JEFF CHILDERS HAS A TAKE ON THE POWELL REFUSAL TO LOWER RATES ISSUE…IT’S SO SIMPLE …I THINK HE’S RIGHT

I AM READY TO DISCOUNT THE COMPLEX CONVOLUTED LUONGO THEORY…FOR THIS SIMPLE ONE

OCCAM’S RAZOR SAYS THE MOST SIMPLE EXPLANATION IS USUALLY THE RIGHT ONE

……………….

The Times, on some kind of a roll, continued yesterday’s news feast with an article headlined, “Trump Steps Up Pressure Campaign on Powell With Handwritten Note.” That’s one way to put it. It was classic Trump. He’s getting ready to do something.

CLIP: Press Sec Leavitt shows reporters Trump’s ‘handwritten note’ to Fed Chair Jerome Powell (0:58).

https://x.com/KarluskaP/status/1939737719673889107?

If ever there were a subject that blog authors avoid like the plague, a subject so mind-numbingly horrifying it sends readers fleeing for the cognitive safety of Dilbert cartoons and TikTok cat videos, that subject is interest rates on bonds. My fingers twitched nervelessly even as I typed those words in sheer authorial terror.

Here, with an uncontrollable shudder, are the basics. We, meaning Uncle Sam (with only our very best interests at heart), borrow money from foreigners by selling them “bonds,” which are like carnival coupons for future Florida Everglades oil revenues. There are all types of bonds, limited only by the demented imaginations of bankers and financial experts, the same ones who dreamed up the no-job-needed mortgage crisis of the aughts. But I digress.

We sell a lot of bonds, by paying investors interest. A lot of interest. The higher the interest rate, the more we pay. Billions. Trillions. The sky is the limit.

Now that President Trump has heroically wrestled the Biden recession under control, he wants the Federal Reserve to lower the price —the interest rate— that the country pays investors who buy our bonds. But Fed Chair Jerome “Snidely Whiplash” Powell says nyet.

Powell claims we aren’t yet out of the financial woods, so he’s just playing it safe.

Delving into the details requires entering a Lovecraftian world of ten-syllable financial buzzwords and word salad so deliberately obscure that even international chessmasters quake when they see the vocabulary list. Every commonsense objection to lowering or raising rates is met by an equal and opposite response of incomprehensible gobbledegook, meant to make us feel like morons and simply sit down and let the experts do their work.

They can’t just say, “we’re keeping rates high.” No, no. Instead, they: “maintain a restrictive policy stance to ensure inflation expectations remain well-anchored relative to the dual mandate under conditions of asymmetric labor market slack.” They don’t just talk about borrowing costs— it’s “term premiums,” “yield curve inversions,” and “nonlinear transmission effects in the neutral rate regime.” Powell whispers arcane incantations like “real rates adjusted for forward guidance uncertainty within a confidence-weighted Taylor Rule” that magically summon a dozen economists and two minor demons from the CBO.

These people never explain anything. They just obfuscate until the Blackhawks come home, piling on more and more incomprehensible gibberish until stroke-like symptoms appear in their victims, when they finally move on.

? But there is a much simpler lens that lasers right through all the sulphuric smoke.

During Biden’s entire term, Powell kept rates pinned to near zero, through record inflation, multi-trillion-dollar Biden spending sprees, and a labor market tighter than a native drum because, we were told, “inflation expectations remained well anchored.” They literally denied inflation was even happening.

But then —poof!— with a new incantation, right after voters handed Trump a historic win in November 2024, the Fed suddenly rediscovered the lost country of inflation, and suddenly became a prudish paragon of restraint. All the high interest rates the Fed has so carefully and primly calculated as absolutely necessary came after the November 7th election.

It’s almost like Powell kept a framed photo of Biden on his desk labeled “In Case of Progressive Agenda Threat, Break Glass Ceiling.” Rates stayed flatter than NPR’s ratings curve until the very moment Trump clawed his way back into the Oval Office. Suddenly, the Fed “remembered its mandate,” strapped on its fiscal chastity belt, and began fanning itself about financial overheating. Weird!

While serving Biden, it was spend, print, repeat. Powell played along like a cocktail pianist on the deck of the Titanic. But under Trump’s deregulation, growth, and tax reform, suddenly the Fed transformed into the ghost of Andrew Mellon, sternly warning that the economy must be disciplined, lest it enjoy itself too much.

Jerome, nobody is buying it.

The pièce de résistance of this monetary opera was unveiled yesterday when Press Secretary Karoline Leavitt, barely suppressing a smirk, held up a piece of paper like it was the Zapruder film. On it appeared a printed list of global bond rates, ranked from lowest to highest —Switzerland, Japan, China, even Russia— which are all paying less on their national debt than the United States.

And in the corner, like a note passed in study hall, Trump’s unmistakable handwriting: “Jerome — you are, as usual, too late. You have cost the USA a fortune. You should lower the rate — by a lot.” The underlying point was brutally effective: Why is the strongest economy in the world paying more to borrow than countries with capital controls, censorship, and exchange rates backed by slave labor and violence?

Of course, it wasn’t intended to be a message to Chairman Powell. I read Trump’s note as a classic Trumpian chess move, to pave the way for political possibility: removing the Fed Chair, something no president has ever tried, though many have pined for the opportunity.

? Powell is standing on thin political ice. An appeals court recently upheld (for now) Trump’s removal of the Director of the inaptly named Institute for Peace, another supposedly “independent” agency created by Congress.

The legal logic is the same: if agencies exercising executive power answer to no one, who’s really running the country? The courts, now stocked with Trump-era judges who understand the assignment, have started to shift away from the old gospel of sacred institutional independence toward something more grounded— like democratic accountability.

If the President must answer to voters for the economy, why should a Fed Chair get to derail the whole train while citing “market expectations” in a dialect even judges can’t understand? The era of unabashed deferral to unelected experts is over.

The Fed doesn’t get to play shadow government anymore— insulated from consequence, immune from accountability, and cloaked in a fog of jargon so thick you’d need a hedge fund intern and an exorcist to translate. The days when “because markets” was a complete sentence are gone. Trump’s handwritten note wasn’t just a jab at Powell— it was a shot across the bow of the entire technocratic class that has run U.S. fiscal policy like an invitation-only country club for the last thirty years.

When the people elect a president who wants to cut rates, create growth, and unshackle the economy, the Fed doesn’t get to veto that from behind frosted glass. Not anymore. Not after covid. Not after inflation. Not after the American public watched in real time as expert after expert confidently delivered disaster.

“Independence” is not a blank check. Not anymore.

And if Powell thinks he can hike his way into historical sainthood while the rest of the world is trying to breathe again, he shall soon find out what real accountability looks like. Stay tuned.

…………..

I am convinced Jeff Childers has a conduit to the White House .

He is Brilliant but he cannot keep Breaking these kinds of theories without some “Intel” IMHO