Donald Trump has suggested Jerome Powell could be sacked for fraud as pressure builds on the Federal Reserve chairman over a multi-billion dollar renovation of the central bank.
Following reports that Mr Trump was preparing to oust the Fed chief, the president told reporters: “I don’t rule out anything but I think it’s highly unlikely unless he has to leave for fraud.”
Twisting what he said there more than a bit, no?
That’s one reason why I didn’t bother to listen to the interview with Trump conducted by Al Beeb the other day.
Who could forget their coverage of a press conference during covid, where Trump said something at the beginning (about bleach?) and the beeb cut to a look of horror from one of the scientific ‘experts’.
Thing was, the reaction of the expert was spliced in, from 40 – 50 minutes later, to a totally unrelated question and after Trump had left the press room.
Powell claims he “can’t” cut interest rates because of “Trump’s tariffs”.
But Trump’s tariffs are a tax on American consumers. Last month these new taxes contributed to an unexpected US federal government surplus of (iirc) about $27Bn
From a monetary policy pov, tax increases are not usually inflationary. Tariffs are inflationary in the short term, but it’s the relatively benign form of inflation, if we can put it that way? (compared to prices rising because the value of the money in your pocket is being whittled away due to money printing)
So it seems to me the President has grounds for being unhappy with the unelected “expert”? Also, as a central banker, he consorts with the Devil.
The ‘Telegraph’ long since ceased to be a respectable newspaper.
Julia
I ditched my subscription a couple of years back and no regrets. Ever since the CIA/ MI6 started throwing any critic of the Ukraine misadventure off the comments section. Many of the columnists would be Left wing even by North Korean standards.
I would say it’s an ideal representative of what the Conservative party has become – otherwise its essentially worthless
But Trump’s tariffs are a tax on American consumers. Last month these new taxes contributed to an unexpected US federal government surplus of (iirc) about $27Bn
As an American, I have to ask: do you really believe this shit? The US budget deficit in 2024 was about $1.8T, or $150B/month. Spending hasn’t gone down; the Big Ugly Bill wants to take the DOGE cuts and use them (and more spending) on defense; and tariff revenue on tariffs that for the most part haven’t even kicked in yet brought in close to $200B?
@Ted S
“ As an American, I have to ask: do you really believe this shit? ”
What exactly is it, as an American, that you don’t understand about price competition?
As a British person, I started work for a US company in the 1970s, handling products imported from that US company. There were two classes of goods, one with an import tariff of 15%, the other 7%.
So I know from experience how imports and tariffs work and I can tell you that ALL costs of delivering a product to market are included in the ended-user price and therefore paid by the consumer.
Landed cost of imports = seller invoice price + shipping + clearing costs + Customs (tariffs) if any.
Selling price to market = landed cost + mark-up.
The importer pays tariffs up front, but includes them in the landed cost, which is recovered in the selling price to consumer.
So if the seller (exporter) doesn’t pay the tariffs, if the importer pays but recovers the cost in selling price to consumers, and as you insist the consumer doesn’t pay the tariffs – then who does?
And another thing.
The sole purpose of tariffs is to protect profits of domestic producers who can keep their prices high, since they are protected from lower price imports. This is at the expense of the consumer.
Suggesting that by buying domestic producers, tariffs can be avoided is nonsense. No sane business owner who had had to reduce prices in the face of lower price competition, would keep prices low if the competition were removed.
The President can’t appoint the Chairman of the Fed directly. He can only choose from a list of five names given him by the Fed itself. Neither can he fire the Chairman unless it’s for cause. It’s looking like the eye-watering costs of updating the Eccles building, the home of the Fed, is going to provide the cause Trump needs.
“The sole purpose of tariffs is to protect profits of domestic producers” – my impression is that very often they are intended to protect domestic jobs, usually union ones. In the 70’s & 80’s the UAW was a big promoter of tariffs on Japanese cars.
You can still disagree with them, but it’s the jobs angle that gets widespread support.
John B, I’m not sure why you’re picking a fight with Ted S there.
His point was that he doesn’t believe the US had a Federal surplus in June
“the eye-watering costs of updating the Eccles building”
What madness infects the high heid yins when they decide to spaff money on luxuries for themselves that can’t be hidden from the taxpayer?
‘All power tends to corrupt, and’ … I know; but why don’t they know too?
