Way back in ancient history, okay, actually on July 13, 2025, these pages published the following article:
Will Trump’s War on the Fed Crash the Markets?
Ever since that time, President Trump has continued his relentless, nonsensical attacks on America’s Central Banker with classic postings like this one:
Let’s dissect this rant from Tuesday so the ignorant among us can not accuse this author of simply mocking the ignorance of this post.
- There is no inflation. – I’ll take the over on that one sparky
- The Fed Funds Rate is hurting housing. – That statement is truly for the financially impaired who have no clue how the American financial system works. The primary driver is the US 10 year yield and that’s being artificially suppressed by market intervention at the moment.
- People can’t get a Mortgage because of him. – You’re administration, thankfully, is deporting the only people who want a mortgage because they know they can default on the loan long before they get in legal trouble. Perhaps, Mr. President, should review your inflationary policies that the administration started in 2020 while you were in charge to understand why homes are no longer affordable and people with sub 700 FICOs can’t get a mortgage.
- Every sign is point to a major Rate Cut. – Only in your world. Real inflation measures plus employment data, lagging and nonsensical as some of it might be, is not pointing to the necessity for a rate cut. Otherwise you’re admitting the economy is about to collapse because of your trade war.
- “Too Late” is a disaster! – We told you that when you appointed him in 2017.
Tomorrow morning, Chairman of the Fed “Too Late” Jay Powell will walk up to the microphones and do what he does best. He will give a lawyer’s answer to a question that does not exist.
There will be inferences which support the recent statement of many Federal Reserve Governors that there is no reason to increase rates as the President said the “economy is strong” and the data supports this. Inflation is the number one issue the Federal Reserve has to deal with and according to any reasonable metric, especially Sticky CPI and Supercore CPI, it is breaking out to the upside as a consequence of excessive spending and the trade war.
The only indirect dig this author expects to hear tomorrow from Chair Powell will be a slight against the trade policy where some vague reference to the tariffs will be given and that being justification for more analysis before taking any rate action.
This of course will initially cause the equity and bond markets to fall in price, but end the day essentially flat as any serious trader, aka, someone with real money is on vacation at noon tomorrow until after Labor Day. Nvidia’s earnings might seem like the “big deal” next Wednesday but the reality is it is the PCE price release on August 29th which will seem like a small spark but will end up being the spark that triggers a financial fire in the weeks to come.
For the geek kingdom, enjoy the speech tomorrow. I have a meeting until 9 a.m. so no commentary on social media (X) will appear until then from these pages while Mr. Powell speaks. I would not get too excited unless Powell goes completely off script and delivers an August of 2022 style speech, which would set the entire financial system on fire.
I was in college when Paul Volcker did his thing to markets in the early 1980s.
Trust me, Jay Powell is no Paul Volcker.
Look for him to provide nothing more than distortion and deflection as a result.
*** UPDATED *** Unless the speech is leaked prior to the market open, Chair Powell is not speaking until 10 a.m. ET. I’ll attempt to monitor and offer commentary on X as time permits.