Catherine Rampell

Because the Fed is supposed to both promote stable prices and maximum employment, and tariffs make both of those

harder.

And the thing you would do if you're the Fed to address one of those problems is the opposite of the thing you would do to address the other one of those problems, specifically that if you care about inflation, you would raise interest rates.

If you care about stagnation, you would cut interest rates.

So they're in this really tricky situation where they're

You know, they're damned if you do, damned if you don't.

Donald Trump obviously wants them to do take one of those paths, which is to cut interest rates, which they have been doing.

He wants them to cut even more.

But as you point out, the real risk there is if they do what he wants, which is to like ratchet rates down to zero or one percent, you could have a huge burst in inflation.

But that's going to be the story of the next year.

I think that he's going to be really tussling with the Fed.

He's, you know,

We can talk about this if you want, but he's trying to put some kind of sycophant on the Fed board as the new chair to replace Jay Powell.

We'll see who he ends up choosing.

But he's also probably trying to plant other more pliable people into the other Fed positions.

Well, it's especially not going to get fixed if they keep on doing things to break it further.

Like, it is true that Donald Trump came in promising something that he could never deliver, which was to lower prices.

That is not something a president can do, at least not at the aggregate price level.

If the overall price level in the United States were actually falling, if we were experiencing deflation, that would mean the economy is very sick, like that's what happened during the Great Depression.

He can't deliver that.