President Trump Versus Fed Chairman Powell Is a Five-Dimensional Drama

Plus: Massachusetts mulls “mileage tax” to replace dwindling gas-tax revenue

President Trump’s handwritten note to Fed Chairman Powell about high borrowing costs for America. “You have cost the USA a fortune,” Trump said.

The hottest drama in Washington and on Wall Street is the fight between President Trump and Federal Reserve Chairman Jerome “Jay” Powell.

Each day brings one or more incremental twists. Today it was a jobs report that Scott Grannis characterized as “mediocre”— “Nothing in this report should give the Fed a reason to keep monetary policy tight.” Also today came interviews by Treasury Secretary Bessent with Fox Business and CNBC in which Bessent called the Fed “a little off here in their judgment,” and called the Fed’s rates “too high.” The day before it was a Bloomberg story about the possibility that Powell would remain at the Fed as a governor until January 2028 even after his term as chair expires in May 2026. The same story floated the scenario that Bessent could serve as Fed Chair and Treasury Secretary simultaneously.

On June 30, the news was President Trump’s tweet of a list of central bank rates worldwide, along with a handwritten note: “Jerome—You are, as usual, ‘too late.’ You have cost the USA a fortune and continue to do so — you should lower the rate—by a lot! Hundreds of billions of dollars being lost! No inflation.” Trump included an arrow indicating that U.S. interest rates should be between 0.50% and 1.75%.

“Jerome ‘Too Late’ Powell, and his entire Board, should be ashamed of themselves for allowing this to happen to the United States. They have one of the easiest, yet most prestigious, jobs in America, and they have FAILED — And continue to do so. If they were doing their job properly, our Country would be saving Trillions of Dollars in Interest Cost. The Board just sits there and watches, so they are equally to blame. We should be paying 1% Interest, or better!” Trump said.

To understand why this is such an important and fascinating story it’s worth taking a step back from the day-to-day and thinking about the five different levels on which the Trump-Powell fight is operating.