Trump to Powell: Lower rates and inflation wont be a problem, I'll get oil prices lower

Trump to OPEC+: Lower oil prices and I'll weaken the dollar helping your EM economies

We believe that is what is going on behind the scenes right now. The Bottom Line is: Tariffs, and tax cuts are the sizzle here. Cheaper energy and a weaker dollar are the steak. Just as Bessent advised: and Trump needs Powell on board to do this.

From January 24ths Trump is Horse-Trading Again

Powell's Fed and the Trump Accord:

Yesterday's rate decision was no surprise to Fed watchers. However, the Fed's decision to aggressively reduce the amount of bonds it would sell into the market as part of its quantitative tightening (QT) program was more unexpected. Taken together, these moves signaled a dovish stance, with Powell acknowledging stagflationary pressures and financial tightness as justification for the action.

But that's not the headline.

Powell's Press Conference Pushback

The key takeaway from Powell's press conference was his strong pushback against the media's alarmist tone regarding a potential recession and the resurgence of inflation risks. Powell's tone and responses aligned with the administration's policies, signaling that the Fed and the White House—meaning Powell and Trump—are now on the same page.

There may not be direct coordination, at least not visibly. That would likely fall under Scott Bessent's arena. However, based on Powell's responses to key economic concerns, it's evident that there is now a working alignment between Trump and Powell.

Evidence of the Powell-Trump Accord

Powell's responses on three major topics indicate this shift:

1. Tariffs and Inflation

• Powell acknowledged that tariffs have an inflationary effect on the economy.

• He also noted that the Fed already accounts for the risk of reciprocal tariffs from other countries.

• His message was clear: The Fed sees the tariffs, understands their impact, and is not reacting with alarm.

• The subtext of Powell's response? We have the data. We're monitoring it. No need for panic.

2. Recession Risk

• Powell dismissed the press's increasing concerns about recession as overblown.

• He stated that the workforce is stable and the economy is on a better track—not necessarily great, but improving.

• He called out the excess of Cassandra-like warnings about a looming downturn.

A historical note: When stocks crashed in 2022, the media ignored recession risks and instead dismissed concerns with the narrative that "talking about a recession creates one." This peaked with the infamous "vibecession" concept—a claim that negative sentiment, not economic fundamentals, defined recessions. That argument, while interesting, was clearly partisan. fittingly, the left leaning press is now talking about a recession with no qualms about creating one.. and gone are the calls for calm and labels such as vibe-cession.