Here is my understanding of what Trump’s administration thinks about the Fed, the Economy, and the Market:
- Jerome Powell is incompetent;
- The U.S. economy is like a huge pile of oily rags that is just needing something to light it in order to really catch fire, and that “something” is lower interest rates;
- Powell should be lowering rates massively, but he’s refusing to do so for political reasons;
- Once Trump installs one of his sycophantic cronies to head the Fed, the slashing of rates can begin;
- At which time the economy will be fabulous and the stock market will rush into the stratosphere since, you know, it’s like totally cheap and massively undervalued right now.
Every single one of these things is dead wrong, yet people are too stupid or too politically loyal to dare think or say so. Probably stupid, for the most part. In any case, time will prove this entire thesis to be fantastically incorrect, and I will endlessly refer back to this very post.
What Trump has charged the inhabitant of the Pink Palace, Treasury Secretary Bessent, with doing is do find some brown-nosed lapdog to install at the Fed and do whatever Trump tells him to do. The top candidate is Kevin Hassett, who is presently serving as the rah-rah cheerleader for Trump and the head of his council of economic advisors. Here he is, in all his yes-man glory:
He’s been doing the rah-rah stuff for quite some time. Indeed, in October 1999 – – let me emphasize that date again, October 1999 – – he co-authored this risible tome:
As a person who likes charts, allow me to share what the Dow did in the years after this book was published. Spoiler Alert: it did not head to 36,000 for another TWENTY-TWO YEARS.
So, with that amazing track record under his belt, he’s perfectly qualified to take the reins at the Fed and put a final end to their political independence.
It’s probably for the best. There’s no better way to absolutely crater the economy and the stock market than with this kind of nonsense, so I should probably be celebrating this inevitable outcome. One can only imagine the desperate measures they are doing to take in 2026 as the wheels are coming off, but one thing I can safely predict is that, in yet another airheaded move that will be celebrated only because most of the public has a double-digit IQ, short selling will be banned.
Suffice it to say that 2026 is going to be quite a circus, and I intend to keep a front row seat.
