Summary
NBC News report on Jerome Powell’s comments at the ECB forum in Sintra, Portugal (July 1, 2025). Powell explicitly confirmed that the Fed would have cut rates already if not for Trump’s tariffs. Trump responded by calling Powell “a moron.” The piece also covers Trump’s appointment strategy for the Fed board (targeting Adriana Kugler’s vacancy for an early nomination), and international central bank solidarity with Powell.
Key Points
- Powell at ECB forum: “In effect, we went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs”
- Powell: “We didn’t overreact. In fact, we didn’t react at all; we’re simply taking some time”
- Trump’s response: “We have a moron at the head of the Fed”; also told reporters “anybody” would be better
- Trump said FOMC members should be “ashamed” of current monetary policy; demanded 1% interest rates “or better”
- Powell’s term ends May 2026; he could stay as board member until January 2028 if he chooses
- Treasury Secretary Bessent: would target October/November nomination for Adriana Kugler’s seat (expiring January 2026) to begin reshaping the board
- ECB President Lagarde, Korea and Japan central bank governors: said they would do “exactly the same thing as our colleague Jay Powell” — audience applauded
- Supreme Court had recently appeared to bolster Powell’s position against firing
Newsletter Angles
- “The tariffs prevented rate cuts” is the most important admission of the year — it directly connects Trump’s trade policy to the rate environment he’s publicly blaming on Powell
- The international central banker solidarity moment (Lagarde + Korea + Japan) is remarkable: global monetary authorities visibly rallying around Fed independence against a US president
- The board succession timeline (Kugler vacancy → October/November nomination) is a concrete mechanism for understanding how Trump reshapes the Fed without firing Powell
Entities Mentioned
- Jerome Powell — central figure; confirmed tariff-rate connection
- Donald Trump — called Powell “a moron”; pushing for 1% rates
- Federal Reserve — institutional context
- Kevin Warsh — potential replacement (background context)
Concepts Mentioned
- Fed Independence — explicitly being tested and defended
- Tariff-Driven Inflation — the specific mechanism Powell identifies
Quotes
“In effect, we went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. We didn’t overreact. In fact, we didn’t react at all; we’re simply taking some time.” — Jerome Powell
“I’m very focused on just doing my job.” — Powell, on Trump’s insults
“I think we would do exactly the same thing as our colleague Jay Powell does.” — Christine Lagarde, ECB President
Notes
NBC News sourcing. The Powell quote confirming tariffs blocked cuts is the clearest statement he made on this connection — useful as a primary source. The international solidarity angle is under-reported relative to its significance.