Trump Hit with Rude Awakening as Market Sends Him Brutal Message

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0:43Michael Popok:Donald Trump's efforts to blindfold the Federal Reserve to deny it during the shutdown on purpose key economic data coming out of the Bureau of Labor Statistics has effectively backfired because now the Federal Reserve, led by its chairman, Jay Powell, during a press conference following the vote of the Federal Open Markets Committee, said, when you're in a fog, you slow down. You don't go faster. So if Donald Trump thought he was going to buy himself yet another rate cut by denying key economic data to the Federal Reserve, that backfired on him. Now, yes, the Federal Reserve had to do another bailout of the Trump economy.

1:24Michael Popok:I mean, the interest rate it's today, cutting another quarter of a point, is effectively half of what the interest rate was when Joe Biden was president. And Joe Biden had a roaring economy. Get that. Joe Biden had to deal with 5.3 % or so interest rates at the bank-to-bank level. Now it's down to 3.75 % to 3.9%, and the economy is still stuck in a rut and still crushing Americans. And now it's the Federal Reserve to the rescue, including the two people, the two enemies of Donald Trump, perceived enemies in Jay Powell, the Federal Reserve chairperson, and the Board of Governor Lisa Cook, who voted for the rate cut because they're looking at American suffering.

2:07Michael Popok:I'm Michael Popak. You're on the Midas Dutch Network and Legal AF. I got to put my Wall Street goggles on to see through this fog. I am sure it was Donald Trump's intention to deny the Federal Reserve key economic data that comes from the Bureau of Labor Statistics to put a blindfold around them, to put them in a black box so they couldn't make economic decisions other than at lower rates. That's not what Jay Powell did, because there are other private sources of economic data that the Federal Reserve can rely on, including the Beige Book, its own internal analysis, which is done regionally around the country and other entities that provide data privately.

2:49Michael Popok:You can see what purchasing managers are doing. There's data about that. You can see what supply chain managers are doing. You can see job reports from places like ADP, the payroll company. You can see it from some statistical sources. You can see it from Adobe. These are all things that are relied upon. They're not replacements for the gold standard of the Bureau of Labor Statistics, which Donald Trump has effectively shut down. They didn't issue their reports. They didn't find that to be critical information that's necessary to set the course of the economy. There's two halves to the economy.

3:24Michael Popok:There's the fiscal policy that's set by the president of the United States, and that includes his domestic spending policies, his budget bill that's been passed, his funding at the state level, right where he spends his money how he spends his money how jobs are created by the participation of the u.s in the u.s economy and includes his tariff policies which are the centerpiece of donald trump's failed economic policies and their impact on the economy now they're about to be ripped down hopefully by the supreme court there's an oral argument in the first week of november next week about whether he even had the power to collect a trillion dollars worth of tariffs from 130 countries.

4:05Michael Popok:But the Federal Reserve, the second half of the equation, is the Federal Reserve on monetary policy. And we have never allowed a president to have control of both monetary policy and fiscal policy. See, the Federal Reserve is independent, or is supposed to be. And they make decisions in reaction to what they see from the president's economic policies, his fiscal policies. If they suck, which they do here, then they've got to lower the interest rates in order to get money pumping through the arteries of the American economy if they feel like there's hyperinflation because there's two competing interests that the Federal Reserve are concerned about, because that is their mission.

4:45Michael Popok:Keep jobs and employment high. Keep inflation low. But the problem is high employment sometimes leads to high wages, lots of money in the economy, which leads to inflation. So they have to balance the two things. And they do it by way of the blunt forced object instrument of the interest rate, which is set intrabank between banks. And then that flows down. How much banks charge each other to borrow impacts how much they're going to charge you and me for consumer debt, student loans, credit cards, and the rest. So you have to hit that. It takes a while to course through the stream of the American economy if you're on the Fed side.

5:27Michael Popok:Now, Donald Trump's decided, let me put them in a barrel, in a black box so they don't know what's going on. Except there's other independent sources that say the Trump economy is terrible. And then when this committee got together today, which is a committee of 12, it voted 10 to 2 to cut the rates a quarter a point. They already cut the rate a quarter a point last month. Now voting for it was 10 people, including Jay Powell, who Donald Trump wants to get rid of, and Lisa Cook, who he wants to fire. Except the Supreme Court pumped the brakes and said, see you in January, an oral argument. In the meantime, she's a Federal Reserve on the Board of Governors.

6:01Michael Popok:The committee is comprised of seven, the seven members of the Board of Governors, which run the Federal Reserve, and five additional members, which come from a group of 12 that are the Federal Reserve presidents for the regional banks. They rotate. Five plus seven come together. They form the Federal Open Markets Committee, and they vote by majority rule. 10 to 2, including two Trumpers, Bowman and Waller, voted for the quarter point rate cut. One of the members on the board of governors who's sort of temporary, he voted, Keith Mirren, he voted to cut it even greater. I'm not surprised because he's in the White House.

