As of this reporting, on July 16, a little after 4 p.m. on the East Coast, President Trump is not going to fire the Fed head, Jerome Powell. And there was never any draft letter in the Oval Office to fire Mr. Powell.

Just in case you missed this story, here are a few comments from Mr. Trump. A reporter asked if “you have plans, or you if you’re considering firing Jerome Powell?”  

Mr. Trump replied “No, we’re not planning on doing it,” adding that “he’s doing a lousy job. But no, I’m not talking about that.” 

He said: “I don’t rule out anything, but I think it’s highly unlikely unless he has to leave.” 

A reporter followed up by asking if “you have a letter of sorts designed to help you out?” 

Mr. Trump replied, “I haven’t drafted a letter no,” but “I think he’s a total stiff. But the one thing I didn’t see him is a guy that needed a palace to live in. You talk to the guy. It’s like talking to — nothing. It’s like talking to a chair. No personality, no high intelligence, no nothing.”

I doubt there are any fraud charges that will end up sticking to Mr. Powell’s Taj Mahal on the Potomac.

In a very long FAQ published by the Fed on its website, they make it clear that, while they work cooperatively with the National Capital Planning Commission, the board generally is not subject to direction from the NCPC, and that the NCPC’s review authorities are “advisory only.”

Yet it is a major embarrassment for the Fed, in an era where the new zeitgeist is to downsize the federal government — rather than making it palatial.

Mr. Trump and DOGE aim to significantly reduce the federal head count, stop using buildings or spaces that are cost-inefficient, and in general curtail the power of the Deep State.

Unfortunately, Mr. Powell and the Fed are infected by Deep State anti-Trump sympathies.

Yet his term will end next spring. And the Treasury secretary, Scott Bessent, has a process to choose a new Fed chair.

Meanwhile, the biggest issue is how well the American economy is doing — without inflation.

Since January, the CPI has increased only 1.8 percent at an annual rate. The producer price index has increased only two-tenths of one percent at an annual rate.

And there is no convincing evidence that tariffs are inflationary.

In fact, tariff revenues are coming in at a $300 billion clip for this fiscal year. And that will reduce the deficit by a substantial amount.

Meanwhile, the true cause of across-the-board inflation is a combination of excess government spending and excess Federal Reserve money printing.

So, here are some positive facts.

Federal spending has slowed to only 4.2 percent over the past year, and even as a share of GDP it has declined to 23.5 percent through the second quarter of 2025 from 24.5 percent in 2024. Meanwhile the M2 money supply is only rising at a 4.5 percent pace over the past year.

Those are counter-inflationary macro numbers.

And, on top of that, the One Big Beautiful Bill is basically a pro-growth supply-side formula of lower taxes and lower regulations.

Not only will that add to higher real wages for working folks, but it will increase productivity, as new factories are being built and onshoring investment is coming to America.

The AI revolution adds to productivity, and we are already in the midst of a tremendous business investment boom. These are also counter-inflationary.

And every one of these reasons argues strongly that the Fed’s target interest rate should be coming down — as Mr. Trump himself has argued.

You’d think that with all those economists at the Fed in their new Palace of Versailles, somebody would at least understand some of this good news.

Unfortunately, we’re going to have to live with “Chairman Chair” for a few more months.

From Mr. Kudlow’s broadcast on Fox Business Network.