Zaid

Jerome Powell has received bipartisan support from politicians and former Fed officials and even Wall Street veterans.

In fact, Republican Senator Tom Tillis of North Carolina, who sits on the banking committee, says he's going to block any nominee to replace Jerome Powell until this investigation is resolved.

There's also Jamie Dimon, CEO of JPMorgan Chase.

He weighed in this week saying that anything that undermines the Fed's independence is probably not a great idea.

So we'll see if this bipartisan backlash is enough for the DOJ to back down.

What I don't understand, though, is like the timing of all this, because remember, Jerome Powell's term as Fed chair ends in May and Trump is going to replace him with someone who probably shares Trump's views on interest rates.

Right now, the leading candidates are Kevin Warsh, a former Fed governor, and Kevin Hassett, Trump's economic advisor.

So Trump will get his chance to change the head of the Fed in just a few months.

But despite that, the DOJ is still going after the Fed and Jerome Powell and threatening the Fed's independence.

And honestly, this move could end up backfiring for Trump.

So what's my take here?

Well, the Federal Reserve and its independence plays a key role in how our economic system works today.

And Trump's plan to break that independence to lower rates could end up backfiring.

The more that Trump is seen as trying to control the Fed, the less credible the Fed becomes.

And if investors start to doubt the Fed's independence, they're gonna demand higher interest rates to compensate for that risk.

Now, look, I gotta say, the Fed isn't perfect, okay?

They've made mistakes in the past,

including recently in 2021 when they thought that inflation was transitory and they turned out to be wrong.

But having a politicized Federal Reserve that makes decisions based on election cycles instead of economic conditions could lead to a terrible economic situation.

So personally, I'm glad that Jerome Powell finally responded to Trump's threats.