from future admins.

For many of the smaller players I think there's unfortunately a lot of people who realized there's significant money to be made in grifting. Many of the largest crypto proponents have pivoted into endeavors, whether crypto or otherwise, that profit off of being rewarded for being part of the 'correct' tribe.

> I think a lot of largest tech companies feel that they'll face retribution from the current administration for not being supportive enough but would not from future admins.

Hopefully we get the opportunity to disabuse them of this notion.

> I think a lot of largest tech companies feel that they'll face retribution from the current administration for not being supportive enough but would not from future admins.

The Democrats should play hardball but the geriatrics can barely take a swing.

I would be heavily predisposed to vote for any candidate who had a public goal of breaking up the big tech companies and taxing their CEOs into oblivion. I want this primarily because of the immediate about-face they all had when Trump 2.0 was elected and them all contributing to and standing behind him during his inauguration. Had they not, mercifully, all shown themselves as the snakes that they are I probably would have mostly continued to considere them a-political-ish and not been strongly opinionated.

this is a big deal, markets gonna tank tomorrow morning... and then realize AI is still a thing and recover

Or realize it means interest rates are sure to be dropping.

and remind themselves there is way too much cash sloshing about for a broad-based and lasting market retreat.

https://fred.stlouisfed.org/series/M2SL

AI is a bubble; well, the stock market as a whole is, being led by an AI boom. At the end of a bubble (and it's not clear if we're there yet) markets find ways to self-finance. A crash means not just that the value is lower, but that the leveraged bets are now due, and those have to be paid by selling more.

When it crashes (and it's not clear when that will be), it will crash back to a cash-value baseline. And, sigh, it's not clear where that is. But it won't magically start going back up. The cyclic reinvestment engine needs to be reinvented every time.

For those,like me, who do not wnt to go to youtube:

https://www.cnbc.com/2026/01/12/fed-jerome-powell-criminal-p...

https://www.msn.com/en-us/news/us/federal-reserve-chair-powe...

Official written statement (same as the speech given) for those who prefer https://www.federalreserve.gov/newsevents/speech/powell20260...

(This comment was originally posted to https://news.ycombinator.com/item?id=46582441, before we merged the threads)

For people who don’t know what this is about and why everyone else is concerned…me neither.

2025-10-03

"You Decide: What Does the Fed’s Rate Cut Mean?”: <https://cals.ncsu.edu/news/you-decide-what-does-the-feds-rat...>

2025-12-10

“A divided Federal Reserve cuts interest rates for a 3rd straight time”: <https://alaskapublic.org/news/national/2025-12-10/a-divided-...>

"‘Silent Dissents’ Reveal Growing Fed Resistance to Powell’s Cuts”: <https://archive.is/JDlB0#selection-1235.0-1235.64>

2025-12-30

"Fed Minutes Reveal Split on Interest Rates Headed Into 2026”: <https://money.usnews.com/money/personal-finance/articles/fed...>

"Deep Divide Inside Fed Raises Questions About Timing of Further Rate Cuts”: <https://archive.is/7XdPo>

"Trump says he will 'probably' sue Fed's Powell”: <https://www.aa.com.tr/en/americas/trump-says-he-will-probabl...>

HTH

And of course equity futures immediately dropped on the news

Yep, we’ll see how the free market responds. Wonder if it will be a TACO Tuesday (or even Monday)

Guarantee there are dozens if not more in the admin insider trading like they have on so many announcements. Market manipulation right out in the open.

The slimiest swampiest criminals, they need to be put on trial.

Unprecedented times call for unlikely youtube heroes.

The titanic amount of generational neglect that has allowed even a fraction of voters to look at Trump for more than a second and find him qualified for any public office is truly fantastic.

This is one of the clear examples that Trump is seeing Putin's Russia as a model for his vision for the USA.

The entire reason the markets give the response wanted after a rate cut is because of the decision being made independently of politics. A politically enforced rate cut may still boost the economy in the short term, over the longer term the interest rate mechanism will not be trusted. This will defeat the entire purpose for very limited gain.

