Trump Hit with Rude Awakening as Market Sends Him Brutal Message

Summary

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Legal AF by MeidasTouch

Episode: Trump Hit with Rude Awakening as Market Sends Him Brutal Message
Date: October 31, 2025
Host & Legal Analyst: Michael Popok

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Episode Overview

This episode examines Donald Trump's strategy to blindfold the Federal Reserve by withholding key government economic data, the subsequent actions taken by the Fed in response, and the broader implications for both U.S. monetary policy and the average American. Michael Popok, stepping in solo for this segment, provides an in-depth legal and economic analysis of Trump’s maneuvers, the dynamics between fiscal and monetary policy, and the Federal Reserve's decision to cut interest rates despite the lack of the “gold standard” data.

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Key Discussion Points & Insights

1. Trump’s Attempt to Manipulate the Federal Reserve

• Trump’s Tactic: During the government shutdown, Trump blocked the release of critical economic reports from the Bureau of Labor Statistics (BLS), attempting to put the Fed "in a black box" to force a rate cut.

  • "I am sure it was Donald Trump's intention to deny the Federal Reserve key economic data that comes from the Bureau of Labor Statistics to put a blindfold around them..." (Michael Popok, 02:51)

• The Backfire: The Federal Reserve, led by Chair Jay Powell, instead responded with caution, leveraging private sector data sources as proxies for government data, and issued only a modest rate cut.

2. The Federal Reserve’s Response & Independence

• Alternative Data Sources: Powell listed alternatives like the Beige Book, Adobe, ADP, and other private economic trackers, but made clear these are imperfect substitutes.

  • "[There are] lots of other things that we look at, but again, it's many, many different sources. And again, including what we get out of the Beige Book..." (Chair Jay Powell, 08:47)

• Cautious Policy in Uncertainty: Powell analogized the situation to "driving in the fog," indicating that without clear data, the Fed would move more slowly on future rate decisions.

  • "If you're driving in a fog, you slow down. So that could or could not...I don't know how that's going to play into things....We may get the data back, but there's a possibility that it would make sense to be more cautious." (Jay Powell, 09:51)

• Policy Mechanics: The episode clarifies the constitutional separation between the president’s fiscal policy and the Fed’s monetary policy, emphasizing the risk of allowing one leader control over both levers.

3. Central Bank Decisions – Process and Tensions

• FOMC Vote: The vote to cut interest rates by 0.25% was 10–2, with even some Trump-aligned board members supporting the cut, despite Trump's wishes for more aggressive action.

  • The committee structure and rotation of voting members (12 total: 7 Board of Governors, 5 regional Fed presidents) is explained.

• Trump’s Expectations: According to Popok, Trump wants the Fed to behave recklessly, slashing rates to create an artificial economic high for short-term political gain, disregarding risks to long-term stability.

  • "He just wants free money. Fire it out. You know, a hundred dollar bills being fired out of a fire hose." (Michael Popok, 11:08)

4. Broader Political and Economic Implications

• Supreme Court’s Role: A pending SCOTUS case may address the legality of Trump’s trillion-dollar tariffs and potentially his attempts to control the Federal Reserve, underscoring the importance of Fed independence.

• Impact on Americans: Popok argues that Trump’s government shutdown and related maneuvers are causing real hardship—from rising consumer costs to stalled benefits.

• Historical Precedent: Multiple times, Popok stresses that no democracy has allowed a head of state to control both economic levers without disaster ("every dictator or president that's gotten control of the Federal Reserve has wrecked the economy and created hyperinflation" – 12:30).

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Notable Quotes & Memorable Moments

• On Trump’s Strategy:
  "Donald Trump's decided, let me put them in a barrel in a black box...Except there's other independent sources that say the Trump economy is terrible."
  (Michael Popok, 04:39)

• On Government Data vs. Private Sources:
  "It doesn't replace government data... but it gives us a picture. Again, I think if something material were happening... I think we would pick that up. I don’t think we’ll be able to have the very, very granular understanding of the economy while this data is not available."
  (Jay Powell, 08:47)

• On Policy in Uncertainty:
  "When you’re in a fog, you slow down."
  (Jay Powell, 10:59)

• On Presidential Overreach:
  "That's why we don't want presidents or dictators or dictator presidents to have control of monetary policy at the Fed, the central bank, fiscal policy, his own policy and the data. And Donald Trump is trying to get all three, manipulating all three..."
  (Michael Popok, 11:07)

