Post Reports Podcast Summary

Episode Title: Trump's Grudge Against the Fed's Jerome Powell
Host: Colby Ikowicz
Published By: The Washington Post
Release Date: July 16, 2025

Introduction

In this episode of Post Reports, Colby Ikowicz delves into the escalating tension between former President Donald Trump and Federal Reserve Chairman Jerome Powell. Alongside, the episode explores emerging concerns about the reliability of the United States' economic data.

Trump's Escalating Pressure on Jerome Powell

The episode opens with Colby Ikowicz highlighting Trump's unprecedented consideration of removing Jerome Powell from his position as Fed Chair.

Colby Ikowicz [00:00]: "President Donald Trump is seriously weighing something that no president has ever done before. He wants to fire the Federal Reserve chairman, Jerome Powell."

Andrew Ackerman, an economics reporter for The Washington Post, provides context on the Federal Reserve's independence:

Andrew Ackerman [00:53]: "It's important because the Fed was set up to be independent of the White House and from lawmakers. It's designed to be able to make decisions on its own, based on economic data and not by politicians who are always going to want lower interest rates to juice the economy."

Trump has been vocally demanding lower interest rates, pushing the Fed to reduce rates by three percentage points—a move typically reserved for economic emergencies.

Donald Trump [03:04]: "But we have a guy that's just a stubborn mule and a stupid person that is making a big mistake. He's making a mistake and it lasts for years."

Ackerman explains the Fed's precarious position amidst Trump's pressure:

Andrew Ackerman [04:05]: "It's a very difficult situation for the Fed because you want the markets to take you credibly. If inflation is there, you're going to fight it. You're going to raise rates or you're going to keep rates steady. You're not going to lower them."

Legal and Institutional Barriers to Firing Powell

The discussion shifts to the legality of Trump's attempts to remove Powell. Ackerman clarifies that the Fed Chair cannot be dismissed over policy disagreements alone.

Andrew Ackerman [05:33]: "Powell and the Fed say he cannot. The Supreme Court says he cannot over a policy dispute, that it has to be a for cause firing, meaning some form of malfeasance or inappropriate conduct."

Despite Trump’s aggressive rhetoric, Powell remains steadfast:

Andrew Ackerman [05:22]: "Powell said repeatedly, stridently, that he's not. There's nothing. There's no reason why he will leave early."

However, Trump continues to lay the groundwork for possible removal by questioning Powell's management of the Fed's $2.5 billion headquarters renovation project.

Andrew Ackerman [08:06]: "But then he also suggested that Powell might have to leave if he's found to be, might have to leave if he's found to be involved with some kind of fraud,..."

Potential Successors to Powell

Should Trump succeed in replacing Powell, several candidates are under consideration:

1. Kevin Hassett - National Economic Council Director
2. Scott Bessant - Treasury Secretary
3. Kevin Warsh - Former Fed Governor
4. Christopher Waller - Current Fed Governor

Ackerman anticipates that Trump will choose someone more amenable to his economic preferences, particularly regarding interest rates.

Donald Trump [10:28]: "If I think somebody's going to keep the rates where they are or whatever, I'm not going to put them in. I'm going to put somebody that wants to cut rates. There are a lot of them out there."

Concerns Over the Reliability of Economic Data

Transitioning from Fed tensions, the episode addresses growing worries about the integrity of US economic data, primarily sourced from the Bureau of Labor Statistics (BLS). Ackerman outlines the complexity and recent challenges faced by the BLS:

Andrew Ackerman [13:26]: "The concerns revolve largely around the Bureau of Labor Statistics, this agency that's part of the Labor Department, and they mine the economy for data on inflation, on the job situation, the labor market, things like that."

Erica Groschen, a former BLS commissioner, details the meticulous process of data collection:

Erica Groschen [14:33]: "We will randomly choose some stores, we will talk to the people in the stores and figure out what would be a representative can of tuna fish from that store... we're going to go back on a regular basis and check what's happening to those cans."

Powell has expressed concerns about potential deterioration in data quality due to underfunding and staff cuts:

Andrew Ackerman [17:33]: "Powell said that he was worried we can still do our job. I would not want anyone to think that the data have deteriorated to a point where it's difficult for us to understand the economy as well as we can understand it."

Recent job reports have shown significant revisions, casting doubt on the accuracy of economic indicators:

Andrew Ackerman [18:23]: "We added 228,000 jobs in March and that was 100,000 jobs above economists estimates... but the last two months were revised down by 48,000."

Implications for the U.S. Economy

The interplay between political pressure on the Federal Reserve and unreliable economic data poses significant risks to the U.S. economy. Ackerman emphasizes the uncertainty surrounding future Federal Reserve policies and the potential impact on economic stability.

Andrew Ackerman [21:35]: "You have a president who's acting like other presidents and pushing for lower rates... It remains to be seen if... he’s going to nominate somebody as early as this month or at least name them to replace Jay Powell."

Conclusion

Colby Ikowicz wraps up the episode by highlighting the intertwined challenges of maintaining Federal Reserve independence amidst political interference and ensuring the reliability of critical economic data. These factors collectively contribute to uncertainties about the future trajectory of the U.S. economy.

This summary captures the core discussions and insights from the episode, providing a comprehensive overview for those who haven’t listened.