Can Trump Push Jerome Powell Out of the Fed? w/WSJ's Nick Timiraos

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 21 November 2024

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

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Summary

Has the Federal Reserve gone too far? Many Americans are critical of the Fed’s move to raise interest rates sharply, pause for years, and then slowly start implementing rate cuts. The arguably most prominent critic of the Fed? President-Elect Donald Trump, who, shortly after nominating the current Fed chair, Jerome Powell, reversed his opinion on whether Powell was the right person for the job. Now, with Trump coming back to the White House, Powell’s job hangs in jeopardy—or does it? Can a President fire the Fed chair? Does the President have the authority to influence how the Fed operates? What would happen if Trump decided to go after Powell and request his resignation? Nick Timiraos, reporter at The Wall Street Journal and Federal Reserve expert, is on to answer these questions. Nick gives us the latest update on rate cuts, where the Fed is headed, how the future of the Fed looks with Trump back in office, and why some politicians champion “Fed Independence,” while others argue that Fed power has overstepped its bounds. Are Trump and Powell more aligned than they think, and is this government drama all talk? We’re getting Nick’s expert viewpoint on it all. In This Episode We Cover Why “Fed Independence” could actually be a crucial piece to keeping the economy stable Whether or not Trump has the authority to fire and replace a Fed chair Future rate cuts, inflation concerns, and the Fed’s latest “signal” on rates Powell’s simple response when asked if he would resign because of Trump’s request Why the Fed does NOT have to answer to the President (and is this a good thing?) Trump’s proposed tax and tariff policies and why they could challenge the Fed And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders Dave's BiggerPockets Profile Trump May Consider Shaking Up the Federal Reserve If Elected—Here’s What That Could Look Like Nick’s WSJ Articles Grab Dave’s New Book, “Start with Strategy” Jump to topic: (00:00) Intro (00:32) Latest Fed Meeting Update (02:21) More Rate Cuts Coming? (04:23) Can Trump Change the Fed? (08:02) Is the Fed Above the Law? (15:59) Can Trump Fire Powell? (18:09) What Happens Next? (24:02) Trump's Tricky Policies Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-271 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Last week, headlines swirled about whether Donald Trump would try to fire Fed Chair Jerome Powell.
0:06.8	Today, to answer this question, I'm here with Nick Timmerhouse of the Wall Street Journal
0:11.2	to talk about whether that's possible, how this might play out, and the future of the Federal Reserve.
0:22.0	Hey, friends, it's Dave.
0:23.5	You're listening to On the Market, the real estate news and economic shows for informed
0:28.0	real estate investors.
0:29.5	Let's get into my conversation with Nick.
0:36.9	Nick, welcome back to the show. Thanks for joining us. Thanks for having me.
0:40.8	So you're here and I'm going to ask many questions about the future of the Fed, but maybe you can help bring us up to speed.
0:47.6	We all know that there was a Fed meeting right after the presidential election. They cut the federal
0:53.6	funds rate by 25 basis points. But
0:55.8	what else happened in the last meeting that I and our audience should know about?
1:00.5	Well, I think the big question right now is, you know, is the economy going to avoid a recession?
1:06.0	And if so, you know, the bond market certainly thinks so. And so you've seen yields rise. I mean, it's unusual,
1:11.9	right? The Fed has cut now 75 basis points this year. And you've seen the 10-year treasury yield go
1:18.6	up, I don't know, a half point, probably not what a lot of people expected. And so I think
1:24.0	the big question now is, you know, what happens from here both on the policy side?
1:29.4	Donald Trump's policies are a little bit unclear exactly how far he's going to go on tariffs, tax cuts, spending cuts, regulatory rollback.
1:39.2	What does that mean for growth?
1:40.7	What does that mean for inflation?
1:42.5	There's going to be a lot to digest.
1:44.6	Got it. Yeah. And just to make clear what Nick's talking about here, we've seen that the Fed
	...

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