• Historical Analogy:
  "Every dictator or president that's gotten control of the Federal Reserve has wrecked the economy and created hyperinflation. And there are no examples of that not happening."
  (Michael Popok, 12:30)

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Important Timestamps

• 02:00: Introduction to the BLS data shutdown and Popok’s analysis of Trump’s motives
• 08:47: Chair Jay Powell lists alternative economic data sources in Fed press conference
• 09:51: Powell explains why Fed policy will be more cautious in absence of government data
• 11:07: Popok explores why Trump's attempt to control all levers of economic power is unprecedented and deeply dangerous
• 12:30: Warning about historical consequences of central bank capture by heads of state

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Tone & Style

Popok delivers the analysis in his signature style: sharp, slightly sardonic, and deeply informative. He invokes both historical precedent and legal frameworks, makes frequent use of vivid metaphors (“blindfold,” “driving in the fog,” “hundred dollar bills being fired out of a fire hose”), and does not conceal his critique of Trump’s tactics.

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Takeaways

• Trump's effort to deny the Fed government economic data failed, as the central bank used alternative, if less precise, means to make policy decisions.
• The core tension between monetary policy (Fed) and fiscal policy (President) is vital for economic stability—the episode repeatedly underscores the dangers of political interference in central banking.
• The current moment is unprecedented, with critical Supreme Court arguments on the horizon, and Fed leaders operating under exceptional constraints.
• The episode ends with a call for support and engagement from listeners to help keep Legal AF’s independent legal reporting strong.

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Transcript

[A]

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[A]

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[B]

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[C]

Donald Trump's efforts to blindfold the Federal Reserve to deny it during the shutdown on purpose Key economic data coming out of the Bureau of Labor Statistics has effectively backfired because now the Federal Reserve, led by its chairman Jay Powell, during a press conference following the vote of the Federal Open Markets Committee, said, when you're in a fog, you slow down, you don't go faster. So if Donald Trump thought he was gonna buy himself yet another rate cut by denying key economic data to the Federal Reserve, that backfired on him. Now, yes, the Federal Reserve had to do another bailout of the Trump economy. I mean, the interest rate it set today, cutting another quarter of a point, is effectively half of what the interest rate was when Joe Biden was president. And Joe Biden had a roaring Economy. Get that? Joe Biden had a deal with 5.3% or so interest rates at the bank to bank level. Now it's down to 2 point. Now it's down to 3.75 to 3.9%. And the economy is still stuck in a rut and still crushing Americans. And now it's the Federal Reserve to the rescue, including the two people, the two enemies of Donald Trump, perceived enemies in Jay Powell, the Federal Reserve chairperson and the board of Governor Lisa Cook, who voted for the rate cut because they're looking at a American suffering. I'm Michael Popak. You're on the Midas Dutch network and legal af. I got to put my Wall street goggles on to see through this fog. I am sure it was Donald Trump's intention to deny the Federal Reserve key economic data that comes from the Bureau of Labor Statistics to put a blindfold around them, to put them in a black box so they couldn't make economic decisions other than a lower rates. That's not what Jay Powell did. Because there are other private sources of economic data that the Federal Reserve can rely on, including the Beige Book, its own internal analysis, which is done regionally around the country, and other entities that provide data privately. You can see what purchasing managers are doing. There's data about that. You can see what supply chain managers are doing. You can see job reports from places like adp, the payroll company. You can see it from some statistical sources. You can see it from Adobe. These are all things that are relied upon. They're not replacements for the gold standard of the Bureau of Labor Statistics, which Donald Trump has effectively shut down. They didn't issue their reports. They didn't find that to be critical information that's necessary to set the course of the economy. There's two halves to the economy. There's the fiscal policy that's set by the President of the United States and that includes his domestic spending policies, his budget bill that's been passed, his funding at the state level, right. Where he spends his money, how he spends his money, how jobs are created by the participation of the US in the US Economy, and includes his tariff policies, which are the centerpiece of Donald Trump's failed economic policies and their impact on the economy. Now they're about to be ripped down, hopefully by the Supreme Court. There's an oral argument in the first week of November, next week about whether he even had the power to collect a trillion dollars worth of tariffs from 130 countries. But the Federal Reserve, the second half of the equation is the Federal Reserve on monetary policy. And we have never allowed a President to have control of both monetary policy and fiscal policy. See, the Federal Reserve is independent, or is supposed to be, and they make decisions in reaction to what they see from the President's economic policies, his fiscal policies. If they suck, which they do here, then they've got to lower the interest rates in order to get money pumping through the art, the art, the arteries of the American economy. If they feel like there's hyperinflation, because there's two competing interests that the Federal Reserve are concerned about, because that is their mission. Keep jobs and employment high, keep inflation low. But the problem is higher, high employment sometimes leads to high wages, lots of money in the economy which leads to inflation. So they have to balance the two things and they do it by way of the blunt force object instrument of the interest rate, which is set intra bank between banks and then that flows down. How much banks charge each other to borrow impacts how much they're going to charge you and me for consumer debt, student loans, credit cards and the rest. So you have to hit that. It takes a while to course through the stream of the American economy if you're on the Fed side. Now Donald Trump's decided, let me put them in a barrel in a black box. So they don't know what's going on. Except there's other independent sources that say the Trump economy is terrible. And then when this committee got together today, which is a committee of 12, it voted 10 to 2 to cut the rates a quarter a point. They already cut the rate a quarter a point last month. Now voting for it was 10 people, including Jay Powell, who Donald Trump wants to get rid of, and Lisa Cook, who he wants to fire. Except the Supreme Court pumped the brakes and said see you in January. An oral argument. In the meantime, she's a Federal Reserve on the Board of Governors. The committee is comprised of seven. The seven members of the Board of Governors which run the Federal Reserve, and five additional members which come from a group of 12 that are the Federal Reserve presidents for the regional banks. They rotate five plus seven come together, they form the Federal Open Markets Committee and they vote by majority rule 10 to 2, including two Trumpers. Bowman and Waller voted for the quarter point rate cut. One of the members on the Board of Governors who sort of temporary he vote, he voted. Keith Mirren, he voted to cut it even greater. I'm not surprised because he's in the White House. He took a leave of absence as the chair of the, of the, of the Council of economic advisers to the president to come work at the Federal Reserve. So of course he's a Trumper. He's like, no, the economy's even worse than you people think. I know, I'm in the White House. That's how I interpreted that. So he votes for a half a point and one board of governor voted for or one committee member voted for. No change at all. But the problem is what happens next month, what happens in December. And that's what Jay Powell during his presser today talked about the lack of data. Let's play the clip. Could you give us a sense, I think we know a lot about the jobs data that's out there. Can you give us a sense of what you're looking at to track inflation in the absence of government data? Thank you, Chair Powell.

