Trump claims he didn’t know anything about it.
By Wolf Richter for WOLF STREET.</h4
In a major escalation of Trump’s efforts to oust Powell and knuckle the Fed under, the Justice Department served the Fed with grand jury subpoenas and threatened Powell with a criminal indictment related to his testimony to Congress last June about the renovations of the historic buildings of the Federal Reserve in Washington, D.C.
This was first reported by the New York Times Sunday night, based on sources:
“The U.S. attorney’s office in the District of Columbia has opened a criminal investigation into Jerome H. Powell, the Federal Reserve chair, over the central bank’s renovation of its Washington headquarters and whether Mr. Powell lied to Congress about the scope of the project, according to officials briefed on the situation.
“The inquiry, which includes an analysis of Mr. Powell’s public statements and an examination of spending records, was approved in November by Jeanine Pirro, a longtime ally of President Trump who was appointed to run the office last year, the officials said.”
The criminal investigation was then confirmed by Powell in an extraordinary video statement, where he came out swinging. Here is his statement in full:
“Good evening.
“On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.
“I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. 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.
“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.
“I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.
“Thank you.”
Upon which stock futures tanked, with Nasdaq futures -0.95% and S&P 500 futures -0.63% Sunday night.
Trump said in a brief interview on NBC News that he didn’t know anything about the investigation by the Justice Department:
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.”
The pushback from Senate Banking Committee member Senator Thom Tillis, R-N.C., was swift. In a statement, he said that he’d oppose the confirmation of any nominee for the Federal Reserve Board of Governors, including the next chair, until this situation is resolved:
“If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Department of Justice that are in question.
“I will oppose the confirmation of any nominee for the Fed—including the upcoming Fed Chair vacancy—until this legal matter is fully resolved.”
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“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings.” sure just like Shaggy’s song It wasn’t me…either that or he will just say as many people are saying…
and the part about not very good at building buildings….man these people are just full of projection over and over again..
So $2.5B down the drain is OK?…not counting the cost over runs.
Real estate investments = “down the drain?”
maybe?
When you renovate and upgrade to moderns structural and safety standards a 90-year-old building with asbestos all over the place, including seismic upgrades, new shear walls, and blast protection, all-new wiring and plumbing, heating, air conditioning, ventilation, and fire-suppressing systems, etc., you’re going to run into massive surprises.
That’s why it’s often cheaper to tear down an old building and build something new. But these are historic buildings (there are three in total). Even Trump was impressed with the magnitude of the work, when he was touring the site with Powell, and said so.
Then there was the massive inflation shock: for non-residential buildings, construction costs spiked by over 40% from 2020 to 2025. So everything got 40% more expensive from the plans, just due to inflation shock.
“So everything got 40% more expensive from the plans, just due to inflation shock.”
isnt that poetic? That the Fed would be affected by their policies….like everyone else?
Did they notice or care? No skin off their nose……costs? what costs?
Inflation spares no one.
So the Fed home should be eye candy? Who cares about “historic” buildings?
Maybe Powell should have taken out a stated income loan for the work. Personally, I believe gov’t is bloated. For $500m I could have built quite the structure…and an energy efficient one to boot.
Yes, down the drain. The Fed should be setting a good example, not a spurious one.
Some one calculated that at 275,000 sq feet that is $21,818 per square foot.
That someone cannot do basic math 🤣
Why are you dishonest ly conflating the cost of the project with a DOJ investigation?
Spending lots of money isn’t a crime?
A DOJ investigation referred by Congress.
Spending lot of money is not a crime esp other peoples money or tax payers money.
JimL — conflating???
Spending money isn’t a crime, maybe.
Misleading Congress under oath, yep.
The U.S. Attorney’s Office reached out for MONTHS. “Hey JP how about a chat?” – Powell ignored it. No call. No meeting. Nada.
He could’ve picked up the phone. Sent a text, Nope
Instead, he waited for the next NORMAL STEP – a subpoena — then instead of a response to the Attorney, he made a political video with a bunch of noise. Talk about CONFLATION…
That’s not overreach. That’s consequences.
The real question, having worked on many gov’t projects myself:
What was the inflation multiplier the Fed used?
Bahahahaha
And precious metals are still running hot.
MS,while I wanted fiscal sanity am very happy I have been a large/in hand/long term stacker.
I will always succeed
Because I am insane!
Unhappiness is always running hot in these posts. The human condition I’ve noticed over my semi-long life. Wolf’s comments are reasonable, and appreciated.
(The worst are from ‘dang’. It must be a hard life. Glad it’s not mine.)
The Wall Street Journal Editorial Board has a piece on this matter:
Its title: ‘Lawfare for Dummies: Monetary Edition ‘
Criminal Indictment – Yeah, Right! They are untouchable. Hands off. All bark and no bite!
Yep there ya have it, renovations always go overbudget and over schedule…change orders rule the day. BTW I guess its ok the WH is being given a grand ballroom because its all private money yes?
I meant to add, show me a homeowner whose renovation didn’t take more time and money. BTW this was the renovation of an historic property I can only imagine what they found when they opened walls….I’ve been there and done that …building new is hard enough but renovation of an history building are impossible …
Who is surprised by this? It’s right in the middle of DC, on a river, and it’s a historic building. Only place in america more expensive to build or renovate like this would be NYC
Also – the Fed isn’t using any tax payer dollars to pay for this! Let them reno the damn thing with their own money
I don’t get why everyone is so up in arms
It’s DC sport.
How does the Fed piss away 1 billion dollars in cost overruns, let alone approving a 1.5 billion budget anyway? That alone deserves a full audit to see who got what when.
RE: Validity of the reason for a criminal probe
T$ needs to publish the Construction Contract. The scope of the agreement and the original award amount is critical to understanding cost overruns; as is the genesis of any such overrun.
That said, any state or federal project has lots of hair on it that doesn’t exist in a private sector deal. I am looking at a new Federal Courthouse deal right now – $265 a sqft (no dirt) – pretty cheap. Last state buildings that I saw were @ $450 a sqft (bear in mind this is at the capital so it is an homage to state power). I don’t know what the FED buildout total cost estimate was vs what the total will be with over runs – but even accounting for DC and all the all the’s – it if it is over lets just say $700 per sqft and there aren’t a lot of specialized improvements- yeah, that is probably an indicator of a problem (fraud).
Great information as always Wolf. Thank you.
I live in a land of $1000/sf construction!
Also, a historical building in my town that began as a “partial interior remodel,” has now resulted in the existence of two brick walls and the “restored” tower on the corner.
The story is fascinating because what used to be a building has become a cash incinerator. The scaffold and fencing that’s supporting and surrounding the site is a cost in itself, all while no work is happening.
I am sure, behind the scenes there are engineers, architects, contractors and government entities who are burning through cash, on the way to (re)-starting construction.
Search the nugget building in Telluride. The “art” of historical “preservation” is capital intensive.
