Powell has no problem, Trump has no problem—but Powell + Trump = persistently high inflation Have you ever seen negative times negative equals positive, or positive times positive equals negative? ┈➤ Powell’s Achievements ╰✦ Buying time to create space—soft landing largely achieved In response to the COVID-19 outbreak, Powell swiftly cut interest rates and implemented unlimited QE,配合ing with the U.S. Treasury’s direct cash payments to citizens—allowing many Americans to survive without working during the pandemic. Under this massive monetary easing, the recession that should have occurred during the pandemic never materialized. But after easing comes tightening. As monetary policy tightened, the U.S. economy once again faced the risk of recession. Yet this sequence—expanding first, then contracting—effectively delayed the recession. By 2024–2025, the U.S. had largely moved past the pandemic’s direct impact; any recession now would be more manageable. In Q4 2024 and Q4 2025, facing a weakening labor market, Powell cut rates three times each, keeping the U.S. economy in a state that appeared to be on the brink of recession—but never quite crossed the threshold. This is precisely the ideal scenario of a soft landing. ╰✦ Reduced recession expectations, stabilized economy and U.S. equities Typically, the start of a rate-cutting cycle signals a recession—why cut rates if there’s no recession? But Powell’s intermittent rate cuts in 2024 and 2025—three cuts followed by a nine-month pause—made it hard to label the U.S. as in recession, because a true recession would require far more than three cuts. Thus, Powell’s approach dampened recession fears. Market participants—including consumers, businesses, and even U.S. stock markets—did not panic over recession risks, helping stabilize both the economy and equities. This is why we saw a sluggish labor market without any explosive downturn—a hallmark of a soft landing. ┈➤ Why Powell Delayed Rate Cuts—There Were Reasons Yet during the 2020–2021 easing phase, CPI surged as high as 7%. By mid-2021, and certainly by Q4, conditions were already ripe for rate hikes. As I previously analyzed in my article “Three Criticisms of Powell,” multiple angles supported this view. Only recently, with the Fed chair transition, did I fully understand why Powell delayed hiking rates. Powell became Fed Chair in February 2018—but why does his term end in May 2026? Yes, because something happened before his 2022 reappointment. ╰✦ The Fed Scandal From late 2021 to early 2022, the Fed was rocked by scandal. During its massive 2020 easing, several Fed officials were exposed for trading stocks based on insider knowledge of Fed policy to profit personally. Powell himself was investigated for selling some stocks in 2020—but cleared of wrongdoing. Other officials under investigation were also cleared, though some resigned. Since Fed rate decisions are made by voting officials, this scandal forced a delay in rate hikes. ╰✦ Government Pressure Simultaneous with massive easing, U.S. debt ballooned dramatically. Raising rates would have increased Treasury financing costs, placing enormous fiscal pressure on the Department of the Treasury—and potentially increasing political resistance Powell faced during Senate confirmation votes. Thus, Powell had to proceed with extreme caution on rate hikes. ╰✦ Partisan Politics Powell was appointed by Trump—but President Biden is a Democrat. Therefore, from late 2021 to early 2022, there was uncertainty over whether Biden would renominate Powell. Powell’s decisions had to be cautious as a result. Logically, if Trump had won re-election, Powell would have faced none of this pressure—and perhaps even avoided the scandal altogether… you get the picture. But because Trump—a uniquely unconventional president—lost re-election, Powell endured these pressures, which may have contributed to the delayed rate hikes. ┈➤ Final Thoughts If Trump had taken office in 2025 with CPI at 2%, his tariff policies likely wouldn’t have pushed inflation up significantly. If the current president weren’t Trump, under Powell’s policy path, CPI would likely have already returned to around 2%. But there are no “what ifs.” They met anyway. Trump’s tariffs or sanctions against Venezuela and Iran are aimed at strengthening America and the dollar—from America’s perspective, he may be justified. Powell’s strategy of first easing, then tightening, followed by intermittent cuts delayed pandemic-induced recession and dampened recession expectations—successfully achieving a soft landing and stabilizing both the economy and U.S. equities. He has no fault either. The problem lies in their combination. On one hand, Trump’s loss of re-election created difficulties for Powell’s reappointment and delayed rate hikes: Powell had a three-month gap before his reappointment and was confirmed in May instead of February; this contributed to delayed hikes. On the other hand, Powell originally planned a cycle of easing → hiking → easing again to gradually bring CPI down—but Trump’s policies disrupted the final phase of that plan. So perhaps this pair—loving yet at odds—is simply fated to clash… Today marks Powell’s final day as Fed Chair. Reviewing his policies and actions, his achievements are remarkable—and his delayed hikes had legitimate reasons, partly indirectly caused by Trump. Thinking about it all… I’m unexpectedly emotional… reluctant to let him go… but I still hope he leaves completely—no lingering as a Fed governor.