Behind all of this is another fact that the conditions around the U.S. reserve currency are changing quickly. This is happening with just interest payments on existing debt being the largest cost every year.

No matter who controls the Government, soon they will all be forced to cut spending in a large way and be forced to try to inflate themselves out of this coming debt crisis.

Venezuela, Greenland, and this. Anyone notice how these extreme events all happened around the same time of the Epstein files getting released with highly publicized questions about all the redactions? It certainly seems like a distraction game.

Not to mention what's happening in Minnesota

The difference is that the actions and rhetoric around Venezuela and Greenland and the Fed reserve are direct actions by Trump. The thing in Minnesota is a tragedy but I don’t think he told anyone to go out and kill somebody on the street.

Wow that's bold.

It is. It is also rare and late. Possibly too late. But let's hope it is not and that this will inspire some other people to draw lines in the sand.

Holy shit.

So our monetary policy will be just set at the arbitrary whims of the president if this new scheme works.

Why does all of this feel like it's just sliding completely out of hand? Am I just being a doomer?

I find myself seeking out non-doomer people to read, since the doom and gloom doesn't really help, it's just demotivating. "Look for the helpers" and all that.

This outlet has some good things from time to time, like https://www.liberalcurrents.com/we-are-going-to-win/

That said, yeah this is really bad.

Who are your favorite non-doomer folks to read?

I thought this post was a good one on why doomerism is just a waste of time - featuring Ken Jennings of Jeopardy fame:

https://bsky.app/profile/goldengateblond.bsky.social/post/3m...

Some accounts at random that tend towards "this all sucks really bad - however!"

https://bsky.app/profile/olufemiotaiwo.bsky.social

https://bsky.app/profile/golikehellmachine.com

It's a particular and kind of peculiar attitude, because objectively "things ain't great" and it's really easy to dwell on that. But we also need some hope.

Not sure about that article. In the short term maybe you might get through this round, but the long term really doesn’t look good. https://www.theatlantic.com/ideas/archive/2021/04/how-stop-m...

I’m applying to jobs in Europe.

Lots of respected limits and lines on government power are just being casually broken, so I don't think you're wrong. Whatever's going to happen next it probably won't have the stability of the past.

Because it is, you are not. Checks and balances are at their limits (judicial branch), or non existent (Congress).

https://rall.com/2026/01/08/checks-and-balances-are-dead

I hope I turn out to be wrong, but the most convincing explanation I've seen for the "why" is that the 1945-2000 period was an anomaly, and now we're reverting to the mean: despotic governments, frequent wars for territory, and massive wealth inequality leading to powerful oligarchies as the only other important political players aside from the despot. This was the norm for the overwhelming majority of human history and perhaps it was massively hubristic to think we had escaped it for good.

Probably it coincides with the fact that the last people who remember WW2 are now gone.

None of us understand the devastation that a WW incurs.

It's not the only anomaly. There was a previous period of long peace between 1815 and 1914, between the Napoleonic Wars and WW1.

This balance of power was carefully set up in the Congress of Vienna following the (first) defeat of Napoleon, and was ended by the ambitions of a Kaiser who desired the prestige of globe-spanning empire yet couldn't diplomacy his way out of a wet paper bag to realize that empire without bumbling into war.

With the added fun of nuclear weapons!

It’s been completely out of hand for some time now.

Well, you see... he is part of the "un-elected deep state."

Clearly, that is a problem that needs to be solved.

I know you’re being sarcastic, but Trump was the person who nominated Jerome Powell as chair.

This move is public punishment for not falling in line.

The only reasonable conclusion at this point is that the fascists in the white house see their deep unpopularity, obvious loss of power in the near future (they have lost nearly every election in the past year by a landslide), and the Epstein files closing in. The obvious outcome will be at minimum jail and ridicule due to their continuous and obvious corruption, high crimes and misdemeanors like invading Venezuela, trying to invade Greenland, and sexual crimes against children. So they have to accelerate chaos to try and destroy law and order before it catches up with them and destroys them.

Its time to put up or get put down by masked goons.