Indeed. Which is why historical preservation is such a useful tool for people who want to make sure nothing new is ever built.
Following the Erdogan playbook of economics and politics.
Then again, Turkey’s inflation was all the way down to 30.9% in December YoY, so maybe we should copy them.
Hear, hear.
Depending on your situation, hyper-inflation could be your friend, or your foe. If it’s your foe, you could change your situation to profit from the biggest windfall of U.S. history.
The nattering nabobs of negativity are flipping out over the price escalation of precious metals in the last 10 hours. You can make that your friend. UGL, DGP and AGP.
Actually, they could copy the Peronist playbook. Print some money, chop a few zeros off and rename the next round, rinse & repeat. Then you can have 30.9% inflation per month, or if you do it right, per week.
I would have sworn the Commander-In-Coins actually said, “Hey, look at me. I’m Sandra Dee!”. It’s gonna be real interesting if the GSR drops all the way to 10. It’ll be even more fascinating about an hour later when the dominant species on the planet goes toward coackroaches about as big as a Buick. Rational is apparently a form of sandwich meat they’re not planning on putting in the lunchboxes of Whirlled Leaders this week.
And there was me thinking a Roachmobile was an elongated hatchback.
If the Justice Dept. is as incompetent at investigating Powell as it has been in delivering all the Epstein files, Powell may be in his job for a long time.
I was in complete shock by Powell’s statement. For as long as I can rember, the Fed has taken extrordinary pains to “avoid politics”. This was a master delivery of a raw, direct political statement, while “not making a political statement”, by emphasizing the independence of the Fed.
The Fed was/is conjoined with Wall St. What independence do you see?
So when they hiked rates in 2022 and the stock market plunged that was what?
Just like the executive branch leaves the Fed alone, for independence sake?
Can’t have crony capitalism without the “cronies”!
I’m waiting breathlessly for the investigation into why the DOJ ignored(er, slow walked) the investigation of John Harold Rogers, senior fellow at the Fed who has a Chines wife and leaked top secret data to the Chines from at least 2018. I wonder how many others are ‘side gigging’ at the Fed. I guess that kind of spying is OK? I mean, Powell was in charge and the buck stops with him. He was arrested a year ago and nothing but crickets since.
Speculative, but not unheard of. One wonders…
After the above incident, and the subsequent revelation that board governors were actively engaging in the markets (and who knows who else on the large Fed staff). Subsequently .gov agencies are looking about and find something untoward in the Fed reno contracting process. This discovery is via highly illegal means and as such not useful in the real world.
Hence, let’s beat on Powell, so that we can get a look at various Fed legal internals and oh… look what we stumbled upon. One suspects that it’s people on the other side of the current political fence that may be in trouble. Real or just of the egg on the face type.
Or maybe I’m spending too much time online.
Don’t know. I’ll take it up with Milton Friedman and his outlook on the largely incompetent FR.
Funny how the RINOs selected Tillis to be their messenger. Same guy who is being run out of politics in 2026.
This is another example of the trend for executive branch overreach that did not start with Trump. At some point there will be attempts to dial it and him back. I think that we are at peak Trump and there will be increasing push back. I remember Watergate. It was the GOP loss of an off-year House replacement election for a Michigan safe seat that precipitated the party consensus that Nixon had to resign or face impeachment and removal. If the November elections are the GOP disaster that some anticipate occurs, there will be governmental paralysis. A frightened GOP will not protect Trump from removal.
Roman senators killed Julius Caesar, but nevertheless Rome descended into dictatorship. Indeed, if my understanding is correct, the very motivation behind separating the powers of government was to prevent such an eventuality. Be in no doubt, the gift of the founding fathers is in extreme peril.
1st
Congress shall make no laws respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
2nd
A well-regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.
3rd
No soldier shall, in time of peace be quartered in any house, without the consent of the owner, nor in time of war, but in a manner prescribed by law.
4th
The rights of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or thing to be seized.
5th
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentation or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation
6th
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.
7th
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of common law.
8th
Excessive bail shall not be required, nor excessive fines be imposed, nor cruel and unusual punishments be inflicted.
9th
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
10th
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
The Bill of Rights is Old and Antiquated, and no longer pertinent in our new more modern society.
They need to be repealed and replaced with something that better represents our society now. Get rid of that old timer jibberish.
Impeachment and removal is one of the many gifts of the founding fathers.
Not so sure the rCongress would cowtow to the public will when “It’s turtles all the way down!”
I agree. I think Congress over the past 100 years, has abdicated its responsibility by delegating too much power to the executive. That’s why half the country is very unhappy after each Presidential election. I would love for Congress to permanently rein in the executive.
What I will not support, however, is reining in Trump’s power, and ONLY Trump’s, and leaving the administrative state in place so that future executive overreach will occur, just by a Democrat next time.
Reigning in executive power would be a logical party platform for the Democrats.
Unfortunately they are Democrats, so they’ll be running on abolishing ICE or something else only they care about. When they lose, they’ll both blame the electoral college and vow to run the same play again next time.
Yep, the madness of King Don will continue.
That’s pretty much what I’m expecting, yeah.
Who the hell thought the two-party system was a good idea?
Remember that in 2025, most House seats are non-competitive because of gerrymandering. Things were different half a century ago!
Anyone who has been looking at the markets knows that those markets are (heavily) overvalued. There was one indicator that was screaming of the top of its lungs “Market mania” and “Market top”.
Prediction: the FED will lower rates sooner than people expect. In spite of “rising inflation”.
Chicken shit response, by Trump, to being caught in a blatant act of corruption.
Well, another TACO tuesday coming up
$2.5 BILLION renovation?
2500 Million dollars for what?
But aside from that reality, we have a President that hates the Fed, it put him out of business in 1981. Broke.
He is one who also once promoted NEGATIVE interest rates.
As a real estate veteran he despises interest rates.
And he is pushing markets and assets for the critical midterms that, if lost, loses the House which cuts off his agenda, and likely he will be indicted once again.
I find it very disappointing to have a President (and a Treasury Sec) who cheer a lower valued national currency and push Cryptos. Unpatriotic IMO.
Steve Forbes once said “Strong countries have strong currencies”. I think he was correct.
When you renovate and upgrade to moderns structural and safety standards a 90-year-old building with asbestos all over the place, including seismic upgrades, new shear walls, and blast protection, all-new wiring and plumbing, heating, air conditioning, ventilation, and fire-suppressing systems, etc., you’re going to run into massive surprises.
That’s why it’s often cheaper to tear down an old building and build something new. But these are historic buildings (there are three in total). Even Trump was impressed with the magnitude of the work, when he was touring the site with Powell, and said so.
Then there was the massive inflation shock: for non-residential buildings, construction costs spiked by over 40% from 2020 to 2025. So everything got 40% more expensive from the plans, just due to inflation shock.
I miss the old days when Presidents would just physically assault the Fed Chairmen behind closed doors when they didn’t get what they wanted. Things were just simpler back in the 60’s.
