Why Make a Martyr Out of Jay Powell?

Don’t martyr Jerome Powell. He was a terrible Fed chairman, but he’s not a criminal. Over his tenure, he consistently missed the Fed’s inflation targets with the worst price hikes in 40 years. He was the most political Fed chairman in memory. Raising rates to stop President Trump’s tax cut boom back in the first term, lowering rates to reelect Vice President Harris and the Democrats in the last election — totally political. A whole bunch of his Fed cronies face accusations of insider trading, or breaches of ethics, or mortgage fraud, but he never did anything about it. He jumped on the socialist bandwagon of climate change, woke, DEI, no loans to fossil fuel companies, everything wrong.In other words, a real meathead, but I don’t think he’s a criminal. He probably did testify wrongly about the Fed’s rebuilding plans before Congress, but Mr. Trump will not be able to get his new chairman through the Senate until he withdraws Mr. Powell’s criminal indictment. It’s not going to happen.Mr. Trump himself said last night, in a quick interview with NBC News, that “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 president went on to say, “no, I wouldn’t even think of doing it that way. What should pressure him is the fact that rates are far too high. That’s the only pressure he’s got.” Last summer, Mr. Trump paid an unusual visit to Mr. Powell and the Fed. And made sure to criticize the Fed’s cost overruns for their renovated buildings, which are estimated to run at least $700 billion over budget. At the time, Mr. Trump declined to raise the issue of criminal indictments or grand jury subpoenas. So who knows which little gremlin from the U.S. Attorney’s office at Washington, D.C., or the main Justice Department, decided to issue these subpoenas. Who knows? Everybody’s trying to play dumb, saying “I didn’t do it, I didn’t know about it.”Here’s the thing, much more importantly: Republican banking committee senators like Thom Tillis and others won’t confirm a new Fed chairman until the subpoenas are quashed. So it’s an exercise in futility. Yet all this screaming and yelling about ending Fed independence is so totally overbaked. There’s no awful market reaction today. The 10-year Treasury auction went great, 4.17 percent. It was below the when-issued 4.18 percent. Hat tip to my pal Peter Boockvar for that information.Meanwhile, the S&P and the Dow hit all time highs. So nobody seems really to be caring about this story. Here’s what they care about. The economy is growing at 5 percent or better. Maybe it’s going to hit 6 percent or 7 percent in the next year from Trump tax cuts and deregulation and “drill, baby, drill,” with all these new economic incentives and trillions of dollars coming in from around the world. There’s also an unbelievable 4 percent or more productivity growth. Plus, last year, 2.4 million household jobs were created, unreported in the press — 2.4 million. Plus, take-home pay adjusted for inflation, rising for the first time in years. Plus, record corporate profits. Plus, negative CPI prints coming from the positive oil shock. This has made the US the hottest economy in the world. That’s the key point right now. Not the cost of an old Fed elevator.From Mr. Kudlow’s broadcast on Fox Business Network.

Why Make a Martyr Out of Jay Powell?

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