Jay Powell: Alien Enemy
https://trendmacro.com/system/files/reports/20250421trendmacroluskin-f0.pdf
Monday, April 21, 2025
Trump would have to massacre the whole Board and replace Powell with Stephen Miran.
US Macro
Federal Reserve
The Supreme Court order preventing deportations under the Alien Enemies Act is a template for overturning Trump’s use of the International Emergency Economic Powers Act to impose tariffs. Powell has drawn new criticism for the same old statements about the effect of tariffs on inflation and growth. Said to be hawkish, futures-based rate expectations have only gotten more dovish. And the suspension of QT means easing has already begun. There is no gain for Trump to fire Powell, and we don't think he will. He would have to fire the entire Board of Governors. Warsh, a fundamentally hawkish conservative, would be no improvement for Trump. His ideal pick would be Miran with his radical trade, debt and currency agenda, making him the fourth of the last five Fed chairs to have chaired the CEA first. Powell is wrong to assume tariffs will be inflationary (they weren’t last time). He is wrong to emphasize inflation expectations that are highly biased and have no predictive record.