Aren’t they planning a cage fight on the white house lawn this summer for commemorating the nation’s 250s anniversary? Maybe Powell will be invited?
Raises questions about why emerging markets should sell for lower multiples than the banana republic US.
Maybe he and Trump can be the fighters in the cage. Put it on Pay Per View and balance the budget for the year.
Well, in certain countries physical assault is not off the table. Just check out many rumbles the Taiwan government had in the past…it’s actually quite interesting and entertaining. Honestly, the level of insanity we’re withnessing, I wouldn’t mind watching the Senate do a WWE Royal rumble, probably get much more done than our current sorry state.
Guess we’re going to find out if Wall St has a stiffer spine than Congress.
BALL OF CONFUSION.
Authoritarianism and stagflation. We live in interesting times- again.
Articles today on a big furniture chain closing. …” one of the most severe housing market declines in recent history, alongside other macroeconomic factors and heightened cost pressures due to rising inflation, elevated interest rates, newly established tariffs, and a post-pandemic slowdown in consumer demand for furniture,”
And car costs:
…” the average monthly payment in the fourth quarter of 2025 hit an all-time high of $772, with the typical amount financed also hitting a record $43,759, according to Edmunds.”
Anyone can buy a nice new vehicle in the US for less than $30,000. Some of them are barely above $20,000.
Manufacturers, including all US automakers, Toyota, and others, have abandoned the below $20,000 entry-level vehicle, and even the below-$25,000 vehicle, because there is very little demand for it in the US. Americans don’t like to buy them, and don’t buy them in enough quantity to make real mass-production possible. That has been the issue for decades.
If the average amount financed is $43,759, it’s because Americans WANT to buy more expensive cars and can afford to buy them, or else they couldn’t get a loan/lease for them.
If Americans refused to buy those expensive vehicles, and would massively buy the cheaper vehicles, prices wouldn’t be so high. Prices are way too high. But Americans keep paying them. They need to stop paying them. But they’re awash in income and wealth and keep buying these expensive vehicles and paying these high prices.
Wolf, I agree with your analysis totally. Let’s not leave out the marketing of the big three car manufacturers. Rarely if ever are economical features promoted in adds and sale promotions. People are invited to the higher cost higher profit for manufacturers.
Heck, when we purchased our first Chevy hybrid Malibu in 2016, there was no advertising, sales people questioned us about our choice, they had few showroom inventory.
Not just the free money available led to increased prices. The tactics used by the car manufacturers are apparent. How many buyers actually use those huge tires, 4 wheel drive to climb sand dunes and mountain roads?
I look out my office window at the gravel parking lot next door. It’s like a youtube “crazy drivers on gravel” video. Yes, they have 4×4. Can they use it? No. Half the cars are massive SUV’s and I’ll wager the drivers are a) afraid to use the wx4 button or b) don’t even know how
So we can expect that you won’t be investing in Slate Auto anytime soon, then? 😄
Haha…
I rode up to my uncle’s house on my 1963 Honda 50cc Cub motorcycle. He said that looks fun. I said it is, and is even more fun that it gets 150 mpg.
He got mad, saying that it is so terrible that they could make a gas motor 60 years ago that could get mpg like that but not now. Saying about Government/ Oil company mpg suppression silliness.
I said they have been building them since the 50’s and still build them today. Most of the world uses them as their main mode of transportation. They have made more Honda Cub motorcycles than any other vehicle in history. And they never break.
I said you could have one too for super cheap, and get great mileage commuting to work and running errands and such. Problem is you won’t get one and ride it with any consistency, just like most everyone else in the USA.
He got even more mad, I kinda laughed and rode away.
PS… my daily driver motorcycle Suzuki DRZ 400 Supermoto is much more powerful and faster, but consistently gets 65mpg even when aggressive on the throttle. They have been making them nearly unchanged for 30 years straight. Brand new ones only cost $7,500 and a clean used can be had for about $5,000
I once read that it is estimated if 10 percent more people rode motorcycles, that there would be 30 percent less traffic.
Anyways…enough for now I suppose.
American car manufacturers have abandoned the small car sedan market for one reason and one reason only. Profits. Their margins are lower on these vehicles so they don’t want to sell them. Instead, they promote gas guzzlers to customers to make bigger bucks. The hell with what the customers need or want. Foreign manufacturers have filled the market. The American car manufacturers are all headed for bankruptcy. They deserve it. And when they do, I hope they don’t get bailed out again like GM in 2008.
Authoritarianism, ridiculous. Inflation is not rising, interest rates are at historical norms and you only pay $772/mo for a car if you’re financially illiterate or can afford it.
I wonder if Powell will stay on after being replaced as Chair, just to throw monkey wrenches into the ‘pay the debt down with inflation’ plan coming up. Might stabilize things a little.
That’s nice that Tillis is not cooperating with Mr. Trump, but he should be talking about ousting the president via the impeachment process, not simply refusing to confirm a Trump Fed nominee.
“Look at what an independent thinker I am!”
-a sycophant on 99% of issues
Tillis is not running for re-election, that is why he has found his spine.
That and the fact his polling in NC (actual voters) cratered a while ago.
Spine? A politician? Surely you gest.
Politics is a rough sport.
jest
He’s not running for re-election because he only finds a spine when the wind blows in a certain direction. Tillis wasn’t going to win again anyways, this just lets him walk away without an L.
The Fed has been out of control for a long time.
It started to dramatically expand with the bailout of LTC in ’98. Continued and peaked in ’08 with the giant bailouts of banks, investment companies (Goldman Sachs et.al) and insurance companies.
Adding to the follies they then bailed out the counterparties.
What’s next? “Who knows what evil lurks………The shadow knows”
LTC was bailed out by 14 private banks and brokers. The FED helped organize it, but the money was private.
The bailout – the Trouble Asset Relief Program (TARP) – was an act of Congress, passed by the Senate R: 34-15, D: 40-10 and House D: 172-63, R: 91-108 in bipartisan fashion and signed by President Bush.
I would not disagree that the Fed was out of control with QE since 2008, or at least from 2008 to 2023. But even if the FED had done direct bailouts and even if the FED was out of control with QE, it is not relevant to the topic in the article. Threatening criminal prosecution for a trivial matter like statements regarding a renovation is an attempt to intimidate an appointee (of the current president, it should be noted) who advocates a policy that the president disagrees with. It is not the proper way to solve the Fed that is out of control as an institution.
Incidentally, if Powell were to cave and lower rates, which is what the president wants to intimidate him into doing, it would actually move the Fed’s policy more in the direction of “out of control”, lowering rates into higher inflation.
My guess is that the Fed will “cave”.
That’s what the gold & silver is telling us now.
From $20 to $4,500 and $1 to 80. Next stop?
Good bye dollar.
You may or may not be right.
The counter argument is a supply side one focused on substantial GDP growth and lower energy costs. Trump is trying to target interest rates at the 10 year end of things where the Fed has less influence.
