The REAL Reason Trump Went After Jerome Powell

This week, the U.S. justice Department opened a criminal investigation into Jerome Powell. And they actually threatened indictment over some testimony that he gave over the budget of some renovations to the Federal Reserve building. And the reason why you should care about this is because as capitalists who take ownership over the results that we create in our lives, we should be concerned about the government meddling with markets. I don't mean to get all political on you, but let's talk politics for a second. I happen to be one of those who voted for Donald Trump. I voted for him twice, actually. And Jerome Powell was Donald Trump's nominee. And Jerome Powell, say whatever you want about him, oversaw a lot of chaos, and in my opinion, has done a fairly good job at getting inflation under control. Now, I happen to be a crazy libertarian who remembers getting chills on my arms at Ron Paul rallies when people would chant, end the Fed. I am not a fan of the Federal Reserve. But the reason why this matters is because if you stand for limited government, if you are a pro capitalist thinker, then there should be some concern over the executive branch seizing control of of financial markets. Overall, you and I believe that we are in control of our financial futures. What we do with our money, what we do with our businesses says way more about how successful we will be than what any government does. And so this is why we should be concerned when there is an increase in government control, whether that is coming from the Federal Reserve or that is coming from the President. But when the executive branch starts to meddle with, with other branches of government, and I would consider the Federal Reserve, the fourth branch of the United States government, when we see one branch trying to seize power from another branch of government, I would say, this is not what I voted for. This is something that should cause alarm. Now, there's something going on behind the scenes that I think is worth talking about, and that is that we did not hear about this pressure on Jerome Powell from the White House. We heard it from Jerome Powell on Friday. The Department of Justice served the Federal Reserve with grand jury subpoenas threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. What this means is that there was not a big announcement coming from the White House that there were federal charges being put on Jerome Powell. This was done in secret. Instead, the way that the public found out about this was Jerome Powell releasing a statement on video that got seen on x by over 70 million people. So Jerome Powell actually stood up and said, this is what is happening. I'm being pressured with federal charges, and here's why? The way that I interpret this is that this was supposed to be private pressure towards Jerome Powell. And why would that be the case? Because every president wants there to be lower interest rates.

I want somebody that when the market is doing great, interest rates can go down because our country becomes stronger. So you view it differently. Our country becomes stronger, and therefore interest rates should go down, not up. They kill every rally. If it's no matter who, it's beyond me as president. No matter who's president, you have a good quarter and they want to kill it because they're so petrified of inflation.

Every president wants there to be as close to zero percent interest rates as possible because it allows them to justify more spending, it allows them to increase government spending without it driving up deficits. That's why presidents like low interest rates. Now, President Trump came into office promising a more balanced budget, promising less deficit spending. And unfortunately, the initiative that was known as DOGE looks like it was a colossal failure. The trillion dollars in cuts that we were promised have not come to pass, and instead we're facing still a monstrous federal deficit. That's why I think there's more going on behind the scenes that we are seeing right now. In fact, I don't mean to get all crazy on you, but I think that this may also be related to the capturing of Venezuelan President Maduro. It may seem like a stretch to try to relate the pressuring of the Federal Reserve chair to capturing the President of Venezuela, but I think both of these are attempts to drive down prices and drive down the federal deficit. Here's why. When inflation reports come out, they are heavily influenced by two factors, food and energy prices. Those are the most volatile things in an inflation report. So if you have oil or gas prices coming down, that will show up as lower inflation in the short term. That's the data that the Federal Reserve uses in order to justify higher or lower interest rates. So if you capture the president of a country that controls millions of barrels of oil and now you are flush with the oil supply, it would make sense that oil prices would come down, which is exactly what we see happening in the data. We see gas prices coming down by 25 to 50 cents a gallon in some parts of the country. Look for that to show up in the next inflation report. We'll see a temporary dip in the cost of gas prices and oil prices, which also drives down other energy prices and some consumer prices, because oil is used in everything. So that will create a temporary drop in consumer prices that would justify a lower interest rate. What does that do? Well, one, it gives Donald Trump and his administration a victory lap. He can say, I promise to bring down prices. And look at the recent inflation report. Prices are coming down. But second, if that means that there are lower interest rates, it means that the government can save hundreds of billions of dollars in interest on the federal debt. One point of interest will result in over $100 billion in savings to the federal deficit. And so Donald Trump can say, I brought down the federal deficit by over $100 billion. And we might interpret that as he cut programs or he cut bureaucracy, but the reality is interest rates just came down, so we're not paying as much interest. Now, he can justify his stimulus checks, which are branded as tariff dividends, or he can justify increasing the budget of the Department of Defense or Department of War or whatever the heck it's called today. So in a way, I view this as marketing. These are ways around the system so that politicians can stand up and say, look what I have done for you, but it's actually just done from a bully pulpit. I think this sets a very dangerous precedent, and those of us who believe in limited government and free markets should hold those in power accountable. Now, on a personal note, it is very popular to back a person and back a side. There's a few of us still left in the world who back ideas and back principles, and principles stand regardless of who is in power. So this is one of those cases where even though the guy I voted for is in charge and he's winning from a principal standpoint, I have to hold those in power to a different standard. And I think pressuring a different branch of government and consolidating power into the executive branch is a dangerous precedent because it just takes one more cycle, one more election year for somebody that you don't like to be in charge of that executive branch. And then they have that power that was set in motion by the previous administration. What does this mean for you and your money and your business? Well, markets like certainty markets also like lower interest rates. And the interesting thing about this situation is this definitely creates more uncertainty, but it also may also result in lower interest rates. When Trump gets his way and we have a new Federal Reserve chair come this May, he will probably install someone that will do his bidding that will look really good for short term markets. But overall, from a principal standpoint, I think this sets a very dangerous precedent. Here are my predictions for how this will shake out. I don't think that Jerome Powell is going to face any actual federal charges. There's already been pushback by Republican senators saying this is kind of bad. And I think that this is going to backfire on Donald Trump. I think that Republicans and Democrats will agree that this is a dangerous precedent. And as a result, I don't know that Trump is going to get his way when he starts nominating a new federal chair come this may instead, there may even be a case for Jerome Powell staying on the board if not staying as the Fed chair. Because I think that the pushback against this move is going to be very strong. I see a trend happening in government where people are kind of tired of the us versus them mentality. There is more of a push for centrism. There is, there is more of a push for, dare I say, unity. People are tired of hating one another. And I think Republicans and Democrats now have a large enough coalition together meeting in the middle instead of hating each side. So I think this is going to backfire on Donald Trump and I don't think it's going to end up with the result that the Trump administration wanted in the first place. What do you think? What do you think is the reason behind this move? Drop it in the comments and let me know.