Trump tariffs or Powell policy? Who's to blame for high rates: Bias Breakdown
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Jul 8, 2025
President Donald Trump and Fed Chair Jerome Powell are clashing over interest rate cuts, with both sides of the media taking different sides.
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There's bad blood between President Trump and Federal Reserve Chair Jerome Powell
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Trump is ramping up calls for the Fed to lower interest rates this month
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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
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So anyway, we should be two points lower. It'd be nice to be two and a half points lower
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We're simply taking some time. As long as the U.S. economy is in solid shape
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we think the prudent thing to do is to wait and learn more and see what those effects might be
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This divide on when to cut rates has led to a temperature increase in rhetoric
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He's an average mentally person. I'd say low in terms of what he does
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And just as Trump questions Powell's thinking behind the Fed's decision making
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We're paying more because we have a guy who suffers from, I think, Trump derangement syndrome, if you want to know the truth
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Commentators on the left question Trump's thinking. There's sort of a Fed derangement syndrome, and it's not unique to Donald Trump
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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
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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
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a divide is emerging over why rates remain elevated and who is responsible
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Left-leaning outlets are amplifying voices that blame Trump's tariff policies for keeping rates high
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echoing the Federal Reserve's own warnings. Right-leaning outlets are pointing the finger at Powell
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echoing arguments from Trump administration officials. Welcome to Bias Breakdown. Join Straight Arrow News
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See the slant. Avoid the bias. When others skew the facts, we give you the truth down the center
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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
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Powell saying last week Trump's tariff policy is the reason interest rates have not been lowered
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Chair, would the Fed have cut more by now if it weren't for the tariffs
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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
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But Trump sent a letter to Powell last week, which press secretary Caroline Levitt shared in a press briefing
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The letter showcased 34 other central bank interest rates that are lower than the U.S
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Trump writing to Powell, Jerome, you are as usual, too late. Telling the Fed chair he should lower
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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
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Fox is right-leaning and CNBC is left-leaning, according to multiple news rating organizations
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Here, we see narratives diverge as well. If you're tuning into one network over the other
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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
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He's making the wrong moves if you look at what the market is doing with interest rates
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Depending on which network yst you're watching, accusations of political motivation are being leveled at both Powell and Trump
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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
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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
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Here you had a Federal Reserve that was absolutely committed to the idea that they would keep lowering rates as inflation was coming down
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right up until they abandoned that approach shortly after the inauguration of President Trump
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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
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Who we might appoint as vice. If a chair comes up, who's he going to pressure? It's very damaging
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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
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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
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The Fed's logic is kind of falling apart when you look at the data
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because we are collecting tariff revenue, but not seeing a rise in inflation
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With all these good inflation numbers coming down, and it really is a surprise
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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
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So I'm trying to figure out what is the Fed's argument here
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While MSNBC on the left interviewed ysts who cited economic uncertainty defending Powell against Trump's rhetoric
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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
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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
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It's worth noting Powell is a Republican appointed to Fed chair by President Trump
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during his first term. But over the years, the two have seen things differently
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You've seen the narratives at play. Now let's talk about what you need to know behind the
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decision-making process. The Fed looks at several factors when it comes to potentially lowering
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interest rates. So how is the economy doing? The latest inflation data available from May
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showed a 0.1% increase month over month with a 2.4% rise in prices from a year ago
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That's slightly above April's annual inflation rate, which was the lowest since 2021
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Inflation's been under 3% for the past year, but it's still hovering above the Federal Reserve's target of 2%
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A new jobs report showed 147,000 jobs added in June, beating expectations
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Unemployment ticked down to 4.1%. Economists thought it would come in slightly higher
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This data shows a strong economy. Trump says that stability means it's time for rates to come down
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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
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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
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That pause was set to expire this week, but the White House now says Trump is likely to extend it through August 1st
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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
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little by little from March 2022 through July 2023. Then, the Fed cut interest rates in September of last year by 50 basis points
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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
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According to CME FedWatch, the probability of a 25 basis point interest rate cut in July
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went from 23.8% to just 4.7% following the latest jobs report. So probably unlikely things will change
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The next Fed meeting will be in September. According to FedWatch, there is a 62% chance
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the Fed will cut rates then and a 40% likelihood they get cut again at the next meeting in October
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As for Powell, he doesn't have the sole authority to lower interest rates
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The Federal Open Market Committee, made up of 12 members, vote on rates
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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
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Fed chair for policy reasons. But as reported by the Wall Street Journal, Trump could undermine
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Powell's authority by announcing his replacement early. Here's how that would work. The journal
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wrote, because the new chair wouldn't take office until next May, announcing the pick this summer or
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fall would be far earlier than the traditional three to four month transition period. An early
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announcement could allow the chair in waiting to influence investor expectations about the likely
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path for rates like a backseat driver attempting to steer monetary policy before Powell's term ends
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Treasury Secretary Scott Bessent hinted that Trump already has people in mind
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I think we have lots of good candidates for Fed chair. We will start working on that in the fall
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Powell could also resign early, something Trump has called on him to do
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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
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And the media has too. largely leaning heavily on one side of the interest rate discussion
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If you're watching left-leaning outlets, you're likely hearing Trump is wrong to push for rate cuts
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because of uncertainty around future economic outlooks. But if you're watching right-leaning outlets
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you're probably hearing that Powell is wrong to hold rates steady, given current stable jobs numbers and inflation data
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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
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are yours to decide. And that's your bias breakdown. Thanks so much for watching this
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week's episode. If you're new to the show, welcome. I'm glad you're here. And if you're
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returning for more of our content, thanks for staying engaged with us. We're working to tell
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the news a little differently here. Poll after poll shows Americans don't have much trust in the
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media. So we're here to be transparent, to call out what the media gets wrong, and to break down
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how facts can be framed to fit a narrative. You can find more episodes by visiting us on Spotify
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download the free Straight Arrow News mobile app and turn on notifications for bias breakdown
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Don't forget to join in on the conversation. Sometimes I'm able to jump into the comments
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on YouTube and reply to a few of you. There's often healthy dialogue and debate, and I genuinely
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learn from our viewers, so please keep the feedback coming. A big thanks to Ian Kennedy
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and Allie Caldwell for their work on video edits and graphics this week
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and thank you for sticking with me all the way to the end here. I'll see you next time
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