My only dog in this battle of prognosticators is that the Fed historically seems to exacerbate matters enhancing the pain of recovery.
More fundamentally, I am interested in the arguments pro/con for having a Fed Reserve in the first place. Others can consider the Sea Island aspects of all of this privately.
“LTC was bailed out by 14 private banks and brokers. The FED helped organize it, but the money was private.”
and the guarantees, agreements, and safety nets ….the “just in case” things the Fed offered in the background to those who stepped up?
If the Fed “organized” the bailout, it is extremely likely that they made some promises.
You just brought facts to a slogan fight.
The Fed and the Federal Government has been out of control for decades now. Each entity supports the other’s expediant decisions.
The vast majority of America’s major political leadership is based on expediency….keeping the spinning plates up in the air. And this directly reflects back on the citizenry who vote for this.
Fourth turning stuff. America has gotten fat, dumb and happy. Happens to all societies after too much ease. “Democracies” are no different and are not immune.
Trump/Bessant’s plan is to run the economy HOT (increase GDP), monetize US gold after it reaches $6,000/ounce (equals ~$2T for the Treasury to spend on seeding critical projects) and hold deficits down relative to GDP.
It will increase inflation (no question) and really hurt the bottom K of the economy. Top K will do well with rising stocks and salaries roughly keeping up with inflation.
They are desparate to get Powell out so they start ramping down short term interest and other policy twists to support above.
My opinion, is that this approach will backfire down the road.
“independence of the Federal Reserve”
The most ridiculous statement in all of it is this one.
Sounds like he learned from the Comey indictment not to publicly say the charges are politically motivated.
I really don’t know how this will play out in the end. Clearly he wants to Powell out so he can nominate a replacement. However, manipulating interest rates whether it’s credit card rates or the Fed funds rate will have undesirable consequences. Even if Trump is somehow successful at lowering mortgage rates, housing will just get more unaffordable. It doesn’t solve the insurance, property taxe and HOA issues that are eating up home owner dollars as prices increase.
The problem is simple. I’m renting a condo in Orange County for a month. Two units are for sale in the complex. Payments for a two bedroom apartment less than a mile away are $3000. With 20% down, current rates, property taxes and HOA, it’s $4200-4500 a month. That’s a problem rates won’t address because we’ve seen this play out before. It’s far better to rent and not take on the liability.
Remember all the haters who said he was a spray tanned man baby, incapable of learning!!!
Ha – I bet they feel like idiots now
Without accountability there the Federal Reserve is not independent, it’s a political entity plain and simple.
Under Powell the Fed’s monetary policies from QE and NIRP to the Biden transitory inflation have been spectacularly flawed.
Questionable mortgages, insider trading, forced board resignations? Why, given that recent history and allegations of malfeasance is anyone surprised the DOJ is issuing subpoenas to investigate the renovations and Powell’s Congressional testimony.
If it were your house and halfway through a renovation project the contractor unexpectedly billed you for twice the original estimate, what would you do? Smile and happily pay? Doubtful. Or would you fire the contractor and hire a lawyer?
Jay Powell in my estimation a nice avuncular old man. So was Arthur Burns, and Joe Biden for that matter.
Best wishes to all.
When you renovate and upgrade to moderns structural and safety standards a 90-year-old building with asbestos all over the place, including seismic upgrades, new shear walls, and blast protection, all-new wiring and plumbing, heating, air conditioning, ventilation, and fire-suppressing systems, etc., you’re going to run into massive surprises.
That’s why it’s often cheaper to tear down an old building and build something new. But these are historic buildings (there are three in total). Even Trump was impressed with the magnitude of the work, when he was touring the site with Powell, and said so.
Then there was the massive inflation shock: for non-residential buildings, construction costs spiked by over 40% from 2020 to 2025. So everything got 40% more expensive from the plans, just due to inflation shock.
But a criminal investigation implies something further than a project going over budget. The implication is that Powell somehow lined his own pockets with bribes or contractor money. I will remain open minded until some evidence emerges, but until then the most logical explanation is political retribution. I mean, there’s already an established pattern for that default explanation.
Nonsense. the criminal investigation is about what Powell told Congress in his testimony in June. They’re tying to investigate him for lying to Congress.
At least read the first paragraph.
Haven’t read the transcript, but did JPow personally guarantee the contractor’s estimates or swear under oath to keep the project under budget?
If the investigation is about budget overruns, as we’ve been told, then what exactly is he accused of lying about? What could he possibly have said? Perhaps the DoJ needs to chime in and tell us what all this is about?
There were no consequences from Congress regarding the construction project. Powell gave his prepared remarks before the Senate Banking Committee, and then Senators asked him a bunch of questions. And nothing ever came of it. They didn’t find any wrongdoing.
The investigation now by DOJ is about Powell lying during that testimony.
No mention of Billy Pulte?
“… is said to have incited” the DOJ investigation…
Rumor based on a source at the DOJ. Trying to deflect some of the fallout?
But it would make sense. Pulte and Bondi are the two biggest top-dog goofballs in this administration
Contenders for sure but for the prize they are up against RFK Junior.
A science denier in charge of medical science?
I remember seeing him on TV crossing the stage to endorse Trump and wondered why Trump would want THIS guy’s endorsement…it should be a negative for the campaign.
Lots of errors can be corrected without too much damage. Dialling back a host of vaccines is the opposite.
but he pretty much nailed it with his fight against added sugar and manufactured food — despite massive lobbying and backlash from those industries. If Americans followed these guidelines, we’d be a much healthier nation.
Wolf, I’m quite surprised to see you defending RFK. The guy saying soda and candy is bad for you while also pushing antivax lies and copious amounts of pseudoscience is doing far more harm than good.
We all know living off Mountain Dew and Skittles is bad for you. This moron has outright denied that HIV causes AIDS. His entire platform is just milking anti-establishment and anti-intellectualism rhetoric to promote whatever bro science pops into his hollowed out brain. I know the medical world probably isn’t near and dear to an economist but RFK is a complete and utter stooge to anyone in the medical field. He is universally hated by anyone educated above the level of RN.
Good lordy. I didn’t defend “him.” I didn’t say he is a good or smart guy or a great leader or whatever. I defended his stance on nutrition. Nutrition is hugely important to the health of all Americans. Many of the health problems Americans struggle with are due to bad nutrition, starting when they’re kids. And I salute RFK’s efforts fighting against added sugar and manufactured food, against the ferocious opposition of the sugar lobby and the food lobby. I salute his efforts to put veggies, healthy oils and fats, fish and other proteins and nuts and seeds up higher on the food pyramid, and simple carbs (white bread, white rice, etc.) nearer the bottom. He nailed it on food, that’s what I said. Don’t twist into absurdity what I said so clearly.
Trump has always had a weak spot in his choice of personnel. It was a constant issue in his first term also.
That’s because he’s casting a reality TV show, not running a country.
Gee, I miss the days when the Joe Puppet was Pres.
Dd they ever figure out who was writing his lines?