Ted – As an American, I have to ask: do you really believe this shit?
As a Neanderthal, I have no other source of information on the matter than the US Treasury Dept and media reports of US Treasury Dept figures.
NB they’re not claiming the deficit has gone away, or that other months will record a surplus, or that they expect June’s figures to be replicated in future. But tariffs have increased, that money is going somewhere?
In the overall context of US govt spending and debt, $27Bn is, frighteningly, Not A Lot. I don’t get the sense your Treasury wonks were playing a game, but you would know better than me. Steve just simple cave hominid who hunt hairy elephant. (Don’t tell her I said that)
John – Suggesting that by buying domestic producers, tariffs can be avoided is nonsense. No sane business owner who had had to reduce prices in the face of lower price competition, would keep prices low if the competition were removed.
But that’s assuming all other things remain ~ equal? Which they don’t. The US is the largest economy on the planet, in a vast, continental scale territory, with a population that’s legendarily entrepreneurial. If Chinese(-goverment subsidised) competition is removed or reduced in any particular sector, you would expect increased US competition to rapidly fill the breach.
Except maybe for stuff that requires very high capital investments, e.g. steel? And other things where supply is relatively inelastic and/or govt. subsidised?
DM – What madness infects the high heid yins when they decide to spaff money on luxuries for themselves that can’t be hidden from the taxpayer?
And at least Le Roi du Soleil had taste.
‘All power tends to corrupt, and’ … I know; but why don’t they know too?
Because they always assume that they are the exception to the rule and inviolate.
Federal monthly deficit/surplus is here: https://fred.stlouisfed.org/series/MTSDS133FMS/
The data is noisy and bounces up and down a lot, so it is not unusual for there to be brief surpluses, but the average is about -$200bn and there is no evidence of a change. This is sort of like mentioning that on the day of the global warming conference the weather in London was hotter than average. Both statements are technically true, but it is intentionally misleading to put them together in the same sentence as if they had anything to do with one another.
“my impression is that very often they are intended to protect domestic jobs, usually union ones.”
Those are the producers, yes?
“If Chinese(-goverment subsidised) competition is removed or reduced in any particular sector, you would expect increased US competition to rapidly fill the breach.”
Then they would have out-competed the foreign industry before the tariffs.
They can’t have it both ways. Either foreigners can supply it cheaper than American’s, in which case the prices must go up (ceteris paribus) when foreign supplies are blocked, or American’s can supply it at the same price or cheaper than the foreigners, in which case you don’t need tariffs.
In my view, the trade balance is a reflection of the US generally and the government in particular spending more than it earns and borrowing (partly from abroad) to cover the difference. This of the US as like an individual household. You do work and export it to the world in exchange for money, and then you go down to the grocery store to spend the money, importing goods from the rest of the world into your household. If you spend more than you earn, that means you buy more groceries than the work you do is worth. The budget deficit is just another way of looking at the trade deficit.
When they borrow the money to cover the gap from abroad, that constitutes a flow of dollars into the US. If that isn’t balanced by a net outflow of dollars to the rest of the world in trade, the alternative would be that the dollars all pile up in the US. Raising the supply of dollars in the US lowers their value there, and reducing the number of dollars outside the US makes the dollar worth more abroad. The result is a shift in the exchange rate, making imports into the US more attractive and exports from the US more expensive.
As a loud and noisy tactic to shake up the world’s complacency and shock them into negotiating freer trade deals, it has proved very effective and I applaud it’s successes. Trump has achieved more for free trade than many decades of economic wonks moaning and lecturing. But the whole point of it is that it is such a horribly bad idea that you get everybody to agree to stop doing it. It’s not an achievement to do it. However, compared to the federal budget deficit, the trade deficit and the tariff income is down in the weeds, so it doesn’t actually have all that much impact on the US. They can afford to gamble and lose a bit if it leads to movement on more trade deals.
But it doesn’t address the fundamental problem, which is that the US, and its government in particular, is still spending more than it earns. DOGE, despite the hype, was all down in the noise too. But even Trump is finding that stopping the welfare spigot is politically out of reach, despite nominal majorities in both Congress and the Senate, because the whole country is addicted to welfare.