[D]

So it's a lot of things and it doesn't replace government data. But you know, all of these, it's, I'll just mention some of the many, many names, price stats, Adobe and others. And for wage inflation, there's ADP data on spending. You're going to ask about spending at some point. You know, there are lots of other things that we look at, but it's again, it's, it's many, many different sources. And again, including what we get out of the, of the Beige Book, which will be sort of come out mid cycle as always, and it doesn't, doesn't replace the government data, but it gives us a picture. Again, I think if something material were happening, if there were material developments, I think we would pick that up. I don't think we'll be able to have the very, very granular understanding of the economy while this, while this data is not available.

[C]

Howard clearing.

[D]

Howard Schneider with our Reuters. Thank you.

[C]

I just want you to elaborate a.

[D]

Little bit on what you said a moment ago about, about the lack a continued shutdown making it more difficult to make a move in December and that may make you more cautious. To the degree you are relying on private data that isn't the gold standard or that you're relying on your own surveys of the Beige Book, do you worry at some point you're going to have to start making policy by anecdote? You know, this is a temporary state of affairs and you know, we're going to do our jobs. We're going to collect every scrap of data we can find, evaluated and think carefully about it. And that's, that's our jobs. That's what we're going to do. If you ask me, could, could it affect the, the you know, the December meeting. I'm not saying it's going to, but yeah, you could imagine that, that, you know, what do you do if, what do you do? And if you're driving in the fog, you slow down. So that could or could not. I don't, I don't know how that's going to play into things. We may get the data may come back, but there's a, there's a possibility that it would make sense to be more cautious about moving. I'm not, I'm not committing to that. I'm just saying it's certainly a possibility that you would say we really can't see. So let's, let's slow down.

