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Iran certainly is not a forever war as President Trump has said many times. Indeed, Mr. Trump is “ending” Iran’s forever war against the United States. Yet now it looks like the Fed chairman, Jay Powell, wants to be the Fed’s first forever board member. Telling a press conference that he will remain on the Federal Reserve’s board of governors until the investigation is “well and truly over.” Whatever that means.
This is unwelcome news to stock markets, as the Dow fell by more than 700 points, to a new 2026 low. It fell about 300 points after Mr. Powell made his forever board member comment. All the indexes were down today. Bond rates went up. As did oil prices.
Actually, the Fed’s dot plot of economic projections suggested only one projected rate cut this year instead of three before the war began. They also suggested higher inflation and a slight rise in growth.
What you really want is for the Fed to just keep its powder dry, as the Iran war winds down and oil prices move back to pre-war normalcy. Yet it seems like the Fed is already signaling a higher interest rate policy, which would do some damage to the American economy.
That’s one reason why it’s crucial that Mr. Trump’s nominee for Fed chairman, Kevin Warsh, be liberated as rapidly as possible to take over the central bank’s helm and get rid of the Fed models that say stronger growth leads to higher inflation. I’m calling it #FreeKevin.
And have someone who understands the economic growth benefits of lower tax rates, deregulation, and drill baby drill, which is a prosperity prescription that would raise growth and reduce inflation. And protect King Dollar.
Yet in order to liberate Mr. Warsh, it seems like the Justice Department has got to settle its disagreement with the Federal Reserve. Otherwise, Mr. Warsh will never get through the Senate Banking Committee, even though they love him, and Mr. Powell will stay at the Fed forever.
He might even be somehow voted to stay on as chairman by the Fed’s policy-setting body, the Open Market Committee, which really always leans against Mr. Trump. Or Steven Miran would have to give up his board seat to make room for Mr. Warsh’s board appointment, but not necessarily as the chairman. If you think this is a confusing and bizarre scenario, you would be right.
I believe that post-war American growth potential is around 5 percent. And as energy prices normalize, the inflation rate will drop below 2 percent. By the way, on inflation, a measure of the money supply, M2, is growing at 3.5 percent, not President Biden’s 30 percent.
Government spending has slowed down. And the dollar’s been rising. Those are all counter-inflationary moves. The Jay Powell Fed only sees a measly 2 percent economic growth. That’s what their models tell, but it’s garbage in, garbage out. Please will someone liberate Mr. Kevin Warsh? #FreeKevin.
