U.S. Federal Reserve Chair Jerome Powell testifies before a House Financial Services Committee hearing on "The Semiannual Monetary Policy Report to the Congress," on Capitol Hill in Washington, D.C., U.S., June 24, 2025. REUTERS/Kevin Lamarque
Federal Reserve Chairman Jerome Powell testified on Tuesday that, were it not for President Donald Trump's tariffs, they would have felt comfortable dropping interest rates.
Speaking to the House Financial Services Committee, Powell said, "If you just look at the basic data and don't look at the forecast, you would say that we would've continued cutting. The difference, of course, is, at this time, all forecasters are expecting, pretty soon, that some significant inflation will show up from tariffs. And we can't just ignore that."
Economics and public policy professor Justin Wolfers and former conservative talk radio host Charlie Sykes discussed the successes of the Fed in guiding the United States through the economic impact of the pandemic without a recession. However, it was Sykes who speculated that Trump is looking to use Powell for something more sinister.
MSNBC's Nicolle Wallace asked Sykes about Trump's "obsession" with Powell and his ongoing desperation to fire Powell until he sees the stock market "recoil."
"There's two things that are going on here," Sykes said. "Number one, Trump wants to bully the Fed and the bullying is not working. Powell is not caving in as so many other institutions have. But beyond the bullying, I think it's important to understand what Trump is doing here. Trump is obviously very, very anxious about what's going to happen with the economy."
He noted that Wolfers and other economists pointing out the massive impact Trump's tariffs have had on the economy sent the president scrambling.
"Donald Trump wants someone else to blame. This is, I think, an underappreciated point. He is setting Jerome Powell up to be the scapegoat so that if things go south, Trump can say, It wasn't me. The buck does not stop with me or my policies. The blame should go to the Fed," said Sykes. "And so this is one of the reasons why he is obsessively calling out Jerome Powell, because he wants somebody that he can point the finger at if, as obviously he worries, the economy that he inherited actually goes into the tank."
See the clip below or at the link here.