Legal AF by MeidasTouch - Furious Fed Chair Drops Truth Bomb Trump Feared Most
Episode Date: September 24, 2025Less than a week after the Fed marginally cut interest rates, Chairman of the Fed Board Jerome Powell remarked that rising inflation and slow hiring pose a “challenging situation” going forward. M...ichael Popok of @LEGALAFMTN reports. MUDWTR: Start your new morning ritual & get up to 43% OFF your @MUDWTR by going to https://mudwtr.com/LEGALAF #mudwtrpod Visit https://meidasplus.com for more! Remember to subscribe to ALL the MeidasTouch Network Podcasts: MeidasTouch: https://www.meidastouch.com/tag/meidastouch-podcast Legal AF: https://www.meidastouch.com/tag/legal-af MissTrial: https://meidasnews.com/tag/miss-trial The PoliticsGirl Podcast: https://www.meidastouch.com/tag/the-politicsgirl-podcast The Influence Continuum: https://www.meidastouch.com/tag/the-influence-continuum-with-dr-steven-hassan Mea Culpa with Michael Cohen: https://www.meidastouch.com/tag/mea-culpa-with-michael-cohen The Weekend Show: https://www.meidastouch.com/tag/the-weekend-show Burn the Boats: https://www.meidastouch.com/tag/burn-the-boats Majority 54: https://www.meidastouch.com/tag/majority-54 Political Beatdown: https://www.meidastouch.com/tag/political-beatdown On Democracy with FP Wellman: https://www.meidastouch.com/tag/on-democracy-with-fpwellman Uncovered: https://www.meidastouch.com/tag/maga-uncovered Coalition of the Sane: https://meidasnews.com/tag/coalition-of-the-sane Learn more about your ad choices. Visit megaphone.fm/adchoices
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Powell in public comments today. His first speech, since the Federal Reserve had a lower rates to try to
bail out Donald Trump, in those public statements, he threw up the caution sign, saying in effect
that there are mixed messages in the economy. We have inflation inching up. We have jobs dropping
off the shelf. And as a result, the Federal Reserve is going to have to be cautious with any future
rate cuts. And the markets responded. This is how Federal Reserve,
chair people have to communicate with the White House. They show up in places like Rhode Island
at the Chamber of Commerce and they give a speech. This one was introduced by Senator Jack Reed
of Rhode Island. And listen, Jay Powell knows how Jack Reed is going to introduce them.
So I'm going to show you some clips today that was a harsh criticism in Jay Powell's own way
of the Trump administration and the markets reacting.
It kicks off first with Jack Reed, Senator Jack Reed introducing him, and listen to these introductory
remarks and harsh criticisms of Donald Trump and his economy, which by extension Jay Powell implicitly
adopts because he's following those introductory remarks with his own speech and interview.
Let's play Senator Jack Reed first.
Chair Powell deserves credit for navigating those choppy waters.
Nevertheless, average Americans are still facing significant economic challenges due to the chaotic policy agenda of the current administration.
Tarras, health care cuts, a massive debt increase, and interventions in the operations of major corporations and universities have all proved disruptive and costly.
Real wages for most American workers remain stagnant.
We still have not fully tamed inflation.
Roughly 36 million Americans are experienced in poverty,
and housing is too expensive and in too short a supply everywhere,
but particularly here.
The policy chaos is extended into a direct assault on the Fed's independence
and personal tax by the President against members of the Fed.
But Chair Powell has met these challenges with equanimity and professionalism.
He understands that a strong and independent central bank can contribute to sound economic policy in this nation.
He understands the impact that monetary policy has on communities and families and businesses.
He has somehow managed to stay laser focused on achieving the Fed's dual mandate.
to achieve maximum employment and stable prices.
Okay.
Now, from there, what impacted the markets the most today
is that they were hoping for a series of interest rate cuts by the Federal Reserve.
I mean, the blunt instrument of the Federal Reserve to try to positively impact the economy,
they only have really one.
It's interest rate adjustment.
They lower the overnight interbank rate between banks to somewhere between 4.5%,
And then it has a cascading impact on all interest rates that are charged to consumers and businesses.