RFK has been doing an outstanding job. This was Trumps’ best appointment. It’s about time someone was concerned about the terrible food that is thrust upon our children and everyone else for that matter. I was in my local grocery store the other day and 85% of the products sold were processed food and junk food. I told the manager that they’d better start carrying more healthy food if they wanted my business. Even if they lost money on some of these products, it was worth it in the long run. I told him I’ve been going to a high end grocery store lately to get more healthy food. I can afford it. But some cannot. So, we are in a society where those with the means get a good diet and those without the means get junk food. RFK is trying to address this. Good for him.
Trump’s brains are just fully leaking out of his ears. He also seems to think his tweet about 10% credit card rates is law. The people with Trump Devotion Syndrome will keep making every excuse for his behavior because people who were scammed can’t stand admitting it.
People that support Trump don’t have a syndrome, as opposed to people that oppose him who have the derangement. I believe pro Trump people will generally admit and converse about his bad policies. If you try to debate the mostly deranged liberal progressive, they will generally walk away from the argument instead of admitting that they are wrong.
You obviously don’t lurk the same comment sections I do. ICE is an unmitigated disaster, and will cost the Republicans the midterms, but you wouldn’t know that from the poorly articulated and illogical comments that come out of MAGA nation.
So called “TDS” is a normal reaction by many Americans to a very abnormal situation in which they find themselves, a situation they hoped would remain in the realm of dystopian fiction. Calling them “deranged” is a way to dismiss their concerns.
Yeah, men playing in women’s sports and using women’s bathrooms while allowing illegal aliens into the country is a perfectly normal situation. Septum piercings and peacefully burning down buildings is a perfectly normal reaction.
Got it!
There should have been an investigation into keeping interest rates repressed when inflation was raging.
Bingo. Too Big To Fail anyone?
Imo, while there are a lot of theoretical ways to reduce the deficit, if that is even a goal, but the only practical one, while painful, is to inflate it away. Not even sure that will be possible given how unpopular that would be. Another potential option would be to take Germany’s approach compared to Frances approach post cold war where Germany essentially froze wages to fund reconstruction while France just kept piling on debt, which was fine, kind of, until they lost monetary control to the Euro, which Germany insisted on some pretty strict rules. Of course, now they are tied together which makes it more interesting.
In short, Uruguay is looking good right now!
Punta Del diabolo is spectacular this time of year. Hell, everything from Jose Ignacio to chuy tops any coastline in Los estados unidos. Assuming you’re not a fan of chain restaurants and their obese patrons.
If the US dollar lost 50% of its international purchasing power tomorrow, as it probably should, it would wipe out the American standard of living.
However, the flipside is that our national debt would be essentially written down. We’d be at a new starting point, less encumbered by debt. If Argentina can sell bonds for 6.5%, then we have a post-devaluation future too.
Perhaps all this is for the best. A decade of 5-10% inflation and growing GDP might bring the debt/GDP ratio down a little, and set the stage for a resurgence. Anything is possible.
More likely, we’ll print money and hand out tax cuts and fight oil wars until we have the kind of crisis Ray Dalio talks about.
The only scandal is that we aren’t talking about these choices and risks openly. At one point on the campaign trail, Trump said he favored a strong dollar – and people believed him! Your average rube has no idea why his life is so expensive.
Actually, we face hard choices. Keep the USD strong to help our exporters, but at the risk of a Minsky moment. Or, continue to pursue a weak dollar plus interest rate suppression policy to manage the national debt.
I think the clues available so far indicate the government is going with the second option. Find stronger currencies abroad and invest in them instead of the USD!
“If Argentina can sell bonds at 6.5%”
I am not familiar with Argentinian, government bonds. I AM familiar with “real yield” calculations.
Inflation is over 30% yoy in Argentina (down significantly from the recent 200%!).
6.5-30 is a deeply negative real yield. The US 10yr is over 4, and official inflation rate 2.7? The US currently offers a positive real yield (even the 3mo is still positive!).
Argentina sold USD-bonds at 6.5%, not peso bonds. Those USD bonds are exposed to the same inflation risk as US Treasuries.
But unlike US Treasuries, Argentina’s USD bonds have a very high likelihood of defaulting, as Argentina serially defaults on its USD bonds, as a matter of principle it seems.
Got it. Sounds like buying a falling REIT ticker because of some huge “double digit dividend” history.
Usually the next thing to fall is the dividend.
Of course in this case the stated yield wouldn’t change, but the payment could just stop someday.
Knew this wasn’t possible in an Argentine peso bond so looked it up:
AI Overview
Argentina recently issued a new US dollar-denominated, local-law bond with a 6.5% annual coupon.
They have to pay it back in US$ equivalent.
This is mostly about scaring away any future Fed candidates that aren’t willing to be a Trump puppet. Could backfire if current Fed members push back in defense of Powell.
My thought exactly.
Seems like an odd escalation when there are only 4 months left in JPow’s term as FOMC chair.
The real intimidation targets are everyone else on the FOMC.
“The Federal Reserve is currently undergoing a significant renovation of its headquarters in Washington, D.C. The project was initially estimated to cost around $1.9 billion but has since escalated to approximately $2.5 billion. This increase has raised concerns and scrutiny regarding the management of the project.”
Is this true?
If so, why does anyone keep their job(s) when the taxpayers’ money is mismanaged?
It isn’t mismanaged, estimates rarely match the finished cost. Construction material prices have risen dramatically over the last few years, as has energy, neither of which was expected. The building is a century old, so there were always going to be rises. Estimates are usually a baseline, sadly, but there seems little real evidence of endemic mismanagement here, just the reality of an evolving project.
If you want examples of abusive mismanagement, you only have to look at the Pentagon (Constellation Class, LCS, F35, FCS, Comanche, EFV, Zumwalt, the list is endless.), or DOGE.
Anyone who knows big construction knows that this has been happening to almost every project out there. Construction costs skyrocketed in the last 5 years, blowing up almost every major project’s bottom line. This is a big problem with many complex causes that really need to be fixed, but it’s not at all clear that it has anything to do with the specific planners at the Fed.
It’s pretty disappointing how many people read Wolf (and presumably understand him) and buy into blatant nonsense.
I somewhat agree, but not completely, with your thesis.
Inflation, which the Fed called transitory, is one of the causes of the overruns, as labor and materials costs are beyond the Fed’s control, but better planning and project management can significantly influence overall expenses.
My experience with Federal contracts, in many cases, leads me to believe that more stringent oversight (more competitive bidding, better planning to see potential structural challenges, more monitoring, pushing more risk to contractors) would have helped in this case.
I refuse to accept that we just say oh shucks, it’s only a billion more…
ps look at the F35, and many of my points may become more relevant
I just read some inside intel from Home Depot that they will raise prices again in the second half of the year. So much for tackling the “affordability crisis”.
