Powell’s Fed Wins Inflation Battle—But Trump’s ’Mr. Too Late’ Tag Might Outlast the Victory

Jerome Powell finally tames runaway prices—just as the political knives come out. Trump’s nickname sticks like a bad meme, proving central bankers get no credit (and all the blame).

Behind the scenes: The Fed’s 2023-2024 rate hikes worked... slowly. Now Powell faces his next crisis—legacy erosion by tweet.

Bonus jab: Wall Street already priced this ’victory’ into their bonus pools. Main Street? Still waiting for the trickle-down.

Powell refuses to cut as Trump rages over delay

Economists think Powell’s wait-and-see approach could backfire. Dan North, a senior economist at Allianz Trade North America, said, “Go back into the ’70s, the Fed is always late both ways. They tend to wait. They want to wait to make sure that they won’t make a mistake, and by the time they do that, usually it is too late. The economy is almost always in recession.”

Right now, Powell is facing threats from both directions—Trump’s new tariffs could drive prices up, while growth may slow. That kind of mix makes it harder for the Fed to do anything without making things worse.

North said Powell’s current move—doing nothing—is the best of two bad options. “That’s why he’s doing the exact right thing at this moment, which is nothing, because one way or another it’s going to be a mistake.”

Still, TRUMP isn’t letting it slide. Even though he admitted the economy would probably survive either way, he wants the Fed to slash rates immediately, arguing that inflation has already been defeated.

But the economy isn’t showing any big red flags yet. Prices haven’t spiked, and growth isn’t collapsing. Still, fear is creeping in. Manufacturing and service sector surveys are turning negative. Consumer sentiment is dropping. Almost 90% of S&P 500 companies talked about Trump’s tariffs on earnings calls.

Powell is brushing it off. At this week’s press conference, he said the US economy is still “solid” and that the job market is “consistent with maximum employment.”

Fed’s past mistakes haunt Powell as data lags behind

This isn’t the first time Powell has waited too long. In 2021, he and other Fed officials said rising inflation was just temporary. They called it “transitory” and refused to raise rates. When that prediction fell apart, the Fed had to roll out a brutal wave of rate hikes.

Even now, inflation still hasn’t hit their 2% goal. That history of delay is what gave Trump his opening. The insult isn’t random. It’s built on Powell’s actual record.

Joseph LaVorgna, chief economist at SMBC Nikko Securities and former advisor to Trump, said the Fed is relying too much on labor market data to decide when to act.

“If they’re waiting for the labor market to confirm whether they should cut rates, by definition they’re too late,” he said. That’s because jobs data usually lags. It tells you what already happened, not what’s coming. By the time job losses show up, recession is already rolling.

Wall Street has a saying for that: “The labor market is the last to know.” LaVorgna said the Fed will likely miss the call again, stuck trying to guess how Trump’s tariffs will affect things. He said, “We’re not going to know if it’s too late until it’s too late. Economic history combined with current market pricing suggests there’s a real risk the Fed will be too late.”

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