For loans, for credit cards, for mortgages, for student debt, you know, for home loans, you name it, all starts with the Fed's rate.
Now, we just had on Wednesday the monthly or quarterly meeting of the Federal Reserve Open Markets Committee.
There's 12 members of it, but it's led by Jay Powell of the Federal Reserve.
And they voted to lower the rate a quarter of a point, except for Stephen Mirren, who just got put on there by Trump and still works in the White House, who had access to all the White House data, all the White House economic data. He pushed for a half a point cut. But today, during this Rhode Island meeting, Jay Powell pumped the brakes on any more rate cuts. Here's a clip of him talking about that there is no risk-free environment. Let's play the clip.
Turning to monetary policy, near-term risks to inflation are tilted to the upside, and risks to employment are tilted to the downside, a challenging situation.
Two-sided risks mean that there is no risk-free path.
If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2% inflation.
If we maintain restrictive policy too long, the labor market could soften unnecessary.
When our goals are in tension like this, our framework has long called for us to balance both sides of our dual mandate.
The increased downside risks to employment have shifted the balance of risks to achieving our goals.
We therefore judged it appropriate at our last meeting to take another step toward a more neutral policy stance,
lowering the target range for the federal funds rate by 25 basis points to 4 to 4.4%.
quarter percent. This policy stance, which I personally see as still modestly restrictive,
leaves us well positioned to respond to potential economic developments.
Now, what is he talking about? That the twin mandates that have been given to the Federal
Reserve by Congress, really just two. Isn't it a nice to have a job? You only have to do two things.
Two things. Reasonably not complicated either. You need to keep inflation low. At the same time,
you need to keep job creation high.
But those two things are often intention.
The more full employment we have and higher wages we have,
the more higher inflation we have.
So it's always a delicate balance of oil and gas, if you will,
for the engine of the American economy.
Here's how Jay Powell, during his Rhode Island interview today,
how he put the downward pressures on Trump's economy.
Recent data show that the pace of economic growth has moderated.
The unemployment rate is low,
but has edged up, job gains have slowed, and the downside risks to employment have risen.
At the same time, inflation has risen recently and remains somewhat elevated.
In recent months, it has become clear that the balance of risks has shifted,
prompting us to move our policy stance closer to neutral at our FOMC meeting last week.
GDP rose at a pace of about 1.5% in the first half of this year, down from 2.5% last year.
the moderation in growth largely reflects a slow down in consumer spending.
Activity in the housing sector remains weak.
Goods prices after falling last year are driving to pick up inflation.
Incoming data and surveys suggest that those price increases largely reflect higher tariffs
rather than broader price pressures.
Disinflation for services continues, including for housing services.
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Then you had the discussion over the tariffs
and what the tariff impact would be.
And that one was relatively straightforward.
Tariffs impact jobs because in this environment,
in this economy, as we're waiting to see
that large tariff numbers get passed through to consumers, because that's all tariffs are.
Tariffs are the biggest tax increase on the American consumer and the American voter in history.
You know, when you put a 15 or 50% tax on another nation and its goods, what do you think eats that?
In the beginning, there's some burden sharing.
Maybe some of the importers will eat some of the costs, some of the exporters, some of the retailers, some of the supply chain until it gets the consumer.
so the prices won't go up much, but those days will be over.
J.P. Morgan Chase, their analyst, believes that 70% or more of the tariffs are going to get
passed and paid by the American consumer. And that concerns J. Pell. Here's a clip.
A lot of what we're doing with our time is trying to understand the current position of the economy,
what's actually going on in the economy today. Pardon me. So part of that is hiring rate has really dropped
job creation has dropped very sharply.
So does that, what are the factors there?
So I mentioned earlier, I think part of it just is there's a lot of uncertainty about the
direction of public policy.
And so companies are holding off.
They're not hiring.
And when you, when you don't hire through attrition, your labor force shrinks and you
save money that way.
And then you had sort of his final nail in the coffin of the Trump economy.
