The Adam Mockler Show - WHOA: Fed Chair SLAMS TRUMP’S Major Economic Failure

Episode Date: April 16, 2025

Adam Mockler with MeidasTouch Network breaks down Fed Chair Jerome Powell’s devastating speech calling out Donald Trump’s tariffs as the cause of economic slowdown, inflation, and rising uncertainty. Join my Substack as a free or paid subscriber: https://www.adammockler.com/subscribe Become a member to support me! https://www.youtube.com/Adammockler/join https://patreon.com/adammockler Adam Mockler Socials: Subreddit: https://www.reddit.com/r/AdamMockler/ Discord: https://discord.gg/y9yzMU3Gff Instagram: https://www.instagram.com/adammockler/ Bluesky: https://bsky.app/profile/adammockler.bsky.social Twitter: https://x.com/adammocklerr/ TikTok: https://www.tiktok.com/Adammockler Contact me at: [e-mail] Adam Mockler - amock LLC Learn more about your ad choices. Visit megaphone.fm/adchoices

All right, breaking news. Fed Chair Jerome Powell just spent the vast majority of his speech at the Economic Club of Chicago pointing out how Trump's tariffs are directly contributing to our economy slowing down. Higher prices. We're ruining the progress that we made last year. And Jerome Powell is pretty blunt about it. Now, he doesn't mention Trump by name. It's not his job to be political. He is nonpartisan and only talks about politics as far as it relates to the economy. But he does talk about the tariffs. He is clearly condemning the current policy of the administration, and then he begins to put his foot down and say that he will never be influenced by any politician in any way, which relates back to them

being rather nonpartisan. He says that Trump won't be able to influence his decisions. No person will be able to influence his decisions. He makes decisions based on what's the best for the economy. So let's jump in with this clip of Jerome Powell detailing how all of the data we have so far suggests that growth is slowing in Q1 due to Trump's policies. Take a listen. Initial reading on first quarter GDP in a couple of weeks.

The data we have enhanced so far suggests that growth has slowed in the first quarter of this year from last year's solid pace. Please listen to the exact wording he uses there. He even says it's slowed from last year's solid pace. He's even comparing it to last year and saying we're slowing down. Enhanced so far suggests that growth has slowed in the first place. quarter of this year from last year's solid pace. Despite strong motor vehicle sales, overall consumer spending appears to have grown modestly. In addition, strong imports during

the first quarter reflecting attempts by businesses to get ahead of potential tariffs are expected to weigh on GDP growth. Again, he mentions the tariffs directly weighing on GDP growth, and that's only the start. Now, let me remind you, China's Q1 growth came out recently, and it's actually quite high, so it seems like the trade war is currently going well for America. We have a president who's blinked in almost every single way compared to Xi Jinping, who I don't have that much respect for, but he at least has a steady hand. Xi Jinping has more of a steady hand, in my opinion. Powell then says, the level of tariff increases announced so far is significantly larger than anticipated,

and as he was talking, the stock market dropped. You'll understand why. The level of tariff increases announced so far is significantly larger than anticipated. and the same is likely to be true of the economic effects, which will include higher inflation and slower growth. Let me remind you, this is not a political speech, or it's not a partisan speech by some liberal Democrat. I know Trump supporters watch these videos.

This is the Fed Chair Jerome Powell, who was appointed by Trump in his first term, saying in this clip, tariffs are highly likely to generate at least a temporary rise in inflation. Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent. Avoiding that outcome will depend on the size of the effects, on how long it takes for them to pass through fully to prices, and ultimately on keeping longer-term inflation expectations

well anchored. Now, the scary thing is, the president does have the chance to appoint a new Fed chair in the next year or so, so Trump could replace Jerome Powell with more of a loyalist, but right now he's doing a great job of holding the line. Let me play this clip of him saying that he will never, no one at the Fed will ever be influenced by any political pressure. And of course, he's directly responding to Donald Trump here because as Trump nukes the economy that was handed to him by Biden on a silver platter, he now was also trying to apply pressure on Jerome Powell to follow Trump's instincts

regarding interest rates and everything else. That's why. ...that we're monitoring carefully. Generally speaking, Fed independence is, is very widely understood and supported in Washington in Congress where it really matters. And, you know, the point is we can make our decisions, and we will only make our decisions based on our best thinking, based on our best analysis of the data about what is the way to achieve our dual mandate goals as we can to best serve the American people.

