It appears that the most soap-operatic relationship between US President and head central banker since 1833 has taken yet another turn.
After spending more than a year on the receiving end of threats and posturing from the White House, Federal Reserve Chairman Jay Powell has finally decided to turn the other other cheek and respond to Donald Trump's incessant whining about interest rates. In a departure from Powell's tortuous attempt at his own version of inscrutable Fedspeak, Powell used his economic outlook remarks to the Council on Foreign Relations today to take a very unsubtle shot at the commander-in-chief:
The Fed is insulated from short-term political pressures—what is often referred to as our "independence." Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests. Central banks in major democracies around the world have similar independence.
Allow us to translate into a non-Powellian Fedspeak vernacular:
"I am the literal Fed chair and you can't fire me, you moronic adolescent. I don't work for you and I'm not interested in fluffing your tax cut into late 2020 so that you can wage 15 trade wars simultaneously and still have a snowball's chance in Hell of winning a second term. Stop bragging about your economic genius, your dope-ass economy and then calling me names because I won't cut rates. That's not how this works! THAT'S NOT HOW ANY OF THIS WORKS!!! You want to replace me with Cramer or Dobbs or whichever Najarian won't get caught in a simple Senate committee background check? Go for it, Dipshit, let's see how that works out. Now please, I'm busy here, Mr. President. So kindly get off my fucking lawn."
Get the popcorn, cuz this is just getting good.
And it's all going to look so dumb when Powell caves and cut by 25bps just to appease the masses.