Wall Street Journal Backs Fed Chair in — and Mocks Trump Over — Feud: ‘The Problem for Mr. Trump Is That Mr. Powell Spoke the Truth’

Federal Reserve board member Jerome Powell speaks after President Donald Trump announced him as his nominee for the next chair of the Federal Reserve in the Rose Garden of the White House in Washington, Thursday, Nov. 2, 2017. (AP Photo/Alex Brandon)

The Wall Street Journal backed Federal Reserve Chairman Jerome Powell in — and mocked President Donald Trump over — their feud in an editorial.

Over the last few days, Trump has threatened Powell’s job and criticized him in harsh terms for not lowering interest rates while Powell has knocked Trump’s trade policy and insisted he won’t leave his post.

“President Trump’s tariff war isn’t going well, with market ructions and evidence of a slowing economy. So it was probably inevitable that Mr. Trump would demand that the Federal Reserve ride to his rescue by cutting interest rates,” began the Journal  before needling Trump over launching his attacks on Powell “with his familiar nuance.”

“Mr. Trump was reacting to Mr. Powell’s remarks Wednesday that the President’s tariffs complicate the Fed’s job of maintaining stable prices with low unemployment,” continued the influential conservative editorial board. “The problem for Mr. Trump is that Mr. Powell spoke the truth. Tariffs are a tax, which means higher prices for tariffed goods. Mr. Trump has imposed a minimum tariff on the world of 10%, which is roughly four times the previous average U.S. tariff rate of 2.4%.”

“The world is also paying attention to Mr. Trump’s call for the ‘termination’ of Mr. Powell, whose term runs to May 2026. The President often talks in private of firing the Fed Chairman, who wouldn’t go quietly. This would tee up a protracted legal fight, with market turmoil to match as investors awaited a Supreme Court ruling on the legality of dismissal. That’s the last fight Mr. Trump needs now,” it concluded. “If the President wants faster growth and less market turmoil, he can help by ending his tariff campaign. Then get Congress to move on a tax- and spending-cut bill, and press ahead with deregulation. The main lesson from Trump vs. Powell is that the central bank can’t make up for the economic policy errors of politicians.”