Trump tariffs or Powell policy? Who's to blame for high rates: Bias Breakdown

There's bad blood between President Trump and Federal Reserve Chair Jerome Powell

Trump is ramping up calls for the Fed to lower interest rates this month

while Powell maintains he wants to wait things out. Am I allowed to appoint myself at the Fed? I'd do a much better job than these people

So anyway, we should be two points lower. It'd be nice to be two and a half points lower

We're simply taking some time. As long as the U.S. economy is in solid shape

we think the prudent thing to do is to wait and learn more and see what those effects might be

This divide on when to cut rates has led to a temperature increase in rhetoric

He's an average mentally person. I'd say low in terms of what he does

And just as Trump questions Powell's thinking behind the Fed's decision making

We're paying more because we have a guy who suffers from, I think, Trump derangement syndrome, if you want to know the truth

Commentators on the left question Trump's thinking. There's sort of a Fed derangement syndrome, and it's not unique to Donald Trump

Am I allowed to appoint myself chair of the Federal Reserve? No other president was ever capable of saying anything as stupid or as indicative of dementia as that

Interest rates are higher than they've been in recent years. While both Republicans and Democrats say they want to see interest rates come down

a divide is emerging over why rates remain elevated and who is responsible

Left-leaning outlets are amplifying voices that blame Trump's tariff policies for keeping rates high

echoing the Federal Reserve's own warnings. Right-leaning outlets are pointing the finger at Powell

echoing arguments from Trump administration officials. Welcome to Bias Breakdown. Join Straight Arrow News

See the slant. Avoid the bias. When others skew the facts, we give you the truth down the center

Welcome to Bias Breakdown. The war of words is on. But we have a guy that's just a stubborn mule and a stupid person that is making a big mistake

Powell saying last week Trump's tariff policy is the reason interest rates have not been lowered

Chair, would the Fed have cut more by now if it weren't for the tariffs

So I do think that I think that's right. In effect, we went on hold when we when we saw the size of the tariffs and where and essentially all all inflation forecasts for the United States went up materially as a consequence of the tariffs

But Trump sent a letter to Powell last week, which press secretary Caroline Levitt shared in a press briefing

The letter showcased 34 other central bank interest rates that are lower than the U.S

Trump writing to Powell, Jerome, you are as usual, too late. Telling the Fed chair he should lower

the rate by a lot suggesting the U should have one of the lowest interest rates in the world For financial news many Americans choose to tune into business networks the top two being Fox Business Network and CNBC

Fox is right-leaning and CNBC is left-leaning, according to multiple news rating organizations

Here, we see narratives diverge as well. If you're tuning into one network over the other

you're getting a perception of Powell under their political lens. He's not a stubborn mule. He's a smart guy. He's done a very good job

He's making the wrong moves if you look at what the market is doing with interest rates

Depending on which network yst you're watching, accusations of political motivation are being leveled at both Powell and Trump

Right-leaning outlets claim Powell is working against Trump's interest. And left outlets accuse Trump of improperly pressuring Powell to make decisions based on his administration's demands

We hear all this policy criticism from Powell now, and we didn't hear much of it when Biden was spending money like a drunken sailor, right

Here you had a Federal Reserve that was absolutely committed to the idea that they would keep lowering rates as inflation was coming down

right up until they abandoned that approach shortly after the inauguration of President Trump

The mere thought that you're going to make trouble for the Fed, you're going to put political pressure, you're going to undermine its credibility

Who we might appoint as vice. If a chair comes up, who's he going to pressure? It's very damaging

More often than not, networks stack their panels with experts and economists who reinforce their political lean and push the narrative that benefits their side of the debate

Right-leaning Fox Business interviewed ysts that examined economic data and concluded the Fed should slash rates now, which matches Trump's take on the issue

The Fed's logic is kind of falling apart when you look at the data

because we are collecting tariff revenue, but not seeing a rise in inflation

With all these good inflation numbers coming down, and it really is a surprise

the tariff inflation is missing in action. I mean, that's one thing. The target rate is now over two percentage points, arguably more than that, above the inflation rate

So I'm trying to figure out what is the Fed's argument here

While MSNBC on the left interviewed ysts who cited economic uncertainty defending Powell against Trump's rhetoric

