The Federal Reserve has so far resisted Donald Trump’s aggressive pressure campaign to throw inflation concerns out and attempt to boost the U.S. economy with lower interest rates.
That’s expected to continue Wednesday, as the central bank is expected to leave interest rates unchanged. If so, that’s likely to annoy Trump, who is already reshaping the global economy with his tariffs.
The Fed’s rate setting committee began its two-day meeting Tuesday. Market projections and analysts expect it won’t cut its key rate.
Jerome Powell might be a corporate banker but he’s not an idiot. He and the rest of the Federal Reserve Board know that arbitrarily lowering the federal funds rate might be “good” at first, but disaster will follow quickly.
$10 says this is just Trump wanting to refinance some of his enormous debts at lower rates and thinking this is an easy way to make that happen.
I honestly don’t think that Trump is going for the personal angle. I think that he genuinely doesn’t understand basic economics and is willing to bankrupt the country in exactly the same way that places like Venezuela and Liberia have.
Ehhhhhhhh I wouldn’t paint him as an idiot but I definitely wouldn’t say he is good at what he does. Ill never be able to get over the belligerent money printing. I just read an article, ill try to find it to add here, that outlined the $192 billion that the fed owes the govt over the past 2 years. How do we go from the govt getting money from the fed revenue income to being owed hundreds of billions of dollars in just 2 fuckin years.
The United States Federal Reserve banks currently holds over $4.5 trillion dollars of US Government debt, as of Q1 2025. That’s $4.5 trillion the government owes to the Fed, through Treasuries and other instruments. That number spiked during Covid and has been slowly unwinding as they reduce back to normal levels.
I wasn’t able to find any articles showing how much money the Fed may owe the government with a quick search, but I would definitely be interested in seeing your source. Generally speaking, the Fed has no particular need for money given that they can literally just edit the amount of money in their bank accounts if they want to, and any borrowing they do would be for other reasons.
Not sure how reliable the source is but this is the article.
Thanks for providing that!
The article seems to fundamentally misunderstand the role of the Fed. It is not designed or set up to make profits; if they do make a profit it is sent to the US Treasury. The Fed is intended to be the lender of last resort for the US financial system, and as such cannot run out of money, go bankrupt, or otherwise run into serious financial difficulties. If they ever did need to pay for something and couldn’t otherwise do it, they can just add it to their accounts and pay for it that way— and in fact, that’s exactly how they purchase bonds or other financial instruments during the regular operations of the Federal Open Market Committee.
When you think about how the Fed is supposed to work, this makes complete sense. The Fed must have the freedom to spend incredible amounts of money to stabilize the economy during turbulent financial times, when additional liquidity is required to prevent the financial system from freezing up, and they must also be able to pull enormous amounts of money back out from the economy during calm times to prevent things from running too hot. Those cycles don’t work well for a traditional bank which must return a profit, which is why the Fed is structured as it is.
Right now, with economic uncertainty higher due to rising inflation, tariffs, and trade wars, it’s expected that the Fed would be spending more than it’s bringing in. Having read a lot of crypto news over the years, I’m sensing a strong “see? The Fed doesn’t know what they’re doing, and they’d need to be more responsible if the entire world used crypto!” bias from the article. I suspect the framing used is intended to support cryptocurrency speculators rather than to provide a well-rounded overview of current events (or at least events back in March, since that’s when the article was written).
It’s a crypto rag, so not at all