Let's talk about Thune giving Trump orders.... - Belle of the Ranch [View all]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about Thune, Trump, Tillis, Powell, and the quacking of the ducks.

There's been a pretty interesting development when it comes to Trump's nomination for Federal Reserve Chair Kevin Warsh. We're going to do a quick recap so everybody can truly appreciate the gravity of something that occurred.

Trump wanted lower interest rates even though the data didn't support it. Current Federal Reserve Chair Jerome Powell didn't give Trump what he wanted. Suddenly Powell was being probed over cost overruns in construction. The probe is widely viewed as an attempt to put political pressure on Powell to cut interest rates according to Trump's wishes. It should be noted that inflation continues to tick up, which means Powell was correct in holding off on the cuts.

The investigation into Powell and the belief that it was political led a number of people to worry about the Federal Reserve's independence in the future. Central banks that are governed by the whims of politicians tend to end up causing economic calamity.

Republican Senator Thom Tillis of North Carolina drew a red line when it comes to the independence of the Federal Reserve. He said nobody was getting confirmed for the Federal Reserve until the probe into Powell was transparently concluded one way or another.

Powell's term as Chair of the Fed ends in May, but his term as a Federal Reserve governor continues until 2028. Powell has indicated he won't step aside until the probe into him is resolved, and he's certain of the independence of the Federal Reserve moving forward. That brings you up to date.

Meanwhile, some preliminary moves getting Kevin Warsh's nomination together have happened and there was a hearing. Thom Tillis seemed supportive of Warsh as a nominee. And during a hearing, he even said, "Let's get rid of this investigation so I can support your confirmation."

That was a clear signal that even though Tillis likes Warsh, he was not budging and that he had full intention of dragging this out for the rest of the year if that's what it takes to preserve the independence of the Fed. All of this fits with the normal dynamic, but this is the new wrinkle.

Republican Senate Majority Leader John Thune of South Dakota said, "We all agree that Kevin Warsh is a great pick and hopefully will be confirmed. The sooner the administration can wrap up this investigation and get ready to move forward with the new Fed chairman, the better off everybody will be."

That's right. The Senate majority leader is now giving Trump, I don't want to say orders, let's call it friendly advice in public through the press.

Tillis clearly has the backing of large portions of the Republican Senate. And this should have made it clear to Trump that when it comes to messing with the independence of the Federal Reserve, well, he doesn't have the cards, especially since it's become painfully clear that Trump was wrong to begin with about the need to quickly cut rates.

Maybe there's a TACO moment on the horizon, but it would need to come quickly. It'll get even more embarrassing for Trump in about 3 weeks. Trump's lame duck status is already influencing Republican behavior in certain sections, most notably things that deal with money.

Anyway, it's just a thought. Y'all have a good day.