Fed Chair Says Trump Screwed Himself on Demand for Low Interest Rates

Donald Trump’s wishy-washy tariffs have been good for one thing: keeping Federal Reserve interest rates high, according to the central bank’s Chair Jerome Powell.

Speaking at a European Central Bank forum in Portugal Tuesday, Powell said that the Federal Reserve probably would have brought down rates already if it hadn’t been for the president’s “Liberation Day” announcement.

“In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs,” Powell said.

Last month, Powell announced that the central bank would maintain its key borrowing rate—between 4.25 percent and 4.5 percent—and wait to see the residual impacts of America’s new tariff plan before reducing interest. That’s because companies had already decided to increase product prices through the remainder of the year in reaction to hampered global supply chains, according to Powell.

“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell said at the time.

The White House has not taken the news well. Last week, Trump derided the chairman as “terrible” and a “very average mentally person.”

“I’d say low in terms of what he does. Low IQ for what he does,” Trump said during a press conference at the NATO summit in The Hague.

Powell’s term atop the Federal Reserve expires May 2026, while his term as a Fed board member ends on January 31, 2028. And the president is already dreaming of the day, advertising to reporters that he has three or four replacements in mind for Powell, whom Trump appointed in 2018.

Trump threw even more pressure on America’s financial backbone Monday, when he wrote Powell a handwritten letter claiming that the chairman had cost America “a fortune.” The letter, held up by press secretary Karoline Leavitt in a press briefing, demanded that Powell cut rates “by a lot.”

In a social media post later that day, Trump also went after the Federal Reserve board, accusing them of standing by while Powell does his job balancing the American dollar in light of Trump’s trade antics.

“If they were doing their job properly, our Country would be saving Trillions of Dollars in Interest Cost,” Trump wrote. “The Board just sits there and watches, so they are equally to blame.”

But Powell is not alone in his assessment. Leading economists outside of the Federal Reserve have similarly argued that now is not the time to cut interest rates. Atlanta Fed President Raphael Bostic told Reuters last week that the country has “space and time” to figure out its ideal rates considering that companies have already boosted prices in reaction to heightened material and service costs in the wake of Trump’s tariffs.

Representative Thomas Massie awoke Tuesday morning to find himself at the center of the feud between Donald Trump and Elon Musk. 

Musk posted on X in the small hours of Tuesday morning, indicating that he would donate to the Kentucky Republican’s reelection campaign. In recent months, Massie had become a pariah in his party for refusing to bend the knee on any Trump-backed spending bill and opposing the president’s strike in Iran. 

Prior to coming out in support of Massie, the former DOGE czar had been escalating his opposition to Trump’s behemoth budget bill and threatening to launch his own political party if the legislation passed in the Senate, even though he previously claimed he was done spending money on elections. 

Now, Musk seems to have found a new politician to hitch his wagon to, and sparks are already flying.

“I woke up this morning to find out @elonmusk is supporting my re-election!” Massie wrote in a lengthy post on X Tuesday morning. He thanked Musk for his financial support and lauded the billionaire technocrat’s X (formerly Twitter) takeover for allowing Massie to “bypass conventional media.”

Massie added that the debate over Trump’s “big, beautiful bill” was “a referendum on whether members of Congress can think and act independently based on what’s best for the country, or whether all members of congress must be reduced to rubber stamps for their respective political parties and swampy special interests.”

Musk, who embodies those very “swampy special interests,” replied to another one of Massie’s posts: “You’re awesome.”

“You’re too kind, but thank you!” Massie flirted back. “A large part of my job is to keep government from screwing things up for the engineers and entrepreneurs who do make this world a better place. I don’t think enough people appreciate the contributions you and your teams have made to civilization.”

Trump must’ve caught wind of the chemistry between Musk and Massie. “New poll: Anybody I Endorse beats Thomas Massie of Kentucky by 25 points. Get ready. Massie is a very bad guy!” Trump wrote in a post on Truth Social Tuesday morning.  

In response to Trump’s threat to unseat him, Massie took a shot at pollster Doug Kaplan. “His pollster looks like a homeless man broadcasting from the stairwell of a crack house. DJT should buy him a cheeseburger,” Massie wrote in a post on X.  

A poll from Kaplan Strategies had found that Massie’s rift with the president had made him unpopular among Republican voters. Only 19 percent of respondents had said they would vote for Massie, and that number would drop to 14 percent if Trump endorsed an opponent.

President Trump made dehumanizing jokes about detained immigrants being eaten by alligators on his way to visit the so-called “Alligator Alcatraz” ICE facility in Florida on Tuesday.

“With Alligator Alcatraz, is the idea that if some illegal immigrant escapes, they just get eaten by an alligator, or a snake or something?” Fox News’s Peter Doocy asked the president.

“I guess that’s the concept, this is not a nice business. I guess that’s the concept,” Trump said with a smile.

“You know, uh, snakes are fast. But alligators, we’re gonna teach [the detained immigrants] how to run away from an alligator, OK? If they escape prison, how to run away: Don’t run in a straight line, run like this,” Trump continued, making a zigzag motion with his hands. “And you know what? Your chances go up about one percent. Not a good day!”

This “Alligator Alcatraz” is a hastily constructed immigrant detention center in the middle of the Everglades that Florida was granted federal approval for last week. It is expected to open this month with 5,000 beds, eventually increasing to 10,000. The detention center will cost the state $450 million per year to run, which will be reimbursed through FEMA.

