Only 37% of Americans say they trust Jerome Powell to make the right calls for the economy, according to Gallup. That’s it. Not even four in ten people. The Fed Chair, who is in his second term, just posted his second-worst approval rating ever. And this isn’t just a blip. The only time confidence in the position was this low in the last two decades was in 2014, when Janet Yellen was running the show. Back in 2020, Powell had 58%. Now, barely anyone’s buying what he’s selling. The Federal Reserve isn’t just dealing with inflation and unemployment anymore. It’s dealing with a public that no longer believes it has a clue what it’s doing. At the Jackson Hole symposium, Powell stepped up to deliver what’s his final headline speech as chair, just a the labor market is slowing down, which usually calls for interest rate cuts. But inflation is still alive and kicking, and the Fed doesn’t want to fuel it. Powell said an “adjustment” might be necessary, which, in Fed-speak, is code for: we’re about to cut. Powell prepares cuts as markets brace for political pressure The markets weren’t ready for that. They were expecting another boring script. What they got was Powell hinting loud and clear that rate cuts are coming, probably next month, and maybe again in the two meetings after that. The dollar tanked, bonds surged, and stocks rebounded at the end of a rough week. But there’s a risk baked into that move. The August job report doesn’t come out until September’s first week. If hiring picks up again, the Fed will have already slashed rates into a strong job market while inflation is still above target. That would be a misstep, according to Bank of America analysts, who warned that the Fed “would risk a policy error if it were to cut rates” too soon. Meanwhile, minutes after Powell’s speech, Trump put a target on Lisa Cook, one of the Fed’s board members. Wearing his red “Trump was right about everything” cap, he told reporters he’d fire her if she didn’t quit over claims about her mortgage paperwork. Lisa said she won’t be “bullied,” but that doesn’t mean anything under this administration. Trump’s grudge against Powell is personal, as he’s called him a “numbskull,” “an idiot,” and “a fool” more than once for not slashing rates earlier and harder. Now, Powell might finally be cutting, but Trump isn’t impressed. He’s already placed Stephen Miran, an ally who once argued that presidents should be able to fire central bank officials whenever they want, into a temporary Fed post. And Trump’s already replaced the head of the Bureau of Labor Statistics with a loyalist. Fed independence weakens as Trump allies step in The Fed is supposed to operate outside of politics. But by the time next year’s Jackson Hole meeting happens, there’s every reason to believe the Fed will look very different. A new, Trump-approved chair will likely be running it. The question then becomes: will that chair follow data, or follow orders? That’s not some hypothetical worry. Right now, bond markets are flashing warning signs. Long-term Treasurys are performing worse than shorter-term debt, suggesting investors think the Fed will be pressured to keep interest rates too low, not because it’s good policy, but because it’s good politics. If borrowing stays cheap, Trump can keep spending big without raising taxes. That’s the real game here. Even Powell’s last stand wasn’t one-sided. He promised to fight inflation “come what may,” but also said he’s watching the labor market closely because it can unravel fast. That’s classic Fed balancing; cautious, data-driven, no sudden moves. But once Powell is out, that style may disappear. If the next chair tries to speak up or resist, it might just signal to investors that something’s wrong. Dissent could be seen as either healthy debate or proof that the chair has lost control. Either way, reading the Fed will get harder, not easier. And the stakes will be even higher. If you're reading this, you’re already ahead. Stay there with our newsletter .