That's the only thing we're ever going to do. We're never going to be influenced by any political pressure. People can say whatever they want. That's fine. That's not a problem, but we will do what we do strictly without consideration of political or any other extraneous factors. Amazingly well said by Jerome Powell, I have another clip of him putting his foot down. But really quickly, let's go back to the tariffs because here's him comparing this to the Smoot-Hawley Act. And he said that they were not this large and they were 95 years ago.

Let me point out the wording he used earlier. He said that level of tariff increases announced so far will have. massive ripples. Essentially, he said that, not verbatim, but he's saying that even if Trump today were to remove every single tariff, there would still be ripples through the economy due to the size of these. Listen to this clip. So let me just agree that we're, what comes back very strongly, and you'll, you'll, everyone will understand this. These are very fundamental changes in, you know, long held in some cases, policies in the United States. And there's not any real experience. I mean,

the Smoot-Hawley tariffs were actually not this large, and they were 95 years ago. So there isn't a modern experience of how to think about this. And businesses and households are saying in surveys that they are experiencing incredibly high uncertainty. There's a lot of research, some of it from the Fed, showing that that does lead to businesses and households stepping back from decisions, which of course makes common sense. And, you know, you hope that that's something that you go through a phase and then you, then you know what the things become more certain. Lord have mercy.

As someone in the comment says, Paul just described a scenario of chaotic uncertainty coupled with inflation that will cause a recession at minimum in a possible depression, all self-inflicted by the current administration. And, and therefore, you know, people can resume normally. activities given their understanding of what is the new normal. Your question really is, what if the uncertainty remains high? I think that's a difficult environment. I think people's expected rates of return would have to be higher.

I think people would be, that would weigh on, to me, investment just in general. If the United States were to become jurisdiction where risks are just structurally higher going forward, that would make us less attractive as a jurisdiction. I don't, we don't know that at this point, but I think that would be the effect. It will. And I read an interesting theory that what these tariffs will do before we move on in this next clip is create two different trade zones. So the average tariff across the globe right now is just 5% if you want to export something

or import something. It's 5%. But if you're trading with the United States, the average tariff is now closer to 10% to 15% due to Trump's blanket tariffs and massive Chinese tariffs. So, if any other country is looking to trade, they see two zones, one with 5% tariffs, roughly, on average, and one with double those tariffs on every single good. That's double. 10% is doubling that five. So now there are two different trade zones, and we're not the one you want to be in.

Here's another clip of Powell saying, our independence is a matter of law. Nobody, no president, no person can make the decision to strip away our independence, and we will not cave. You told us about speaking with business people last night and getting a sense of what was going on in the Midwest. Let me turn to Fed independence. You've reiterated that you intend to stay in office until the end of your term, and that certainly reassured many in financial markets. What are the levers the government or the legislature have to pressure the Fed,

and should one worry about threats to the Fed's independence once you're gone? So our independence is a matter of law. Congress has, in our statute, we're not removable except for cause. We serve very long terms, seemingly endless terms. So we're protected in the law. So, you know, Congress could change that law. But I don't think there's any danger of that. Fed independence has pretty broad support.

Yep, except for when Trump picks a stooge to nominate across. both political parties and in both sides of the hill. So I think that's not a problem. There's a Supreme Court case. People will have read probably in today's journal at which the Supreme Court may decide whether independent agencies generally, whether they're authorizing laws,

can contain a provision that prevents the president from firing members of a commission other than for cause. So he's going into the details about certain cases that will add more checks and balances. between the president being able to fire people and hire people at will based on loyalty rather than merits. And that's a good thing.

It's a good thing that we're currently drawing these lines, and we'll leave it at that. Jerome Powell called out the tariffs in Chicago in front of some of the biggest economic names in the country, and that had stock market implications. We'll see what happens from here. And remember, don't be tricked. It's really easy to think that, oh, Trump removed his massive Liberation Day tariffs. Basically, the nuclear day that was coming up is now gone. but there are still massive tariffs being placed in any other country.

Tariffs bigger than the Smoot-Hawley Act, which caused a depression roughly 100 years ago. I'm going to leave it at that. Drop a like, subscribe. I'll see you all in the next video, and peace on.