Sorry, but the US economy is much safer with Jerome Powell than it is with President Trump

The author of this article finds herself in not-so-quite the dilemma. I have the utmost respect and a very soft spot for ‘crypto president’ Donald Trump. But as an aspiring economist, I also find Federal Reserve Chairman Jerome Powell quite admirable.

These guys each believe they know economics better than the other. But if you ask me, by all metrics, Powell is far better for the economy than the president. He’s just more intelligent on the matter and has proven time and time again that he knows his stuff.

You wanna know who really has what it takes to handle a $26 trillion economy? Simple: It’s Powell.

Powell raised rates, Trump just raised tempers

Throughout 2022 and 2023, Powell raised interest rates despite the blowback from Wall Street, Congress, and the Oval. But in late 2023, the Fed cut rates to near-zero, launched emergency lending programs, and pumped liquidity into frozen markets.

Trump has been criticizing Powell and the Fed for high interest rates, accusing them of “mishandling” inflation, as recent as Jan. 29. But here’s the thing—Powell’s rate hikes are why inflation has dropped from a dangerous 9% in 2022 to a manageable 2.9% by January 2025.

The irony here is that Trump’s own economic policies, like the 2017 Tax Cuts and Jobs Act and so many tariffs, actually singlehandedly caused the inflation crisis Powell had to clean up in 2018. But hey, guess when you’re always shouting, people tend to believe in you more.

Anyway, Trump’s tax cuts lowered corporate rates from 35% to 21%, which gave businesses more cash to expand. But it also increased the deficit and triggered inflationary pressures. Most of those cuts are set to expire this year, and Trump wants to extend them.

Trump’s tariffs made noise, Powell’s policies made progress

Let’s talk trade wars. Trump launched them in 2018 with tariffs on billions of dollars worth of Chinese goods.

His argument? Protect American manufacturing and reduce the trade deficit, of course. But instead of protecting anything, Trump’s tariffs triggered retaliation.

And Mr. Powell had no role in the trade disputes, but he had to deal with the fallout, as per usual. The tariffs contributed to supply chain disruptions, raising prices and worsening inflation. Powell kept his head down and did what he does best—stabilize.

He raised rates to control the inflationary effects of rising import costs, even as Trump publicly blamed him over and over for slowing growth. He even went as far as calling him names and mocking his intelligence at press conferences.

To date, Powell has never taken the bait. As I reported just yesterday, he repeated again that he would never engage in a public dispute with the president and actually looks forward to working together to make sure their decisions align with his many, many new policies, including the crypto-related ones. How cool is that?

Powell is the man, even if it kills you to know

Powell earned his stripes in the trenches of economic policy. He graduated from Princeton in 1975 with a degree in politics, then he got a law degree from Georgetown in 1979. He joined the Treasury Department under George H.W. Bush in 1990.

In 2012, President Obama appointed him to the Fed’s Board of Governors, and Trump elevated him to Fed Chair in 2018. Meanwhile, Trump studied economics at the Wharton School of the University of Pennsylvania and proceeded to build a real estate empire, largely thanks to nepotism.

But running hotels and casinos isn’t the same as managing an entire national economy, especially one as powerful as this one.

The difference between these two guys is so painfully clear. Powell collaborates with economists, analyzes reports, and adjusts policies based on facts. Trump acts on instinct. His decisions almost always come without long-term planning.

Since the world is quite literally at the mercy of America’s economy, we need Powell’s stability, not Trump’s immaturity and aggression. He is a great businessman and a great leader but a terrible economist. Half of the things he says about the economy make very little sense if you really know economics.

He’s good for crypto, sometimes. But there should be a line. He has way too much on his plate, he simply canNOT be in charge of the world’s most important central bank. There is a reason the US Constitution itself banned him from interfering and gives Powell enough ammunition to win him in a legal fight.

Even within Trump’s own Congress, many seem to believe Powell should be left alone to do his thing. He has said before that he is apolitical, and has a lot of supporters, who are both Democrats and Republicans. It doesn’t matter who you like better, there is too much at risk for “likability.” The president and his people need to back off Powell, otherwise, our markets and economies are, as the kids put it, “cooked.”