"Has been set," not "will be set". We've been operating under the new scheme for months. Despite Powell's protestations, there was no evidence for cutting rates, and lots of evidence for doing the opposite. Unfortunately he gave in to Trump... but that obviously wasn't enough.

No, you’re correct. It’s more or less what happened in Turkey.

It all started with all grants and department expenditures being tagged with the employee ID, of supervisory.

Latest 2024 budget expenses, a fairly good percentage were chocked with no ID, no supervisor or delgated authority.

Better now, no ID, no money from Treasury.

As a side note, is there a compelling reason why interest rates aren't set algorithmically? I assume human intuition isn't really a factor in setting them. This would eliminate concerns about political motivation.

Economic models are complex and far from perfect, and we're still waiting for Hari Seldon's psychohistory models to be created to tie together macroeconomics and macropsychology.

But who sets the algorithm? Whichever department of branch of govt was in charge of that would become have the enormous power, and political motivation would then fall to that.

Equally the same for data that goes into the algorithm - if you can control that you control interest rates.

There's some slippery feedback loops involved, even if the models were very good, the reflexive nature of doing something like this would be very hard to get around

The design of the algorithm, and the control over what data is fed into it, would be subject to political motivations.

> is there a compelling reason why interest rates aren't set algorithmically?

Can’t believe you are saying that!! Then anyone can manipulate it like they manipulate stocks by writing hit pieces one day and gushing articles a few days after,

Would that make it easier or more difficult to guide, I wonder?

One of the very few lonely voices.

It's quite impressive how scared everybody is of this administration. News outlets, international leaders even in face of threats, big tech, including the delusional Musk who thought he could've handled the president's rage.

Hell even his own party is scared of speaking up, you either fall in line or you risk falling victim of the most vicious direct attacks, even if you've been a huge and core voice for the president, see senator Marjorie Green.

From Russia, to Belarus, from the Philippines to Argentina, from Hungary to Poland it's crystal clear what a failure of democracy it is to have a presidential republic.

The turning point may have been when the Supreme Court decided a president couldn't be criminally liable for anything done in office. Having no fear of consequences is quite an enabler.

America needs more public administrators like Powell in POTUS, SCOTUS, and COTUS: seemingly boring, reasonable, decent, professional, and competent.

What about another nice dinner with all the Silicon Valley CEOs paying their respect to the orange dictator? I'm sure that will appease him. What a bunch of spineless puppets.

I’m aghast but numb to this now.

The biggest question for me now is how the usual defenders of this lawless administration will try to defend this or both sides it.

This will continue until people actually get hurt. Trump is exactly what decadence looks like: people willing to vote for "their team" against any better judgement because nothing really every happens to hurt them.

Easy, he committed fraud by blowing up the renovation budget.

Could you point me to the East Wing of the White House please?

The defense is that the status quo has become archaic and self-serving instead of serving the public so the current operations people doing some house cleaning and tossing a few rooms to see what’s going on in there is overdue, changes need to happen and power structures need to be shaken out a bit to make sure they are not getting in the way of the people they were created to act on behalf of, and scatter the ones who are “helping themselves” to the public coffers.

This just needs to happen every across all government, it’s like brushing your teeth to kick out the bacteria, but each individual institution needs a different kind of “floss” depending on the nature of the ways they have strayed from their original purposes.

It's a funny defense coming from the most corrupt administration since Nixon

That sounds nice, but I don't think there is much evidence that the above is actually what the current administration is doing, or even attempting to do.

Having blatantly political messages blasted across websites for national parks and on airport security video screens during the shutdown, for example, doesn't seem like a move towards "serving the public", but rather a move towards consolidation of direct control to the politicians at the top of the executive branch.

What's a pleb supposed to do now? Convert every paycheck to BTC, gold, or EUR?

Toilet paper and ammunition.

I assume there are some stocks that would benefit this? Maybe foreign stocks if the dollar declines?

The most-unamerican thing you can do right now is HOLD bitcoin/gold/silver.

If you still want fiat — and they're available — Swiss Francs are deflating least-quickly.

