“Fed Members Revolt: Powell’s ‘Dumb’ Tariff Defense Ignites Inflation Debate!”
Federal Reserve policies, inflation rate analysis, monetary policy independence
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In a recent tweet, economist Peter St. Onge criticized Federal Reserve Chair Jerome Powell for his refusal to cut interest rates despite the U.S. experiencing a low inflation rate of just 1%. St. Onge highlighted that Powell’s decision breaks a 112-year precedent of the Fed’s operating procedures, which typically align monetary policy with prevailing economic conditions. He pointed out that Powell’s justification for maintaining high rates, citing “tariff inflation,” is unfounded, as there is currently no significant inflation driven by tariffs.

St. Onge’s tweet suggests that the independence of the Federal Reserve may be compromised by political influences, specifically referencing former President Donald trump. This assertion raises questions about the integrity of monetary policy and whether decisions are being swayed by external pressures rather than being based solely on economic data.

### Understanding Monetary Policy and Inflation

The Federal Reserve plays a crucial role in managing the U.S. economy by adjusting interest rates to control inflation and stimulate growth. Typically, lower interest rates encourage borrowing and spending, which can help boost economic activity. Conversely, higher rates are implemented to curb inflation. In recent years, many economists have argued that the Fed should adopt a more flexible approach to interest rate adjustments, especially during periods of low inflation.

### The Impact of Jerome Powell’s Decisions

Under Powell’s leadership, the Fed has faced criticism for its cautious approach to interest rate cuts. With inflation at a mere 1%, many believe that a rate cut could stimulate economic growth and support job creation. However, Powell’s reliance on the notion of tariff inflation as a reason to maintain higher rates has raised eyebrows. Critics argue that this rationale lacks substantive evidence and may be more politically motivated than economically sound.

### The Role of Political Influence in Monetary Policy

St. Onge’s comments also highlight a growing concern regarding the potential influence of political figures on the Federal Reserve’s decision-making process. The independence of the Fed is considered vital for maintaining economic stability, as it allows for decisions to be made based on objective economic indicators rather than political agendas. St. Onge’s assertion that Powell’s decisions are influenced by Trump underscores the delicate balance between politics and economics.

### Conclusion: The Future of the Federal Reserve

As the economic landscape continues to evolve, the Federal Reserve’s approach to interest rates and inflation will remain a focal point of discussion among economists and policymakers. The ongoing debate over Powell’s leadership and the Fed’s independence raises important questions about the future direction of U.S. monetary policy. Stakeholders will be closely monitoring any changes in the Fed’s stance, particularly as the country navigates the complexities of inflation, economic growth, and political pressures.

In summary, Peter St. Onge’s commentary on Jerome Powell’s decisions reflects a broader discourse about the Federal Reserve’s independence and its crucial role in shaping economic policy. As inflation remains low and economic conditions fluctuate, the Fed’s strategies will undeniably influence the trajectory of the U.S. economy for years to come.

Fed members are going rogue as “Very Dumb” Jerome Powell refuses to cut despite 1% inflation.

Breaking 112 years of Fed precedent.

His excuse is tariff inflation — which is nonexistent.

It turns out “independence” ends where Trump begins. pic.twitter.com/ZxJxpFM2ca

— Peter St Onge, Ph.D. (@profstonge) July 1, 2025

Fed members are going rogue as “Very Dumb” Jerome Powell refuses to cut despite 1% inflation.

In the financial world, few names spark as much debate as Jerome Powell, the current chair of the Federal Reserve. Recently, Powell has faced intense scrutiny, especially from those who feel the Fed is out of touch with the economic realities facing everyday Americans. The tweet by Peter St. Onge, Ph.D., claiming that “Fed members are going rogue as ‘Very Dumb’ Jerome Powell refuses to cut despite 1% inflation,” encapsulates a growing sentiment among economists and financial analysts. The crux of the argument is that Powell’s refusal to lower interest rates, despite historically low inflation, is breaking a 112-year precedent set by the Federal Reserve.

Breaking 112 years of Fed precedent.