Anyone not in the top 10% has stopped doing home renovations. On one hand, that’s good because we’re deporting all the labor for those at a rapid pace. On the other hand, it’s severely damaging the mom & pop businesses that relied on that work. They’re busy blaming interest rates, but realistically it’s the cost of materials.
The labor force for residential construction does not Only consist of employees that are at risk of deportation.
Construction projects were completed before their arrival, and will be completed if they leave.
Additionally, I self taught the the skills to remodel my entire house myself, so that I would not have to pay others “labor can be one of the biggest expenses in construction projects.” As high as 75 percent depending on the project.”
With that said “yes” material prices have soared in the last handful of years.
Additionally, yesterday I paid an electrician $550 to install a new 220V circuit and outlet in my house because I did not have the time. I do not believe he was at risk of deportation.
Cost:
Labor $300.00
Materials $250.00
A Guy –
Oh it is very true.
Good question for Minnesota…
Just look at the price of gold. It is telling you something is wrong. Could be a lot of things wars, FED policy, huge new money supply( BitcoinS, government debt. Maybe all the above.
There are/were speculative manias all over the place, including stocks, crypto from day one, housing (condos, LOL!), CRE, bonds even (2020!), gold, silver, etc. Manias never “tell you anything about what’s wrong” except for one thing: people LOVE manias and keep piling money into them and thereby make them worse, until the manias run out of new people to pile money into them and blow up. The prior gold manias also blew up, including the one through 2011. But until then, manias make you lots of profits, and you get to keep those profits if you get out in time before the mania blows up, which is why people love them and keep touting them everywhere, including here.
The big picture looks like:
Tax cuts / deficits
+Wealth concentration
+Demographic graying
+Government intervention to snuff out recessions
+Interest rates expected to be below the rate of inflation
+Weak dollar policy
—————————————-
An everything bubble
Until this configuration changes, we can expect more of the same, so it makes sense to stay invested. I also hedge my stocks with options, because I don’t think I’ll realize it quickly enough when the music stops.
So you’re saying that central banks are acting maniacal in their extensive gold purchases over the past 5-10 years Wolf? Possibly, in part, but perhaps they have been diversifying into an asset class that is not controlled by another sovereign power.
1. Neither the Fed, nor the ECB, nor the BOJ, nor the BOE, nor the BOC, nor…. have bought any gold whatsoever in a very long time. The central banks that bought gold are doing it with foreign currency they got via their trade surpluses and they have to do something with that foreign currency (they also bought Treasuries and other securities with it). And some central banks bought gold from their country’s own gold miners. In part those central banks are doing that to be able to support their own currency when it weakens too much.
2. For goldbugs, stocks doubling is a mania, but when gold doubles its pure rational necessity? 🤣 What happened to gold after the last mania, which ended in 2011? Gold plunged by 50%.
3. Look, people are trading gold to make money. They’re knowingly riding up this mania because that’s when you make money. And they’re planning to get out when the mania is over, but not before. Manias are a very profitable trade if you can get out in time.
Tech Bubble Update: Top eight stocks –Market caps of Nvidia, Google, Apple, Microsoft, Amazon, Broadcom, Meta, Tesla– now total $23.32 Trillion, which is approaching 40 percent of the total market cap of the S&P 500, which is almost $60 Trillion ($58.936 Trillion as of Friday’s close.)
I got in on the MSTR mania and made close to a 100% profit selling LEAP covered calls. Bailed out when bitcoin started to crash and took my profits. Now I’m riding the gold mania with GLD stock selling covered calls and cash covered puts. But the mania will end like Wolf says, just have to have a bail out strategy.
I thought commander in chief was too busy trying to overthrow governments of 5 or so sovereign governments to be messing about with this. Impressed how much he can take on.
It’s that Elon Musk energy. Allows one to draw multiple salaries at the same time, assuming one can convince other people to pay those salaries.
This will be the first documented case of a historic building rennovation running over budget, so it will be a slam dunk for the DOJ. Trump promised to sell his Qatari jet to make up the difference though, gob bless
The FED shouldn’t have censored its Ph.Ds. They no longer correspond with the public on their own views.
A new level of Kabuki theater. Not sure this is a good thing, but somewhat expected as the “rule of law” has become a joke over the years. The response to 2008 FRAUD should have made that clear to everyone.
It’s not a justice system so much as a “just us” system…
Hmmm. I wonder what the banks that own the Federal Reserve think of this business ? ?
Does anyone know ? ?
Banks don’t own the “Federal Reserve.” the Federal Reserve Board of Governors is a federal government agency, and Powell is the chair. He was first nominated by Trump and confirmed by the Senate, and then re-nominated by Biden and confirmed by the Senate.
Banks own the 12 regional Federal Reserve Banks, such as the Dallas Fed, and the NY Fed, and the San Francisco Fed.
The real issue is Trump saying he did not know about it. Does anyone buy that?
I would venture this is another nail in the coffin of the us dollar.
UUP is down -0.26% today.
From The Hill:
Sen. Lisa Murkowski (R-Alaska) called for a congressional investigation into the Justice Department after the Trump administration announced a probe into the Federal Reserve, calling the move an attempt to coerce the central bank to lower rates.
Murkowski said she spoke with Federal Reserve Chair Jerome Powell on Monday morning and threw her weight behind Sen. Thom Tillis’s (R-N.C.) decision to block any of President Trump’s nominees to the bank until the matter is resolved.
“After speaking with Chair Powell this morning, it’s clear the administration’s investigation is nothing more than an attempt at coercion,” Murkowski said in a statement. “If the Department of Justice believes an investigation into Chair Powell is warranted based on project cost overruns—which are not unusual—then Congress needs to investigate the Department of Justice.”
Trump already distanced himself from it. He’s going to let that blow up into Bondi’s face.
Yes, Bondi is on the shi* list, you know how well she’s doing by her bosses inept response.
If any of these people learned ANYTHING from Trump’s first term it should be the loyalty only flows in one direction. He’ll throw literally anyone under the bus once they become inconvenient. Even his children know it, which is why they are keeping a solid distance this time around and quietly making their own fortunes by picking up the table scraps.
Bondi is no doubt digging furiously through the Epstein files, hoping to find Powell in there somewhere.
Perhaps this is where AI could really come in handy! (at least for generating Powell/Epstein memes).
The Republican Party is not yet in open rebellion, but the discontent and vigilantism is building over foreign policy and Fed coercion.
Democrats should be making hay of this and predicting hyperinflation, but they are Democrats so they cannot take a political profit when it is handed to them.
That’s historically true, though the Dems.,all and all haven’t been impeached or found guilty of fraud in the past. The Republicans will always point the finger at someone else. It works at times.
Interestingly, the CME’s Fedwatch tool shows NO CHANGE in the odds of a January rate cut compared to Friday’s odds, and slightly higher odds of no cuts at all by June 17!
The market is taking JPow at his word and assuming the FOMC will not be manipulated.