Otherwise, as a fellow pleb, my best advice is to get enough bullets for occassional hunting (and other tax-free methods of living) and protection.

If you're of a draftable age/gender, I'd either get extremely fit or extremely disabled. If you're a lard-ass, I'd get to a state where you can live without medicines.

—fellow blue collar american

You might as well for the next 3 years.

I wonder if the fed's lawyers advise him on this or if he has to use his own lawyers

Powell for president please

Nobody who takes money as seriously as either party to this case should be president. Leaders should be focused on outcomes not abstractions.

He printed way too hard when Trump asked him to in '20.

My understanding is the United States has one of the strongest post-pandemic recoveries, the printing was definitely a factor.

So this is the bar for the next country to surpass the US as the world's economic super-power, if this continues it's most likely going to be China to surpass the US.

An opportunity for the EU to stop its bureaucracy and cleanup its act. If it cannot convince anyone that they are next, then one can argue that democracy is completely finished.

If this nonsense continues it will be the UAE + Saudi Arabia + China, cutting off the west and that's that.

If that's the bar, well, China is not a sterling example of central bank independence and the rule of law either.

China hasn’t dropped bombs on foreign soil in 45 years. I think I’m ok with that situation.

> stop its bureaucracy and cleanup its act

What does that mean? Do you have any idea what the EU is?

The only adult left in the room :(

Economists: The interest rate on US Treasuries is often used as a benchmark for the “risk free rate”

Trump: Hold my beer.

Wild. Some kind of fucking banana republic.

Trump can’t tolerate anyone in government who isn’t a total Trump sycophant.

Terrible. Trump was even the person who nominated Powell in 2017, and now he’s being squeezed for doing the job of Federal Reserve Chair instead of bending to demands.

(Boring, important thing that holds civilization together.)

Dunning-Kruger effect billionaire: We don't need that. What's it even for anyhow? I'm not paying for it. All these naysaying wimps and freeloaders say we can't live without out. I will use my unelected government position and bling chainsaw to cut fraud, waste, and abuse to eliminate red tape and unnecessary big government regulation. And I demand a negative tax rate, subsidies, and lucrative government contracts! Rawr!

If Trump does try to politicize the fed he is going to do the one thing that the American political system will not tolerate - messing with the money of the most powerful capital class in the world. Normally, the incentives of this class are most aligned with grinding the rest of us into a fine powder suitable for lubrication of the engines of commerce, but hopefully just this once they'll come to the rescue. My only fear is that the short term quarterly obsessions that we've built might actually lead to some business supporting this decision out of a suicidal drive for short term gains.

If Trump does try to politicize the fed he is going to do the one thing that the American political system will not tolerate

I've lost track of the number of times I, and others, have said that.

Turns out there really are no brakes on the Trump Train. In the parlance of the metallic-headgear fans, any other POTUS would have been treated to a nice convertible ride through downtown Dallas by now.

Thank God there's one important institution that can not be forced or bullied into compliance. Powell will go down in history as hero.

They're already pursuing a case against another Fed board member, and now this? I have a feeling these two cases are going to suffer the same fate as the Letita James and James Comey cases: thrown out due to incompetence and/or malfeasance. It's a disgusting, clear weaponization of the DOJ.

MAGA, of course, tried to accuse Biden of weaponizing them during his term so that they could justify the Trump 2.0 revenge tour. Now we're here.

TLDR and context?

The US government entered a debt spiral a while ago (https://fred.stlouisfed.org/series/A091RC1Q027SBEA), and needs lower interest rates to service its tremendous debt while trying to inflate it away by printing money. That's all it comes down to. For decades fiscal conservatives were warning about it and were laughed at. Now that we're are the end game the inevitable shitshow will become apparent. You can hate Trump (rightly so), but as much as he did contribute to the problem directly, the problem is larger and systemic, and anyone else in office would have the exact same problem now.

Exactly, interest rates must come down due to the government debt burden. This debt burden creates a strong incentive to force rates to zero, but we have to pretend the Federal Reserve is independent.

