The real reason why Trump wants to imprison Powell

Bye bye monetary policy, hello complete shitshow!

Many of you have asked that I stop placing analysis in Substack notes and instead make them posts.

This is the first of that endeavor.

I cannot recall a moment in modern American history when a Federal Reserve Chair felt compelled to issue a statement like this one.

That alone should tell you something has gone badly wrong.

Let’s begin with the part everyone seems determined to skip:

Even assuming arguendo that there were accounting irregularities or bureaucratic screw-ups related to renovations or financing at the Federal Reserve, that does not remotely imply criminal misconduct by the Chair himself—or, frankly, by anyone else. Errors are not crimes. Mismanagement is not felony behavior. Bureaucracies make mistakes the way dogs shed: constantly and without malice.

And if acting without foresight or screwing things up were criminal offenses, Trump would have been executed years ago for the accumulated wreckage of his business career alone. By that standard, half of American corporate management would be on death row, and the other half would be awaiting sentencing. No one—literally no one—has alleged that Jerome Powell personally committed a crime. Not inspectors. Not prosecutors. Not even the loudest clowns on cable news.

And yet here we are, openly floating the idea that the Fed Chair might belong in prison.

Curious standard.

The same President now flirting with the criminalization of monetary policy quite famously ordered the demolition of the White House East Wing and then proceeded to solicit something on the order of half a billion dollars in “donations” to rebuild it—conduct that would make a moderately honest U.S. Attorney salivate under normal circumstances.

On that? Silence.

No indictments. No sermons. Not even a sternly worded press release.

Which brings us to the obvious truth everyone is dancing around.

Donald Trump believes lower interest rates will solve America’s economic problems. He believes they will inflate asset prices. He believes they will hand a windfall to his preferred financial parasites—crypto promoters, leverage addicts, and assorted balance-sheet illusionists. He also believes cheap money gives him more room to maneuver around his own legal and financial exposure.

He is wrong—but in a very specific and dangerous way.

Lower interest rates can be appropriate in the right macroeconomic context. No serious person disputes that. Rates are not holy scripture; they are tools.

What Trump wants is not policy calibration.

It is political coercion.

Forcing rate cuts under political threat would indeed “solve” today’s problems—by detonating them.

Not because lower rates are inherently evil, but because the moment markets believe monetary policy is being dictated by a presidential tantrum, credibility dies. And once credibility goes, inflation expectations unmoor, capital flees, and risk premiums spike faster than pundits can invent excuses.

That’s the part the rate-cut crowd never mentions.

This wouldn’t just juice inflation. It would:

• Accelerate Treasury-driven financial repression

• Undermine global confidence in U.S. debt markets

• Put trillions of dollars in Treasuries, notes, and bills at risk

• Turn the dollar from a trusted reserve into a managed political token

At that point, people will look back on the Powell era as a golden age of sobriety.

Does the Fed sometimes move too slowly? Probably.

Could we theoretically abolish the FOMC and just let bond markets set rates directly? Sure. That would be a coherent—if radical—system. If that were being considered, I’d be boxed in with a snarky comment on that idea.

But that is not the system we built.

And perhaps quaintly, it is not the law.

But most importantly, it is not what the world has been pricing for seventy-odd years.

What absolutely does not work is letting the most impulsive man in government decide that if billionaires need a liquidity pop, the economy should be sacrificed accordingly.

We have already run this experiment.

In the 1970s, the Fed lost control under political pressure. Inflation metastasized. Credibility collapsed. It took Paul Volcker nearly a decade of deliberate economic pain to restore order—and the process felt, to those living through it, like detoxing from heroin without anesthesia.

That was the cost of politicized money.

And yet here we are, flirting with a rerun.

This is not an accident. It is nostalgia. The Junta longs for a pre-Fed world, a pre-1914 fantasy where money bends to the will of strongmen and kings play accountant. Trump doesn’t want an independent central bank. He wants a court alchemist.

Which brings us to the inevitable objection:

Why should I care? I’m not rich.

You should care because every dollar you earn, every price you pay, every retirement account, mortgage rate, and grocery bill rests on one simple thing: confidence in the U.S. economy’s institutional sanity.

That’s it. No ideology required.

If the United States starts threatening to imprison central bankers for setting interest rates incorrectly, global capital will not argue with us—it will leave. U.S. debt will be purchased only by captive domestic institutions and government trust funds forced to buy it by statute.

Everyone else will demand safer jurisdictions.

We’ve seen this movie abroad, too.

Britain did not lose reserve-currency status overnight, but part of its decline traces directly to politicized monetary management—election-cycle manipulation, currency games, and short-term thinking. Margaret Thatcher wasn’t the only practitioner, but she refined the art: juice the economy before elections, choke it afterward.

The result was not prosperity. It was a permanent discounting of credibility.

Trump wants to buy a Ferrari and drive that road at full throttle.

That’s why this matters.

Removing Powell without legitimate cause would not crash the economy because Powell is irreplaceable. He isn’t. It would crash because it tells the world the United States no longer respects the boundary between politics and money.

At that point, we stop being exceptional. Capital migrates—to Europe, to Asia, to anywhere that offers predictable rules and adult supervision.

Then we’re just another country: flag, debt problem, volatile leader—only this one happens to have nuclear weapons.

That’s why you should care.