Whether you like Trump or not, one thing seems to be universally understood about him – pretty much anybody associated with him, unless blood related, either ends up in jail, or disgraced, ostracized, financially wounded, jilted, or disgruntled to name just a few. Multiple combinations of the above can also be found. Jerome is just the latest guy to experience it.
1. It’s clear that Trump wants inflation to lower the debt / GDP ratio so he can borrow more to run his “projects” (like $1.5T military budget). Mini-Argentina style. (Argentina gets rid of its debt every few decades, by defaulting and/or hyperinflation, then does it again.) [Which I do not support, to be clear.]
2. I used to believe that FED independence is good because it prevents / controls inflation. Not any more. Having FED under Treasury would make it clear to everybody who is responsible, instead of some saying Treasury and others saying FED. So I am neutral on that.
3. I’ve have seen people fired for major cost / time overruns on high-tech projects. Which are also hard to estimate. I do not see why high-level government bureaucrats (FED Chair is one of them) should be exempt.
4. I think the whole FED board should be fired for causing runaway inflation a few years back. Their job is to prevent it and when they fail, they should be shown door. Just like in a private industry.
5. That “helicopter Ben” and Yellen that kept QE support Powell should be expected. That does not change my opinion.
The majority of Argentine debt is in USD, not ARS
Regarding #4: How much of the brief inflation spike was due to the helicopter money that passed Congress on a bipartisan basis, twice, and was not vetoed twice, first by Trump and then by Biden. Should the Fed be blamed for their part of the causes?
I have been following this since June of last year when Trump tried to wrongly fire Lisa Cook. That’s when Powell all of a sudden changed his mind on interest rates. I knew all along the Fed was being pressured by the King. He is one of the most dangerous presidents we have had in a long time. I, unfortunately, voted for him. I don’t think this country can handle another three years with this tin pot dictator.
The corrupt stonk market is up a little today after being down. And people think it represents true wealth lol.
1:04 PM 1/12/2026
MW: Why stocks are rising despite Trump’s new pressure campaign against Fed’s Powell
Dow 49,590.20 +86.13 0.17%
S&P 500 6,977.27 +10.99 0.16%
Nasdaq 23,733.90 +62.56 0.26%
VIX 15.09 +0.60 4.14%
Gold 4,602.60 +101.70 2.26%
Oil 59.52 +0.40 0.68%
Eh the SP500 is doing the inverse of USDX. Look at it in Euro and it’s clear what a mirage 2025’s performance was.
As expected, guess this is another nothing burger for the market, another wind being thrown to caution on the never ending FOMO optimisim…market barely moved at all and in fact major indices is up slightly….yawn…rinse and repeat….
At this point I don’t know what would cause the market to collapse. Trump being allowed by SCOTUS to fire voting fed members wouldn’t. Cut ratings to 0 wouldn’t. Invading Greenland by all means is teetering on a worst case scenario but I doubt the market would do anything worse than dip red for a day then rally the next day.
Topsy turvy world we live in. Although I will say, I think an invasion of Greenland is the catalyst point. There’s no coming back from that. The US will be on a path of nearly complete self destruction on the global stage.
“I don’t know what would cause the market to collapse”
China takes Taiwan
Russia Ukraine…….never ending? What’s the game here?
and a number of other geo political events…all on the edge of happening…
“I don’t know what would cause the market to collapse”
If I have to guess if 3I/ATLAS turned out to be an alien invasion (which has been confirmed to be just another comet) or we have a Don’t Look up kind of end world scenario….maybe the market might collapse…but honestly even then I give it 50/50 FOMO and BTFD crowds will still stick around..
Laughably excessive PE multiples in the hundreds. Tesla right now has a PE multiple of around 300 which means it is valued for 300 years forward based on current earnings which are falling.
Since Powell’s going to be out of there in just a few months, I see this as a message to the next Fed Chairman. Toe the line and do exactly what the big man-baby in charge wants or face the consequences.
Powell will likely not leave for two years after he steps down from the chair position, now that Trump did this (predictable) stupidity. Treasury secretary Bessent has said as much.
He’ll be out as Chairman, but his term on the Board of Governors of the Federal Reserve goes on for another 2 years.
As I understand it (open to correction) one accusation against Powell is that he lied on oath by denying that his renovation plans included some expensive luxuries for the top guys at the Fed.
Yet nobody I’ve seen has discussed this point. The discussion has been mainly “Trump is Hitler” versus “Oh no he isn’t” or, on this rather superior blog, “construction costs overrun the whole time”.
Why no assessment of the evidence?
You’re dragging some internet bullshit into here that has been debunked many times. Here are the answers to your “expensive luxuries for the top guys at the Fed”:
https://www.federalreserve.gov/faqs/building-project-faqs.htm
Mind boggling.
Two things…
First, Trump has been accused of siccing the justice department on somebody who doesn’t bend to his will.
A president doing this is a big deal. A lot bigger than the cost of asbestos abatement or renovating an old building or the idea that somebody should have raised or lowered rates earlier, or whatever.
Second, in all of the responses about this that I’ve seen from Trump‘s supporters (and even just bystanders), here’s the one I still haven’t, and pretty much never do, seen:
“ nope, that doesn’t sound like Trump. XYZ is pretty bad, and he just wouldn’t do something like that.”
Of course he would, and everybody knows it.
“For my friends, everything; for my enemies, the law’ – Óscar Benavides
Keep that in mind in understanding the MO of this administration, although I would argue they go many steps beyond the latter part with the law
Wolf, your comments on manias are correct; however, are precious metals now in a mania?
In past decades, western central banks intentionally suppressed the price of gold. This is well documented. The reason they did this was to discourage any attempt by others to raise the importance of gold as a store of value, thus challenging the dollar. Afterall, the people in control were intentionally inflating the dollar.
Times change. For many years now, China, Russia and many BRICs countries have been shifting to gold in their reserves to counter the loss of value in the dollar. This also is well documented.
China and BRICS have moved and are close to a system of trade settlement that excludes the dollar and offers final settlement in gold.
These are huge changes to the recent past structure of full dollar hegemony.
It sounds as if you do not believe this transition will continue towards gold. What I recommend to friends and family is to hedge this possibility by owning at least 10% real gold (not ETFs; although better than nothing). You could be right in that dollar hegemony will continue and possibly increase. But strong forces are at play in the world that didn’t exist in the past gold “bubbles” or “manias”of our lifetimes.
Trump represents the kind of chaotic change that occurs in 4th turnings. It is likely he is going to not get everything right. So far, I would say recent actions have alienated most of the world with respect as to how they view the US. Could be wrong; maybe they all respect (fear?) us more. But likely he’s helping dig us a deeper grave with respect to the past supremacy of the US dollar. IMO.
Jeeesus, the BRICS the BRICS the BRICS… Except for the C (China), the BRICS have toilet-paper currencies against the USD. And some of the BRICS are shooting at each other across a common border (the I and the C).
The Brazilian real is up +13.9% against the USD over 1 year.
The Russian ruble is up +29.95% against the USD over 1 year.