Separately, I think Jerome Powell is one of the worst Fed chairs as he is most (but not exclusively) responsible for what happened to the housing market by creating a lock-in effect and focusing on their CPI basket.

Or you know we could like tax wealthy people and companies...

If you are a complete normie, turn back now, it's gonna get conspiratorial. Otherwise, read on for some insights.

First, one must understand that the Federal Reserve was the main trojan horse vehicle for the European banking families into America. Read any number of good books, starting with the latest edition of G. Edward Griffins "The Creature from Jekyll Island".

But all that is mostly known already to those who have payed attention and done the reading... so whats next?

My conclusion is that America is being setup, in multiple ways (fall guy for global empire, etc), but one major setup that is going on right now is a twofer: 1) Jack up the US economy at any time by raising rates and unraveling the ponzi scheme and 2) If you do 1), you have the perfect excuse to try to implement some CBDC-esque new system, but this time with much more surveillance tech, for example unified ledgers that merge digital identity with financial identity, with ESG and social credit style added on. Read Whitney Webb for more on the structures being put in place for this.

So what is happening is that Trump knows the people that control the Fed, for whom the Fed chair is a mere mouthpiece, really want to suddenly and unexpectedly hike rates and soon, but Trump doesn't want it to happen under his last term, so he has been doing major backroom maneuvering to influence the Fed every time a rate-change date is coming up. Essentially he wants to kick the can to the next POTUS, but since the Fed is technically independent, it really can do whatever it wants, all he can do is fire after the fact. My guess is they will drop it on him late term, a perfect excuse to usher in the political pendulum swing of the hegelian game they play with us.

To me, that this backroom maneuvering is becoming more public tells me they really want to do the sudden rate hike.

Want a decent intro to the real fed? Try this video from the great James Corbett: https://www.youtube.com/watch?v=5IJeemTQ7Vk

Monero up around 20% today.

I’m a little shocked to see the quality of some comments here - I would expect a more grounded discussion. This is like Reddit / YouTube comment history. Someone please tell me this is a Wendy’s.

Sure the Fed isn’t perfect. But we don’t really have a better solution as of now because our financial systems are extremely powerful and anyone in office would love to abuse it if they can.

Sure, the renovations are ridiculous. But it’s not like this administration is austere in the slightest, so that’s a bit rich. Not to mention the cronyism prevalent across the cabinet.

HN has better baseline conversation, but Social Media is inane by its very nature.

There's also little genuine conversation to be had. The situation is bad, has been bad, and seems to only be getting worse. That's the only interpretation any rational person can hold. And, when everyone has the same opinion and that opinion is drastic, that creates a circle jerk.

Why are the renovations ridiculous?

Not the renovations themselves but the cost is supposedly at 2.5B. Personally I don’t really mind but I also don’t think government buildings need to be all that fancy with marble flooring.

Exciting two weeks to start the year!

I don’t think “exciting” is the right word.

Where's your sense of adventure?

You know this part of the problem!

Politics is now consumed as entertainment, and ask any writer of books or screenplays and they will tell you _conflict_ makes for good entertainment.

Politics should be _boring_. The fact that we demand to be entertained by our political system is a big part of the problem.

Far too many people decide to occupy the us vs. them part of their brain with National politics as opposed to sports.

Both are basically useless as it relates to your personal quality of life but at least with the latter you can see nice geometric combinations between players on a pitch and some incredible athleticism in between

Does anyone have a steelman argument for this?

Do you think that criminal prosecution for Jerome Powell for maybe doing something wrong with some building renovations under timing that just happens to coincide with the President’s personal and public vendetta against this person is worth steelmanning?

At some point it stops being steelmanning and starts becoming an invitation for some propaganda to distract from the obvious.

As a casual follower of economic news and completely ignorant of politics, my guess is that the administration believes the fed isn't acting according to mandate of stability and jobs. I have no clue how valid that is

The interest rates? If you wanted to crash demand for dollar various things makes a bit more sense. Venezuela might be more about threatening BRICS if you squint at it. The EU–Mercosur agreement looks like it might pass - timing is kind of weird. There is maybe a kind of logic to it for exports but I think it lowers the standard of living for us plebs.

