What you're not hearing about Trump versus Powell, and this week's FOMC meeting

Monday, July 28, 2025
Donald L. Luskin

Powell lowered himself by fact-checking Trump, and looking like a clown in a hard-hat.

Update to Strategic View

Federal Reserve

The photo-op at the Fed’s headquarters under renovation gave strong visualizations to underscore Powell’s cost-overrun scandal. Facing a Trump gotcha, Powell fact-checked Trump’s claim the Fed is spending $3.1 billion, but implicitly admitted it was spending $2.7 billion, when all prior reporting had said only $2.5 billion – already an astonishing spend. Powell lowered himself by being disrespectful, which we already expect from Trump. Most important, Trump looked like a builder in his hard-hat, but Powell looked like Michael Dukakis playing soldier in an army tank. Powell will face at least one dissent at this week’s FOMC, perhaps more. He has lost his president and his committee, and with inflation quiescent he has lost the economics. The FOMC will soften its hawkish message, and Powell will have no choice but to give it voice. Market expectations will build back two rate cuts this year.

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