The Indian rupee is down -4.49% against the USD over one year.
The Chinese yuan renminbi is up +5.59% against the USD over one year.
The South African rand is up +16.52% against the USD over one year.
So aside from the Indian rupee, it’s the US dollar that is looking like a toilet paper currency. A basket of BRICS currencies invested in their local sovereign bonds or bank CDs would have beaten US stocks, which goes to show a lot of the price of assets rising is actually the relative value of the USD declining.
Sources from xe.com.
In 2011, the BRL = 60 US cents.
Today, the BRL = 19 cents.
-68% against the USD in 15 years.
In 2011, the RUB = 4.3 cents
Today, the RUB = 1.3 cents
-70% against the USD in 15 years
In 2011, the INR = 2.2 cents
Today, the INR = 1.1 cent
-50% in 15 years
TOILET PAPER CURRENCIES AGAINST THE USD
I posted an article with this chart the other day:
https://wolfstreet.com/2025/12/31/long-view-of-the-sp-500-stock-markets-of-canada-japan-china-hong-kong-india-uk-france-germany-italy-spain/
USD is used to settle between 60-80% of global transactions, on one or both sides. This is hard to track and is an estimated range.
All fiat is a bit of paper, so we try to keep ahead of the drain.
I’m just saying it’s time to keep our eyes open for a change in the old dynamic.
The US is no longer the most responsible currency issuer in the world. Maybe 15 years ago, but today Greece can borrow at lower rates than the US because their government is considered more credible!
If the trend toward fiscal chaos continues, we’ll be no better than the BRICS.
All currencies can become toilet paper together.
The US Dollar is used in more than 80% of all global transactions. Gold is used in practically none and the total value of all gold ever mined is less than 1% of global assets, and the amount of gold held/owned by central banks is only around 35,000 metric tonnes which is up on 3,000 metric tonnes from around 10 years ago and the most all of the rest is owned in the form of jewelry in private hands. There is NOTHING that can even begin to challenge the use and supremacy of the US Dollar.
Yeah, this!
I have made (and lost!) money on miners and metals.
One of the first things I bought before I had my daughter was physical silver: what an ill- timed purchase!
I had debated buying a few BTC at the time (which WAS about 2011). Silver tanked, and BTC was about $200/coin. The crypto space seemed “too complicated.”
I had never even opened a brokerage account and coinbase was the most prominent way.
Needless to say: I struggle. I have since bought some more physical silver and missed the opportunity to buy physical gold in the ‘22 pullback.
I use USD daily.
Does anyone remember the 60’s bewitched episode where Darren’s ears double in size with every lie he told? Hilarious just like Powell’s address.
Glad to see the Federal Reserve getting pressure for the nonsensical monetary policies of the past decade. This is not just about current interest rate policy. It’s also about the irrational short-sighted QE policies of the last five years. Treasury Secretary Bessent says the Fed left QE in place way too long after the pandemic. The longer it stayed, the more it distorted asset prices, spending, inflation, and wealth concentration. In his view, the correct move was to eliminate the QE quickly after the economy had opened up again.
I agree 100%.
But Powell isn’t being investigated for any of that.
Keep your eye on the ball…
Read Bessent’s essay. This fuss is about broader monetary policy.
The silly DOJ investigation is obviously just a tactic. The goal is to cut the head off the MMT beast.
Most everything here is just bizarre noise and TDS.
This is not about the $700M overrun but that is HUGE and not your typical duplex Home Depot change order job.
Markets didn’t crash. They hit record highs AGAIN!
Yes, Fed Chairs are political. Powell included. Pretending otherwise is childish.
This also isn’t about a budget – It’s about establishing Powell as untrustworthy or incompetent, not about jailing him.
So pick a reality:
• He knew things and downplayed them and misled Congress
• He didn’t know and spoke anyway and that’s incompetence
• Smoke and mirrors and the credibility problem is the same
If it can be shown he misled Congress, didn’t understand his own project, or spoke beyond what he verified, his credibility gone — not just as Chair, but as someone who deserves any continued seat at any table.
You don’t need a conviction for that – You just need enough doubt to make his continued leadership politically and institutionally undesirable. FAFO
And maybe private elevators, dining rooms, marble, and a rooftop terrace stopped sounding “essential” once an Administration with a pulse came on the scene.
Early (2021) planning documents for the Fed’s renovation did describe features such as private dining rooms, private elevators, rooftop terraces, new marble, and water features –
Source – Time Magazine not some internet BS –
“Source – Time Magazine not some internet BS”
Did you mean to say “Source – Time Magazine BS not some internet BS?”
Wolf – Time Mag BS and Internet BS – OK
All were in the ititial plans and not BS. Powell’s testimony to Congress (2025): He claimed those features were removed as plans “continued to evolve”.
Just saying.
You are correct about it all being TDS. Trump Devotion Syndrome.
What is crazy about the cultists is that they are not even trying to hide thier double standards anymore.
Use better sources of information. The ones you are currently using are taking advantage of you.
Accusing those with whom you disagree of having “TDS” is a way to dismiss very normal concerns about a president who, in the historical sense, is acting very differently than what many Americans are accustomed to having a president act. You are starting out by just dismissing those with whom you disagree as being crazy, so that you don’t have to consider their points.
JimL – Trump Devotion Syndrom
Marvin Gardens – so you don’t have to consider their points
Both of you are way off with your replies –
I simply shared my view and pointed out that many posts—some even completely off-topic—read more like anti-Trump rants (often labeled TDS) than reasoned discussion, lacking substance or logical relevance.
Here are some sourced facts –
The U.S. Economy Is BOOMING!
GDP up 5.4% – crushing expectations
Inflation below 3% – prices cooling
Tariffs didn’t kill growth – exports strong
Gas & oil down – more savings for families
Tax season = more fuel for the fire
70M job openings for those choosing to not work – wages rising
Stock market soaring
Rates easing & housing more affordable
This is the perfect storm: low taxes + strong wages + booming economy = historic momentum.
? for you all = Should rates be lowered?
Do you want deflation?
Is 2% a real target or is 3% the new normal all other things considered?
The lie that Powell should have really been indicted for was the one about ample reserves chasing scarce assets being unequivocally better than scarce reserves chasing ample assets.
my brother in law said “I’ll never be a millionaire!” and I said ” Jay, you will be a millionaire someday” “but milk will be $43 a gallon” .
America’s banker Jamie Dimon issues dire warning to Trump: ‘It will backfire’
Jamie Dimon defended the Fed as he spoke with reporters after his bank issued its fourth-quarter earnings results on Tuesday.
Couldn’t happen to a more deserving person/entity. Watching Jerome Powell the worm squirm is hilarious. Maybe this cheeseball will get some balls and actually raise rates next meeting. Do something right for a change, a-hole.
What about The prosecutors who have been fired or resigned because they refused to prosecute people without enough evidence. Collateral damage? It only matters if it hits close to home? Pattern of events. Curious how wolf will describe CPI numbers today.