“We are working on cost-effective and innovative ways to deliver on the American people’s mandate for mass deportations,” the Department of Homeland Security wrote on X last week. “Alligator Alcatraz will expand facilities and bed space in just days, thanks to our partnership with Florida.”

This detention center has been widely condemned. Conservationists and environmental groups have protested the facility’s construction on the grounds that it will endanger the lush, natural wildlife in the area that Trump spoke so lightly about. And Miccosukee and Seminole Native American groups are opposed to the project due to its proximity to their ancestral land.

Overall, this facility is another step in Trump’s aggressive deportation crackdown on Latinos that will play particularly well on Fox News and Newsmax. And the way Trump talks about those who will be detained at the center—joking about the people he’s been snatching off the streets being mauled to death by animals—shows that he simply does not think immigrants are deserving of basic human dignity.

Vice President JD Vance is being lambasted for dismissing social safety net rollbacks under the Trump tax bill currently making its way through Congress.

On Monday night, Vance attempted to rally support for the bill in a post on X, writing, “Everything else—the CBO score [the Congressional Budget Office cost estimate], the proper baseline, the minutiae of the Medicaid policy—is immaterial compared to the ICE money and immigration enforcement provisions.”

Many were rubbed the wrong way by Vance’s claim that the bill’s worrisome qualities are of little consequence compared to its staggering expansion of federal immigration enforcement (which a majority of Americans already believe has “gone too far” in carrying out Trump’s deportation agenda).

Particularly odious was the suggestion that “the minutiae of the Medicaid policy,” among other all-but-trivial concerns, is “immaterial.” After all, in delivering “the most dramatic reductions in safety net spending in modern U.S. history,” per The Washington Post, the bill could cause 17 million people to lose their health insurance and, according to some estimates, lead to tens of thousands of preventable deaths each year. It is also projected to add trillions to the deficit.

“If Republicans wanted to pass a big ICE funding bill they could,” posted journalist Matthew Yglesias on X. “What they wrote is a bill that has trillions and trillions and trillions of dollars of regressive tax cuts partially offset by cuts in programs for poor Americans but that also massively increases debt.”

Yahoo Finance reporter Jordan Weissmann tweeted: “As far as I can tell, the Medicaid changes would be the largest rollback of the health care safety net that a modern developed country has ever passed. JD Vance is dismissing that as ‘minutia.’”

“100K+ people will die from preventable deaths when millions lose their health insurance,” posted Yale Law professor Natasha Sarin. “Hard to see how that is immaterial.”

Democratic Representative Ro Khanna tweeted, “What happened to you [JD Vance]—author of Hillbilly Elegy—now shrugging off Medicaid cuts that will close rural hospitals and kick millions off healthcare as ‘minutiae?’”

To think that the vice president touting mass deportations as an acceptable balm for the untold suffering unleashed by historic social program cuts positions himself as something of a populist within the GOP.

The next victim of Donald Trump’s deportation crusade could be Elon Musk.

The president suggested Tuesday that he’s open to giving his biggest financier the boot, telling reporters before boarding Marine One that his administration would “have to take a look” at getting the South African out of the country.

“We might have to put DOGE on Elon,” Trump said. “You know what DOGE is? DOGE is the monster that might have to go back and eat Elon. Wouldn’t that be terrible. He gets a lot of subsidies.”

The world’s richest man has become one of the most vocal opponents of Trump’s “big, beautiful bill,” which would extend his 2017 tax cuts for millionaires and corporations at a cost to critical social programs such as Medicaid. But Musk’s frustration with the bill stems more from the initiative’s exorbitant price tag, which he claims is incongruent with Trump’s previous promises to size down government spending. On Saturday, the Congressional Budget Office estimated that the Senate legislation would increase the deficit by more than $3.9 trillion over the next 10 years.

Trump, however, suggested that Musk’s real reasoning behind his recent opposition of the administration was due to the termination of electric vehicle mandates.

“When you look at it, who wants—not everybody wants an electric car,” Trump said. “I don’t want an electric car. I want to have maybe gasoline, maybe electric, maybe a hybrid, maybe someday a hydrogen—if you have a hydrogen car there’s one problem, it blows up.”

“So I’m going to give that one to Peter,” Trump added, likely referring to trade adviser Peter Navarro.

(It’s interesting Trump says he doesn’t want an electric car, considering he staged a whole Tesla dealership at the White House for Musk in March. Trump promptly sold the Tesla he bought that day after he and Musk publicly broke up.)

Responding to the video Tuesday, Musk posted on X: “So tempting to escalate this. So, so tempting. But I will refrain for now.”

Musk has spent the last several days elevating opposition to the bill and its contents. Late Monday night, the billionaire retweeted a post claiming that “ELON NEVER WANTED AN EV MANDATE OR SUBSIDIES,” pointing to a 2022 interview in which Musk argued that ending the electric vehicle mandate would improve Tesla’s performance.

He also shared graphs of America’s rising debt and questioned why both parties continue to raise the debt limit ceiling. He underscored that the conservative hoopla regarding undocumented immigrants receiving Medicaid was effectively a red herring, since it’s already illegal for them to do so, and posted a poll on X for his 221.5 million followers asking if the bill should be “allowed.”

“Removal of funding for enforcement of federal contempt of court orders is the actual crux of this spending bill,” Musk wrote. “This is nominally aimed at removal of illegal immigrants, but obviously also enables many other abuses of power by the President.”

An hour after the poll was shared, more than 65,000 respondents, or 64.7 percent, had voted “no.”