6:46Michael Popok:He took a leave of absence as the chair of the Council of Economic Advisors to the president to come work in the Federal Reserve. So, of course, he's a Trumper. He's like, no, the economy is even worse than you people think. I know I'm in the White House. That's how I interpreted that. So he votes for a half a point. And one board of governor voted for or one committee member voted for no change at all. But the problem is what happens next month? What happens in December? And that's what Jay Powell, during his presser today, talked about the lack of data. Let's play the clip. Could you give us a sense?

7:22Michael Popok:I think we know a lot about the jobs data that's out there. Can you give us a sense of what you're looking at to track inflation in the absence of government data? Thank you. So it's a lot of things and it doesn't replace government data. But, you know, you know, all of these it's you know, it's I'll just mention some of the many, many names, price stats, Adobe and others. And for wage inflation, there's ADP data on spending. You're going to ask about spending at some point. You know, there are lots of other things that we look at. But, again, it's many different sources, and, again, including what we get out of the Beige Book, which will be sort of come out mid-cycle, as always.

8:06And it doesn't replace the government data, but it gives us a picture. Again, I think if something material were happening, if there were material developments, I think we would pick that up. I don't think we'll be able to have the very granule understanding of the economy while this data is not available.

8:25Michael Popok:Howard.

8:31Howard Schneider with Reuters. Thank you. I just wanted you to elaborate a little bit on what you said a moment ago about the continued shutdown, making it more difficult to make a move in December, and that may make you more cautious. To the degree you are relying on private data that isn't the gold standard or that you're relying on your own surveys or the beige book, do you worry at some point you're going to have to start making policy by anecdote? You know, this is a temporary state of affairs. And, you know, we're going to do our jobs. We're going to collect every scrap of data we can find, evaluate it, and think carefully about it.

9:07And that's our jobs. That's what we're going to do. So if you ask me, could it affect the December meeting? I'm not saying it's going to, but yeah, you could imagine that, you know, what do you do if you're driving in the fog? You slow down. So that could or could not. I don't know how that's going to play into things. We may get the data may come back, but there's a possibility that it would make sense to be more cautious about moving. I'm not committing to that. I'm just saying it's certainly a possibility that you would say, we really can't see. So let's let's slow down.

9:42Michael Popok:When you're in a fog, you slow down. So if Donald Trump thought that he was going to cut off all the inputs into this box of the Federal Reserve that sets rates, this machine that sets rates, cut the fuel lines and hoping they would sputter and he would get a bigger benefit because he's been pushing for cutting the rates in half. He wants the rates to be like 2 % because he's like a sailor on leave, right? He's like a riverboat gambler with nothing to lose. That's why we don't want presidents or dictators or dictator presidents to have control of monetary policy at the Fed, the central bank, fiscal policy, his own policy, and the data.

10:23Michael Popok:And Donald Trump is trying to get all three, manipulating all three because there are short term and long term horizon problems. Trump is on the shortest of time horizons, both chronologically and given his political chances and the midterms. So he doesn't care about 2027, 2028, 2030 and what he does to the economy. He just wants free money, fire it out, you know,$100 bills being fired out of a fire hose. Yeah. Yeah, everybody spend it. Let's get let's get the economy looking great. OK, It doesn't matter if after that's all over, you get the hangover of hyperinflation because he'll be long gone by then.

11:06Michael Popok:Every dictator or president that's gotten control of the Federal Reserve has wrecked the economy and created hyperinflation. And there are no examples of that not happening. That's why we don't let it happen. That's why even the Supreme Court has seen that the independence of the Federal Reserve is very important. That's why Lisa Cook is still sitting on the Federal Reserve and has not been fired. So Trump was like, hey, let's take advantage of the shutdown, right? Let's cut off all their data from the Bureau of Labor Statistics, all the consumer data and the job data and the economy data. Yeah, no, because they have other sources.

11:42Now, as you heard from Jay Powell, it's not great, but we're going to do our job.

11:46Michael Popok:It's not great, but we have to do our job. Hopefully it's in the short term. It's not the gold standard of data that we can rely on or that the world relies on. So now the rest of the central bankers around the world are looking at Jay Powell like, boy, really? You're setting rates without any of the core government data? You just, it seems like you're setting it by anecdote as that reporter asked. But this is, again, the games that are going on. You know, when the cat's away, the mice shall play. Donald Trump has decided during the shutdown, he's just going to create more pain for the American consumer, more pain for the American voter, more pain for Americans and try to get away with it.

12:32Michael Popok:Let's fire more government employees and put them on the unemployment line and cut off all funding. Let's defund more of the Department of Education. Let's cut off welfare payments, food stamp payments, SNAP payments, food payments, things that go against to prevent starvation and malnourishment. Let's save$8 billion. I got a ballroom to build everybody. I got to, I have to go to Europe and go kiss the butt of the Japanese, pardon the Japanese, because I wrecked everything in my tariffs. I got to do all that and do a big show before next week's Supreme Court oral argument about tariffs. We'll continue to follow it all right here.

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