#PowellVsTrump

Get ready for a time travel journey, because the story between Donald Trump and Jerome "Jay" Powell has more plot twists than a soap opera. It is a saga about power, money, and two personalities that clashed like trains.

Here is the history of their relationship, told as if we were having coffee.


Imagine the scene: on one side, a real estate mogul and reality TV star who comes to the presidency with the promise of making the American economy "roar" like never before. On the other, a low-profile, methodical lawyer and banker faithful to the rules of economics. What could go wrong? Well, everything.

Act 1: The Honeymoon (2017 - Early 2018)
It all started as a story of convenience. In late 2017, Donald Trump had to choose the new head of the Federal Reserve (the Fed), the central bank of the U.S. that controls interest rates. The head at that time was Janet Yellen, a Democrat appointed by Obama.

Trump, wanting to place "his" people, saw in Jerome Powell, who was already a board member of the Fed and a Republican, a perfect choice. He thought Powell would be an ally, a guy who would keep interest rates low so that credit would flow, businesses would invest, and the stock market would rise. In short, he wanted an entertainer for his economic party.

In February 2018, Powell took office. Trump was happy. The market was happy. It seemed like the beginning of a great friendship.

Act 2: The Love is Over (Mid 2018 - 2019)
But this is where the script takes a turn. The U.S. economy was growing strongly, partly due to Trump's tax cuts. Powell and the Fed, acting like the responsible firefighter who sees the kitchen overheating, did what the economics manuals say to do: they started raising interest rates to prevent inflation from getting out of control.

For Trump, this was a betrayal. It was like the DJ he hired for his party suddenly started playing slow music!

And thus began the public bombardment. Trump broke a decades-long tradition where presidents did not comment on the Fed's decisions to respect its independence.

First, there were indirect hints on Twitter: "I am not happy with the rate hikes."
Then, the attacks became personal and brutal: He called the Fed "crazy," "out of control," and its "biggest threat." He said Powell was a "golfer who doesn’t know how to putt" (a serious offense for a golf enthusiast like Trump).
The climax of the drama: In August 2019, after a new Fed decision, Trump tweeted a question that left everyone stunned: "Who is our biggest enemy, Jay Powell or President Xi (of China)?" Comparing the head of his own central bank to the leader of his main geopolitical rival was unprecedented.
Throughout this time, Powell maintained an almost robotic composure. At every press conference, with an army of journalists asking him about Trump’s tweets, he calmly responded: "The law gives us very important independence, and we use it to serve the American people."

Trump even explored whether he could fire him, something that was nearly impossible legally and would have triggered panic in global financial markets.

Act 3: A Truce Forced by the Pandemic (2020)
When it seemed that the tension couldn't escalate any further, a common enemy arrived that changed everything: COVID-19.

The pandemic forced the global economy to shut down. Suddenly, Trump and Powell were no longer fighting each other; they were both battling a historic economic collapse. Their goals aligned overnight.

Powell and the Fed acted at breakneck speed: they lowered interest rates to zero, injected trillions of dollars into the markets, and launched emergency loan programs. They became the lifeline of the economy.
Trump, for his part, pushed through massive fiscal stimulus packages, sending checks directly to citizens and helping businesses.
They stopped fighting because, essentially, both were flooring the accelerator at the same time. The open war gave way to an uncomfortable but necessary truce.

Act 4: The Epilogue and... The Sequel? (Post-presidency until today)
Trump lost the election but did not stop talking about Powell. When inflation (partly caused by all that pandemic stimulus) skyrocketed, Trump blamed him. And when Powell, now under Biden's presidency, began the most aggressive rate hike cycle in 40 years to combat that same inflation, Trump also blamed him for "suffocating the economy."

Today, the situation is this:

Jerome Powell remains at the helm of the Fed, having been renominated by President Biden in a gesture of bipartisan trust.
Donald Trump, in his new presidential campaign, has made it very clear that if he returns to the White House, he will not renew Powell's term.
Thus, the saga is not over. It is the story of how a populist president clashed head-on with the independence of one of the world’s most powerful institutions. It was a showdown between the politics of the "now" and the economics of the "long term," and its echoes still resonate in every financial decision made today. The second season could premiere in 2025.