“Welcome, dear readers, and welcome, Mr. Powell. How goes things with you?” asks I.
“Hey, I’m a serious guy. WTF am I doing talking to a damn convertible?”
“You’re a bloody car? I thought this was a serious interview?” says him.
“It is, Mr. Chairman. Let’s get into the main subject today — the tiff between you and President Trump 2.0 over interest rates. You do recognize President Trump 2.0 desires lower interests, right?”
“WTF do you think? He goes on and on about the bloody interest rates. I can’t wait for my term to expire,” says Mr. Powell.
“When does it expire, Mr. Chairman?”
“My term as Chairman of the Federal Reserve expires on 26 May of 2026, but I remain a member of the Board of Governors of the Fed until 31 January 2028.”
“Do you think President Trump 2.0 wants to fire you?”
He laughed for a long time.
“Yes. He’d like nothing more than my bloody scalp on his wall, but he’s not going to get it.”
“So, you have 10 more months of dealing with the Trump 2.0 administration?”
“Did you use your fingers and toes to count it out, moron?”
We both laughed.
“Yes, sir, I did. So, back to the question — are American interest rates too high?”
“I don’t think so, obviously. There are other voices on the Board of Governors who think they are. Today, it is a very close vote. Differences of opinions in economic matters, particularly in monetary policy — which is the Fed’s exclusive venue — are healthy. A debate is always healthy and helpful, but name calling is not.”
“Understood. What do you say about this chart of comparative interest rates for 10-year bonds?”
“Do you think you are the first person to show me this chart, you bucket of rusty bolts?” he asked with what passed as a charming smile. “Of course I know what the other important economies are charging for ten year money. So, what I say is this — the US has a different economy than any other country in the world. I discount completely what is going on in China and Russia. So, our decisions were made knowing this information.”
“Should interest rates fall in the near term?”
There was a long, pregnant pause during which Chairman Powell looked out the window as if on the bridge of a large naval ship studying a barren horizon looking for sails, smoke, or enemy warships.
“Yes,” he said slowly like a man admitting to a high crime. “I dislike Trump, but he’s right. If he hadn’t enacted all those tariffs, we would have lowered interest rates by at least 200 basis points by now. But, he enacted all those tariffs and we expected them to spike inflation.”
“They did not really, did they?” I asked.
“Not that we can measure or locate. I must admit that Trump is a master at the whole tariff game. Best ever in my lifetime and I’m old. We expected inflation to be near 5% with all the new tariffs.”
“You did?”
“Yes. We were wrong.”
“Really?”
“Yes. Interest rates should be 200 basis points lower.”
“Trump, he’s good on the economy, isn’t he?”
“Go away, Big Red Car. Just go away.”
We ended on that note, but Chairman Powell admitted he’d screwed the pooch on his tying tariffs to inflation and thereby impacting interest rates.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car.
