Larry Kudlow on Trump, Jay Powell, and the US Economy

Trump's Stance on Fed Chair Jay Powell

• 📌 President Trump has stated he is not planning to fire Fed Chair Jay Powell, despite calling his job performance "lousy."
• 💬 Trump described Powell as a "total stiff" with "no personality" and "no high intelligence," likening speaking to him to talking to a chair.
• 🏛️ There was no drafted letter to fire Powell, and Trump indicated it was highly unlikely unless Powell had to leave.

Federal Reserve Building Controversy

• 🏢 The Federal Reserve's new building has been described as a "major embarrassment" in an era focused on downsizing government.
• ⚠️ The building's palatial nature contrasts with the zeitgeist of reducing federal headcount and curtailing the power of the "deep state."
• 🧠 The speaker suggests Jay Powell and the Fed are infected by "deep state anti-Trump sympathies."

Positive Economic Indicators

• 📊 The US economy is performing well, with inflation remaining low.
• 📈 Since January, the Consumer Price Index (CPI) has increased only 1.8% annually, and the Producer Price Index (PPI) has risen just 0.21% annually.
• 💰 Tariff revenues are projected to be around $300 billion for the fiscal year, significantly reducing the deficit.
• 📉 Federal spending has slowed to 4.2% over the past year and has declined as a share of GDP.
• 💸 The M2 money supply is rising at a counterinflationary pace of 4.5% annually.

Economic Policy and Fed's Role

• 🚀 The "one big beautiful bill" is described as a pro-growth, supply-side formula of lower taxes and lower regulations.
• 💡 This policy is expected to increase real wages, productivity, and onshoring investment.
• 🤖 The AI revolution is also contributing to productivity and a business investment boom, which are counterinflationary.
• 📉 These positive economic factors suggest the Fed's target interest rate should be coming down, as President Trump has argued.