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Comment by belter | Hacker News Reader

6 points·belter··4 comments

This is a big deal. This is even bigger than the tariffs.

People like Ray Dalio are saying that we are risking the collapse of the US dollar, not recession, not depression, potentially "something worse than a depression". Elizabeth warren is saying that firing Powell will crash the market.

Jerome is not a person I envy defending, but if he is fired you will see panic and you will understand the gravity of how damaging "no trade deficits" can be. An unfortunate consequence of privilege is you rarely understand you have it: Exorbitant Privilege (economics) https://en.wikipedia.org/wiki/Exorbitant_privilege

You may not like Powell. You may not think he's done a good job. Whatever.

We've watched Trump have the tariff-of-the-day purely at his decision. Now imagine that's happening with interest rates and the value of the dollar. That's why an independent Fed is essential.

Even if Powell isn't fired, his term is up in a year anyway and Trump appoints his successor. It's just delaying the inevitable.

And he signaled pretty strongly in his first term that he was pissed he didn't have more control over the Fed. It was a safe bet that was one of the "deep state" (I cannot roll my eyes hard enough on that one, in case that doesn't come through from the scare quotes) hurdles he and his P2025 pals were planning to remove at some point so they couldn't get in the way of the autocracy agenda, this term, and that his next appointment (whether it comes after a questionably-legal firing this year, or next year at the end of Powell's term) will be someone who'll do whatever Trump wants.

I don't even know what'll happen if there's a blatantly politically-motivated interest rate drop. Nothing good. I'm not even sure consumer and business rates will follow suit like they normally do, due to the perceived risk in the current economy. It's gonna be weird.

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