And you can see how, you know, very genteel and very, you know, his personality is one that provides a fair amount of gravitas and stability.
He's low key.
He's not reactionary.
He's not a bomb thrower.
That's what we need as our central banker.
There's a reason the Jay Powell's of the world, the Mark Carney's of Canada, who's now the prime minister, but had been the central
banker. They all sort of fit the same, you know, they're cut from the same cloth. But then he was asked
particularly about why jobs aren't being made, why what's happening with immigration. And how is that
impacting the job market? Remember, twin goals of the Fed keep inflation down to 2%. So far,
it's moving up to 4%. And keep job people employed. Let's hear his clip about
that, which I consider to be the final nail in the coffin.
Well, if you could elaborate, what are some of the factors that are leading to depressed
demand for labor? So depressed demand for labor, you know, based on surveys and talking to people
who are doing hiring, a big chunk of it is that they're just unsure about what to do.
Businesses, and I'd like to love to talk to people after this, you know, businesses don't,
They don't want to do a lot of hiring.
They may be postponing major cap X, major initiatives, major acquisitions.
And, you know, maybe they'll replace workers who retire, but they're not looking to grow.
This isn't every company and every part of any, every company in the world.
It's just an effect kind of at the margin.
That's got to be part of it.
I think that's the demand side.
The supply side, of course, has a lot to do with immigration policy.
So immigration was at a very high level for two or three.
three years before this year. And now immigration has really gone close to zero. And immigration is
not really contributing to the labor force, to labor force growth now, whereas it's been most of
what the labor force growth was. And now so you, so at the same time, you've got declining
demand and also declining, you know, declining supply of workers, of new workers. Now, this is how
the Federal Reserve communicates. Jay Powell,
a speech. He may give a speech in Jackson Hole, Wyoming a month or so ago with all of the
central bankers from around the world. He might go to the Rhode Island Chamber of Commerce
and give a speech that everyone on Wall Street and in financial services is, is, sits at
rapt attention to get the results. He might, or others, there, you know, let's be frank,
there's 12 regional bank presidents for the Federal Reserve. There's seven board of governors.
And on the Federal Open Markets Committee, there's 12 of them on there, seven of the Board of Governors,
five that come off the rotating group of central bankers for the different Federal Reserve regional banks.
So they each take a turn, creating a gang or committee of 12.
And they go out and give speeches.
They're not gagged.
And everybody's sitting there with their, especially when it's Jay Powell, you know, what did he just say?
Look, I'm doing a hot take about it.
And so that's the rationale.
That's how they speak.
Now, the thing that was the scariest, which he's too polite to mention, is that Stephen
Mirren, who just got appointed by Donald Trump, to be the replacement for a person
named Coogler, who Biden had appointed who stepped down, Stephen Mirren didn't really
have access to the Federal Reserve, the Fed's economic data.
He had access only to where he last worked, where he currently works, which is for the White House as the chairman of the Council of Economic Advisors.
His data was so scary to him that whereas 11 people raised their hand out of 12 and said, let's do a quarter rate cut and get it down to about 4%.
Again, you're going to pay, we're going to pay.
many points above that in interest rates depending upon your credit and collateral that's uh you know
that's involved with the with the loan or the credit extension he only had the data for the white
house he raised this hand and said we need a big we need a bigger boat we need a half a point cut
but the other 11 we're like what do you know that i don't know what do you know about the trump
white house that we don't know that was that's sort of a scary moment when stephen miren sort of
you know, everybody steps forward and he steps back.
Now, the market is already hoping that had been hoping since Wednesday last week
that there was going to be another couple of cuts between now and the end of the year
to maybe even push rates, the intrepank overnight rate set by the Federal Reserve below four.
And they're already sort of pricing in that.
That's why they freaked out when Jay Powell said today in his own inimitable fashion,
there's no risk-free environment.
We don't know about rate cuts just yet.
So we're going to continue to follow it.
It's a little bit like the Oracle of Delphi,
a little bit like,
what did he just say?
Let me translate that for you.
But that's what we have to do,
and that's what we do here on the Midas Touch Network
and on Legal AF.
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