I hate Trump but Treasury control over central banks and interest rates is not a particularly revolutionary thing. Independent central bank is a relatively new invention and a non-independently controlled central reserve bank did not always lead to immediate implosion in all cases. The concept of independent central bank only became popularized in the 1920s. The world existed before that.

The dire thing here is that Trump himself is a maniac, so him taking control is very scary, but a non-independent central bank itself is not as big a calamity as 1000 other problems we're facing in society.

History: https://en.wikipedia.org/wiki/Central_bank_independence

You can find many criticisms of the job performance of many of the past chairs of the US fed, the Fed is not infallible. The current Everything Bubble / Too Big to Fail situation we are in is largely of their creation.

Trump is, of course, wrong. But the independence of the Fed being at stake is a myth. Since the bursting of the dot com bubble, the Fed has operated as if the well being of the investor class is their number one priority.

As they say in Starship Troopers: "It's afraid." Good.

This is logical end game of having these economic controls at all. Put a steering wheel on it someone will drive it.

A true free market isn’t at whims of any one person.

I like jpow so I’m biased for sure. But when I zoom out, I think the thing some people are missing is the arbitrage aspect. With US politics, we typically get a choice between two people. Often it’s a choice between the lesser evil. Many of Trumps voters were not people who liked Trump, but people who were horrified by Kamala. This means Trump can arbitrage that gap, and do all sorts of disagreeable things as long as he remains the lesser evil to his voters, those disagreeable acts will be ignored come election time. Many Trump voters will be aghast at him weaponizing the courts to chip away at the independence of the fed, but they’ll vote for him and his preferred candidates because they feel the alternative is even worse.

The important implication is that resistance or countering with extremism in the other direction only makes him stronger. To defeat Trump the left will need to move closer to the middle so he has less room for that kind of political arbitrage. Alas emotion seems to be in greater supply than strategic thinking so probably things will get worse before they get better.

"In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment."

I take any claims of absolute neutrality with a huge grain of salt. Besides, he's an unelected bureaucrat. He can only pretend to represent the interests of the people.

Bureaucrats can do more than pretend: they can have a history of actions which reflect their representation of the interests of the people.

I am surprised by the negative comments, the low interest rates = better thesis has always been somewhat popular on HN , now just because Trump is saying it (and operating to get there) it becomes an issue or something not to be aligned with.

There are countless comments and discussions on this board about how:

1) interest rates should be zero,

2) interest rates being non-zero create a misallocation of capital where there is a return on an investment without any ingenuity or creation behind

3) Banks are too risk averse to lending and their risk averse behavior is due to the risk free rate they enjoy when they park money at the Fed and when they buy T-bills

No matter how little ingenuity or creation is required to keep afloat a zombie company or a dubious startup, for sure it's a notch higher than what happens when that money is parked at the Fed or invested in t-bills...

the fed's goal is zero interest rate, it's not that people are negative because "tRuMp SaId So" it's because he's trying to influence the fed's decision with criminal prosecution of the chair and not through his economic policy. His policy is ass and that's why the fed can't get back to their ZIRP goal

Even if one disagrees with Fed policy, the way Trump is having the DoJ criminally prosecute Powell under unrelated pretexts is disgraceful and undermines the Fed’s independence.

I’m of the opinion from the old Yiddish proverb: “when the cat and dog are fighting, the mouse is safe”.

If the admin is fighting with the Federal Reserve, it means they are not focused on figuring out how to further screw us over…

They have had no problem screwing people over on multiple fronts at the same time. This is wishful thinking.

> If the admin is fighting with the Federal Reserve, it means they are not focused on figuring out how to further screw us over…

Messing with interest rates for short term political gain would screw us over.

I don't think a fight with the Federal Reserve will stop ICE from murdering civilians.

Puerile and uninformative, unfortunately. I respect that each of us has their world view, but if the last decade has shown anything at all, it is that when you are in the public square, you are asking for interlocution, not for escapism to be indulged. And the best thing is to do as you implicitly ask, and interlocute.

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