Jerome Powell
Jerome Powell

Hats off to Federal Board chairman Jerome Powell for finally getting off his duff to stand up to his unhinged taunter-in-chief.

Trump has hurled a steady stream of juvenile insults at Powell in an effort to persuade him to reduce interest rates.

He has called Powell a “nincompoop,” “fool,” “major loser,” “moron,” “dumb guy,” “stupid,” and “not a smart person.” Those words did not exactly flow from the mouth of a stable genius.

During the US-Saudi Investment Forum in November, Trump said Powell “has mental problems,” and is “grossly incompetent.”

He went on to say that Powell should be sued for spending $4B to build a little building, while I’m building a ballroom for a fraction of that.

“To be honest, I’d love to fire his ass,” said Trump.

The president’s suggestion of a lawsuit set the stage for his own PR smackdown.

In launching a criminal probe into Powell’s June testimony about the renovation of Federal Reserve buildings, the Justice Dept. lobbed a PR softball to Jay.

He hit it out of the park. In his January 11 video, the Fed chief said no one is above the rule of law. And then he took a Mighty Casey swing:

“But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure.

“This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”

Tip your cap to the cheering crowd, Jay.

To Powell, the issue is whether the Fed can continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.

Trump claims he knew nothing about the Justice Dept. suit. If you believe that, there’s a bridge in Brooklyn that I would like to sell you.

Yes, we have bananas… The pro-Powell PR bandwagon then shifted into high gear.

Three former Fed chiefs (Alan Greenspan, Ben Bernanke, and Janet Yellen) and a constellation of economic luminaries, warned that the US is heading for Banana Republic status, if Trump pulls off his bid to reel in the Fed’s independence.

Their Jan 12 statement blasts the criminal probe of Powell as an unprecedented attempt to use prosecutorial attacks to undermine that independence.

“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States, whose greatest strength is the rule of law, which is at the foundation of our economic success.”

On Jan 13, leading central bankers from Continental Europe, the UK, Canada, Korea, Brazil, Australia, New Zealand, and South Africa jumped into the fray, expressing their solidarity with Powell and the importance of an independent Fed.

“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.”

The tremendous PR pushback against Trump’s bullying of Powell is long overdue. The president should leave monetary policy to people who know what they are talking about.

Here’s a suggestion: Trump should spend the rest of this term, finishing the gilding of his Oval Office man cave into something that would make The Sun King (France’s Louis XIV) proud.