It’s the same in the UK. You can sort of persuade people that it’s unsustainable and they have to cut back, but as soon as you mention something specific to cut, like the NHS or the schools or the BBC or the public libraries, everyone melts down. ‘Beloved British institutions…’ Or Net Zero. ‘Saving the planet from fires and floods…’ It’s not until people are truly desperate that they are willing to even consider giving up their addiction. We’re not there yet – look how long it took Argentina! – and despite all the hype, neither is the USA. The politicians are simply reflecting the public mood on that.
NiV – Then they would have out-competed the foreign industry before the tariffs.
How naive of you. When you’re competing with Chinese firms, you’re also competing with the Chinese Communist Party, its IP-thieving spies, its complete lack of interest in enforcing environmental standards and its fantasy world dizzy economic policies.
There’s business we should probably let them buy – can’t see why we would want to be in the business of making electric cars that sell for only £6,000. But their abuse of trade rules to give themselves an unfair and unsustainable advantage is real. And we can’t earn a living doing each other’s washing.
It’s the same in the UK. You can sort of persuade people that it’s unsustainable and they have to cut back, but as soon as you mention something specific to cut, like the NHS or the schools or the BBC or the public libraries, everyone melts down.
Because there’s no leadership. The Blessed Mrs Thatcher knew how to rip off an elaster plaster.
Saint Maggie, pray for us!
+1. NiV. As usual, your comment is misunderstood
Its a good job the BoE doesn’t live in the Eccles Building, we might not take them seriously enough:
https://www.youtube.com/watch?v=JrpnJo2fRt4
@Diogenes,
Thank you! It makes me happy if people understand!
But wouldn’t it be a dull world if we all agreed on everything?
“When you’re competing with Chinese firms, you’re also competing with the Chinese Communist Party, its IP-thieving spies, its complete lack of interest in enforcing environmental standards and its fantasy world dizzy economic policies.”
And yet despite all this, they’re doing a roaring trade! China is selling lots of the stuff people want at a low, low price! How come we’re being beaten by communists with dizzy economics if we’re so much better?!
Free market principles say you ought to win by being the best, not by walling out the competition. You beat them by providing better quality stuff cheaper than they do. If we can’t even beat the effin’ *Chinese Communist Party* at capitalism, we’re doing something wrong!
The West is self-crippled by insane environmental regulations, expensive employment-protection regulations, and out-of-control tax-and-spend welfare-splurging governments. The balance of-trade-problem and the difficulty competing with cheaper foreigners and the lack of economic mojo everyone is feeling right now are *all caused by our own governments!* And rather than fix that problem, our governments are making it worse by adding crippling protectionism and more regulation.
Trump has done some good by ripping out some of the environmental regulation. But he needs to drop a bunker buster on the deep state, take an axe to spending, and burn the unions and their protectionist employment regulations to the ground. Tariffs are not the answer. Getting government *out of the way* is the answer.
Tariffs are bad policy! But *reciprocal* tariffs as a tool for *getting rid of* tariffs are potentially a brilliant policy, if he can pull it off. We’ll see.
“But their abuse of trade rules to give themselves an unfair and unsustainable advantage is real.”
Trade *restrictions* can never give an advantage. The free market is optimal.
The trade imbalance is because they spend more than they earn. It’s like complaining that the supermarket keeps selling you cheap vodka, driving your credit card debt ever higher. It’s not the supermarket’s fault! Stop spending! Earn more!
@ The Excellent Ted living among mounted killer cats.
The US budget deficit in 2024 was about $1.8T, or $150B/month
Jesu on a pogo. If the USA population is 375million, cos it makes the arithmetic easy, then that is $400 a month per person, or $1200 a month for a household of 3. Averages of course.
If a govt employee called to say we’ve got this new govt programme called balancing the budget in a stagnant economy and we want $1200 from you, what would the reaction be? Or if they said we want the same off the top of government spending instead. Is it any wonder governments try to inflate it away.
Keep growing the USandA, because the moment you don’t, you’ll be as fucked as that patch ruled by King Charles.
John @10:24 AM; Steve @11:28 AM, and NiV @12:35 AM.
