00:00Why does it seem like the president is feuding with the Fed chair?
00:03Jerome Powell has done a terrible job.
00:05We have a stupid person, frankly, at the Fed.
00:08The heart of the conflict is interest rates.
00:11Trump wants them lowered immediately.
00:13But as the chairman of the Federal Reserve,
00:16Jerome Powell is in charge of that decision,
00:18and apparently he thinks it's still too early.
00:21Though the intensity of the disagreement is unusual,
00:24the dynamic is actually as old as the Fed itself.
00:27In fact, the whole reason the Fed was designed to be independent
00:31is because Congress knew that elected officials would always want interest rates lower
00:36because it deuces the economy, thereby helping them get re-elected.
00:40However, it can also lay the foundation for high inflation,
00:43which the Fed is tasked with avoiding.
00:46While most presidents have begrudgingly accepted this arrangement,
00:49Trump has mused openly about firing Powell if the Fed chair doesn't do what he wants.
00:54Economists warn that not only could this reignite inflation,
00:57which is already creeping up again,
00:59it would be a major blow to America's reputation as a safe, stable economy,
01:04where monetary policy is driven by data and not politics.
01:08If Trump gets his way, we may see a temporary surge in economic growth,
01:13but the long-term future of the world economy would suddenly be a lot less predictable.
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