Harry Enten: Trump is Losing the Political Fight to Fed Chair Jerome Powell

Public Opinion on Fed Independence

• 💡 Americans overwhelmingly believe the Federal Reserve should act independently of political influence, with 68% supporting this view.
• 🎯 This sentiment is shared across the political spectrum: 91% of Democrats, 75% of independents, and even 41% of Trump's base agree on the importance of Fed independence for the economy.
• 📌 The public strongly disagrees with President Trump's pressure campaign, wanting a Fed that is free from his influence.

Approval Ratings and Economic Sentiment

• 📊 In December, Donald Trump's approval rating stood at -23 points, significantly underwater.
• 🚀 In contrast, Federal Reserve Chair Jerome Powell, despite not being universally popular, had a net approval rating of -3 points, making him more popular than Trump according to Gallup.
• 📉 Trump's net approval rating on the economy has plummeted 25 points in a year, from +6 to -19, indicating a significant decline in public confidence.

Political and Legal Pressure on the Fed

• ⚠️ The Federal Reserve is facing an unprecedented situation, including a criminal investigation into Jerome Powell, which Powell states is a pretext for political pressure regarding interest rates.
• 🏛️ The Fed was established in 1913 to insulate interest rate decisions from political winds, preventing politicians from manipulating monetary policy for electoral gain.
• 🗣️ Powell's actions, including an extraordinary video statement, assert the Fed's independence against what is perceived as political interference.

Bipartisan Criticism and Market Reactions

• 🤝 A joint statement from former Fed chairs (including Bernanke, Greenspan, and Yellen) and Treasury secretaries criticized Trump's actions, stating such behavior has no place in the United States and undermines economic strength.
• 🚫 Republican Senator Thom Tillis has pledged to hold up future Trump appointees for the Fed, citing concerns about the independence of both the Fed and the Department of Justice.
• 📈 While markets have shown some negative reaction, prediction markets indicate a 94% chance that the Fed will maintain interest rates in January, suggesting Powell is expected to hold his ground.
• 💬 Some Republicans, like Senator Lisa Murkowski, are also signaling support for Tillis's stance, indicating a potential shift in how some in Congress will hold the administration accountable.