We know why the Fed is not cutting interest rates. Fed Chair Jerome Powell basically all but said last week that they would be cutting rates if not for the trade war that's created all of this uncertainty about whether or not inflation is going to be reignited

First of all let understand what Powell did wrong He stated the obvious He said something that every economist is saying which is these tariffs are going to cause higher inflation and higher unemployment

It's worth noting Powell is a Republican appointed to Fed chair by President Trump

during his first term. But over the years, the two have seen things differently

You've seen the narratives at play. Now let's talk about what you need to know behind the

decision-making process. The Fed looks at several factors when it comes to potentially lowering

interest rates. So how is the economy doing? The latest inflation data available from May

showed a 0.1% increase month over month with a 2.4% rise in prices from a year ago

That's slightly above April's annual inflation rate, which was the lowest since 2021

Inflation's been under 3% for the past year, but it's still hovering above the Federal Reserve's target of 2%

A new jobs report showed 147,000 jobs added in June, beating expectations

Unemployment ticked down to 4.1%. Economists thought it would come in slightly higher

This data shows a strong economy. Trump says that stability means it's time for rates to come down

Powell is using that strength to defend his wait-and-see position, saying he wants to see how the economy reacts to Trump's tariff policies

The stock market gets shaky whenever investors believe tariffs are coming. Trump's Liberation Day tariffs were put on a 90-day pause back in April

That pause was set to expire this week, but the White House now says Trump is likely to extend it through August 1st

The current Fed rate sits between 4.25 to 4.5 percent. Taking a look at this graph, you can see how the range ticked up

little by little from March 2022 through July 2023. Then, the Fed cut interest rates in September of last year by 50 basis points

and another 25 basis points in November and again in December. The Federal Reserve Board is set to meet again at the end of this month

According to CME FedWatch, the probability of a 25 basis point interest rate cut in July

went from 23.8% to just 4.7% following the latest jobs report. So probably unlikely things will change

The next Fed meeting will be in September. According to FedWatch, there is a 62% chance

the Fed will cut rates then and a 40% likelihood they get cut again at the next meeting in October

As for Powell, he doesn't have the sole authority to lower interest rates

The Federal Open Market Committee, made up of 12 members, vote on rates

But Powell does lead those discussions setting the tone and agenda of meetings So his opinion does carry weight Powell tenure as Fed chair ends next May Courts have ruled a president can fire the

Fed chair for policy reasons. But as reported by the Wall Street Journal, Trump could undermine

Powell's authority by announcing his replacement early. Here's how that would work. The journal

wrote, because the new chair wouldn't take office until next May, announcing the pick this summer or

fall would be far earlier than the traditional three to four month transition period. An early

announcement could allow the chair in waiting to influence investor expectations about the likely

path for rates like a backseat driver attempting to steer monetary policy before Powell's term ends

Treasury Secretary Scott Bessent hinted that Trump already has people in mind

I think we have lots of good candidates for Fed chair. We will start working on that in the fall

Powell could also resign early, something Trump has called on him to do

But he's indicated no intention of doing so. Those on the political left and right have made their views clear on what the Federal Reserve should do

And the media has too. largely leaning heavily on one side of the interest rate discussion

If you're watching left-leaning outlets, you're likely hearing Trump is wrong to push for rate cuts

because of uncertainty around future economic outlooks. But if you're watching right-leaning outlets

you're probably hearing that Powell is wrong to hold rates steady, given current stable jobs numbers and inflation data

But instead of telling you what you should think and why, it's my job to explain what is happening, and then opinions over whether the Fed is right or wrong

are yours to decide. And that's your bias breakdown. Thanks so much for watching this

week's episode. If you're new to the show, welcome. I'm glad you're here. And if you're

returning for more of our content, thanks for staying engaged with us. We're working to tell

the news a little differently here. Poll after poll shows Americans don't have much trust in the

media. So we're here to be transparent, to call out what the media gets wrong, and to break down

how facts can be framed to fit a narrative. You can find more episodes by visiting us on Spotify

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Don't forget to join in on the conversation. Sometimes I'm able to jump into the comments

on YouTube and reply to a few of you. There's often healthy dialogue and debate, and I genuinely

learn from our viewers, so please keep the feedback coming. A big thanks to Ian Kennedy

and Allie Caldwell for their work on video edits and graphics this week

and thank you for sticking with me all the way to the end here. I'll see you next time