Having done a bit of googling (I wrote my previous comment just before heading off to work so didn’t have time to go further), I’m guessing the illusory “surplus” has to do with whatever they’re talking about in this article:
https://www.cnbc.com/2025/07/11/treasury-posts-unexpected-surplus-in-june-as-tariff-receipts-surge.html
But since customs duties were only $27B in June, it’s obvious that the “monthly” surplus is down to odd timing of how revenue is calculated posted. From NiV’s posting of the St. Louis Fed charts, I see that there’s a huge surplus pretty much, every April, which is very likely because that’s when people who owe money to the federal government write the tax check. Nobody seriously thinks in April that FedGov is running a surplus.
There are, however, people apparently credulous enough to believe that the tariffs will magically cause real budget surpluses on an annualized basis. Or something. It fails the common sense test.
NiV – China is selling lots of the stuff people want at a low, low price! How come we’re being beaten by communists with dizzy economics if we’re so much better?!
Because more than six impossible things can simultaneously coexist in fact. The Chinese are brilliant at manufacturing and it’s an economic miracle how far they’ve come since DXP, no? I love their products. Lenovo kit feels lightweight, but works. Their smartphones are top shelf (why wouldn’t they be?) and good value. I respect the Chinee as a people, they’re always one of the main civs in Civ for a reason. Many, many of them are great lads. And a racist would never order a chinky, would he?
Free market principles say you ought to win by being the best, not by walling out the competition. You beat them by providing better quality stuff cheaper than they do. If we can’t even beat the effin’ *Chinese Communist Party* at capitalism, we’re doing something wrong!
Look around. Does it look like we’re in a free market, hombre?
But he needs to drop a bunker buster on the deep state, take an axe to spending, and burn the unions and their protectionist employment regulations to the ground. Tariffs are not the answer. Getting government *out of the way* is the answer.
Amen.
Ted in the Catskills (which look lovely btw) is skeptical (?) sceptical? I can never remember. but in context,
WASHINGTON, July 11 (Reuters) – U.S. customs duty collections surged again in June as President Donald Trump’s tariffs gained steam, topping $100 billion for the first time during a fiscal year and helping to produce a surprise $27 billion budget surplus for the month, the Treasury Department reported on Friday.
Reuters
That doesn’t sound like Trump is losing.
Bongo – Is it any wonder governments try to inflate it away.
Cheap, abundant, locally sourced hydrocarbons is a more promising option?
Sure.
All of which is beside the point. You claimed that
And the point NiV was making was that this will increase costs to the consumer. If the dazzling US competition could compete with the subsidized Chinese producer, they would have been doing-so over the past ten years. If they cannot – whether becasue of government subsidy, inherent inferiority, or black magic – when they start to supply that market they will do so at a higher cost.
You then switch to Chinese government subsidies. Is the CCP subsidising my next EV (hah – as if, but bear with me) “fair?” Well, fair to whom? It’s a great deal for me, and a crummy deal for Tesla. Is the Canadian government doing the same thing fair? Well, it’s a great deal for me (and Tesla) and a crappy deal for Canadian taxpayers. None of that bears on whether ending the subsidy, or imposing a tariff will increase prices – of course it will.
Stop galloping, Mr Gish.
dcardno – No, you’re missing the point.
The point is we don’t live in a free market, we’re not going to live in a free market, and arguing about how many Milton Friedmans can dance on the head of a pencil is a waste of time.
Import substitution doesn’t necessarily mean higher long term prices, because the US economy is not static, although it will obvs in the short term and for some goods. It’s not a stunning revelation that consumers pay tariffs, we know. There’s clearly other factors at play than “who’s selling the cheapest widget”.
Trump is losing his base. Look at the rumble videos accusing him of Epstein links.
https://rumble.com/v6wa3c6-epstein-donald-trump-and-sexual-blackmail-networks-w-nick-bryant-the-chris-.html
Nice to see you’re still galloping, Steverino. Right past the point, it would seem.
Regarding the “surplus”, the thought occurred to me that it’s like those British power statistics where they say that at this one particular minute, 73% (or some similarly ridiculously high percentage) of the power was produced by renewables. It may be true for that one minute, but it’s certainly not true over the long term and no way to run a power grid.
Yet magatypes want to bang on about that alleged surplus as though this proves Trump’s economic policies are correct.
@NIV “When you’re competing with Chinese firms, you’re also competing with the Chinese Communist Party, its IP-thieving spies, its complete lack of interest in enforcing environmental standards and its fantasy world dizzy economic policies. And yet despite all this, they’re doing a roaring trade! ”
Despite? Are you being serious? “Because” might be a better word in this situation.