[C]

When you're in a fog, you slow down. So if Donald Trump thought that he was going to cut off all the inputs into this box of the Federal Reserve that sets rates, this machine that sets rates, cut the fuel lines and hoping they would sputter and he would get a bigger benefit because he's been pushing for cutting the rates in half. He wants the rates to be like 2%. Because he's like a, he's like a sailor on leave. Right? He's like a riverboat gambler with nothing to lose. That's why we don't want presidents or dictators or dictator presidents to have control of monetary policy at the Fed, the central bank, fiscal policy, his own policy and the data. And Donald Trump is trying to get all three, manipulating all three because there are short term and long term horizon problems. Trump is on the shortest of time horizons, both chronologically and given his political, his political chances and the midterms. So he doesn't care about 2027, 2028, 2030, and what he does to the economy. He just wants free money. Fire it out. You know, a hundred dollar bills being fired out of a fire hose. Yeah, yeah, everybody spend it. Let's get, let's get the economy looking great, okay? Doesn't matter if after that's all over, you get the hangover of hyperinflation, cuz he'll be long gone by then. Every dictator or president that's gotten control of the Federal Reserve has wrecked the economy and created hyperinflation. And there are no examples of that not happening. That's why we don't let it happen. That's why even the Supreme Court has seen that the independence of the Federal Reserve is very important. That's why Lisa Cook is still sitting on the Federal Reserve and has not been fired. So Trump was like, hey, let's take advantage of the shutdown. Right. Let's cut off all their data from the Bureau of Labor Statistics, all the consumer data and the job data and the economy data. Yeah, no, because they have other sources now, as you heard from J. Pal. It's not great, but we're going to do our job. It's not great, but we'll call. But we have to do our job. Hopefully it's in the short term. It's not the gold standard of data that we can rely on or that the world relies on. So now the rest of the central bankers around the world are looking at Jay Powell like, boy, really, you're setting rates without any of the core government data. You just, it seems like you're setting it by anecdote, as that reporter asked. But this is again, the games that are going on. You know, when the cats away, the mice shall play. Donald Trump has decided during the shutdown he's just going to create more pain for the American consumer, more pain for the American voter, more pain for Americans and try to get away with it. There's no, you know, let's, let's fire more government employees and put them on the unemployment line and cut off all funding. Let's defund more the Department of Education. Let's cut off welfare payments, food stamp payments, snap payments, food payments, things that go against to prevent starvation and malnourishment. Let's save $8 billion. I got a ballroom to build. Everybody. I gotta. I have to go to Europe and go kiss the butt of the Japanese. Pardon the Japanese, because I wrecked everything in my tariffs. I gotta do all that and do a big show before next week's Supreme Court oral argument about tariffs. We'll continue to follow it all right here. You're on the Midas Touch Network. Take a minute, hit the free subscribe button, slide over to legal AF YouTube. We are, oh, we're so close to 900,000. We are so close to 900,000 or so subscribers on our way to a million. I can taste it. I think we're about 5,000 away. And it's not ego. It's that subscriber base matters on YouTube as to how big we are, how elite we're considered, the types of interviews we get, the content, the contributors that we can have join us. It's all tied to that number, that magic number. And we're trying to get to that million before the year is over. Come over to Legal. I have substack. People say, how do you, like, pay for the editors and the videos and, and the travel when you go interview people in Arizona. I'm going to Arizona in November to interview 11 attorneys general. How do you do that? Legal AF substack 7, $6.77 a month. You can help us stay on the air and protect our First Amendment rights and your own. So until my next report, I'm Michael Popak. Can't get your fill of Legal af? Me neither. That's why we formed the Legal AF substack. Every time we mention something in a hot take, whether it's a court filing or a oral argument, come over to the substack. You'll find the court filing and the oral argument there, including a daily roundup that I do called Wait for it Morning af. What else? All other contributors from Legal AO are there as well. We got some new reporting, we got interviews, we got ad free versions of the podcast and hot takes where Legal AF on Substack. Come over now to free subscribe.

[A]

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[D]

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[C]

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[D]

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[C]

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[D]

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[C]

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[D]

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[C]

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[B]

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[A]

Data 1H2025 visit t mobile.com AI agents are everywhere, automating tasks and making decisions at machine speed. But agents make m Just one rogue agent can do big damage before you even notice. Rubrik Agent Cloud is the only platform that helps you monitor agents, set guardrails and rewind mistakes so you can unleash agents, not risk. Accelerate your AI [e-mail] that's R U B R-I K.com AI agents are everywhere, automating tasks and making decisions at machine speed. But agents make mistakes. Just one rogue agent can do big damage before you even notice. Rubrik Agent Cloud is the only platform that helps you monitor agents, set guardrails, and rewind mistakes so you can unleash agents, not risk. Accelerate your AI [e-mail] that's R U B R I K dot com.