For over a century, the Federal Reserve has been a stabilizing force in the U.S. economy, generally following a playbook that includes adjusting interest rates in response to inflation rates. The current situation, where the Fed is hesitant to cut rates despite inflation being at a mere 1%, raises eyebrows. Historical data shows that when inflation is low, the Fed typically lowers rates to stimulate economic growth. This long-standing precedent has been a guiding principle, but Powell’s approach signifies a departure from these norms. It’s as if the Fed is navigating uncharted waters, and many are left wondering what this means for the future of American economic policy.

His excuse is tariff inflation — which is nonexistent.

One of the primary justifications Powell has offered for maintaining high interest rates is the concern over “tariff inflation.” However, critics argue that this excuse doesn’t hold water. Many economists believe that the impact of tariffs has been exaggerated and that the inflationary pressures they create are largely nonexistent. For instance, in a Forbes article, it is discussed how the actual evidence linking tariffs to significant inflation is weak at best. Instead, markets are reacting to a range of other factors, including supply chain disruptions and consumer demand shifts, rather than the tariffs themselves. By leaning on this argument, Powell may be sidestepping the real issues and refusing to adapt to the current economic landscape.

It turns out “independence” ends where Trump begins.

The notion of the Federal Reserve’s independence has been a cornerstone of its operation. However, the political climate, especially during and after Donald Trump’s presidency, has put this independence to the test. Critics like St. Onge suggest that Powell’s decisions may be influenced by political considerations rather than purely economic ones. This raises questions about whether the Fed can truly operate independently when external pressures loom large. In the Wall Street Journal, it’s noted that economic policies and decisions are often scrutinized through a political lens, complicating the Fed’s mission.

The implications of Powell’s decisions on the economy.

So, what happens when the Fed members start going rogue, as some have claimed? The implications could be significant. High interest rates can stifle borrowing and spending, which are crucial for economic growth. Consumers may hold off on big purchases, and businesses could delay investments due to the higher cost of financing. This can create a ripple effect, slowing down the economy even further. In an analysis by CNBC, it’s indicated that the longer Powell maintains high rates, the greater the risk of pushing the economy into recession. The Fed’s role in ensuring economic stability becomes a tightrope walk, balancing between inflation control and fostering growth.

Responses from economists and market analysts.

Economists and market analysts are sounding the alarm, urging the Fed to reconsider its approach. The sentiment is growing that Powell’s policies may not only be misguided but could potentially lead to long-term detrimental effects on the economy. Many argue that now is the time to cut rates, especially with inflation at such low levels. In a New York Times piece, various economists express concerns that the Fed is missing an opportunity to stimulate growth. It’s crucial for the Fed to align its policies with current economic indicators rather than cling to outdated strategies.

The public’s perception and trust in the Fed.

Public trust in economic institutions like the Federal Reserve is vital for a stable economy. If people feel that the Fed is out of touch or acting on political whims rather than sound economic principles, it could lead to widespread skepticism. This skepticism can affect consumer confidence, which is essential for a healthy economy. The more people doubt the Fed’s decisions, the less likely they are to spend or invest, potentially creating a self-fulfilling prophecy of economic slowdown. A Pew Research Center survey reveals that trust in government institutions is at an all-time low, and the Fed is no exception.

Looking ahead: What’s next for the Federal Reserve?

As we look to the future, the Federal Reserve’s path remains uncertain. Will Powell and his colleagues acknowledge the changing economic landscape and adjust their policies accordingly? Or will they continue down this road of high interest rates, risking economic stagnation? There’s a growing call for more transparency and accountability within the Fed, with many advocating for a more data-driven approach to policy-making. The stakes are high, and the decisions made in the coming months could have lasting effects on the economy.

In summary

The current situation surrounding the Federal Reserve, with Powell at the helm, is a complex interplay of economics and politics. As Fed members reportedly go rogue and question Powell’s strategies, the implications for the economy could be profound. With inflation at just 1% and many arguing that tariff inflation is a non-issue, the need for a reevaluation of policies is pressing. The question remains whether the Fed can adapt while maintaining its independence, and how public trust can be restored in the wake of these challenges.

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