| This is Bloomberg Opinion Today, a carefully curated compendium of Bloomberg Opinion’s opinions. Sign up here. Here’s a loaded question. Who would you rather have at the helm of the US economy: President Donald Trump, or Federal Reserve Chair Jerome Powell? For me at least, the answer is easy — it’s the headline to this item. Amid the tariffs that Trump has unleashed on the world, it’s comforting to know that the anchor for the US financial system (and in many ways the economy as a whole) is a dispassionate former investment banker who steered the country through the whiplash of a global pandemic. Trump doesn’t see him that way, of course. He wants the Fed to follow the lead of the European Central Bank, which just reduced rates for a seventh time since June, so the president is bashing Powell for not cutting interest rates. He has taken to his favorite platform, Truth Social, to engage in one of his favorite pastimes, Fed-bashing. “Powell’s termination cannot come fast enough!” wrote the man who nominated Powell as Fed chair in 2017. Trump’s ire at Powell goes beyond impatience with the Fed’s desire for more clarity on the fallout from abrupt US tariffs. As Jonathan Levin writes, what offended the president is that Powell dared speak his mind about tariffs, the Fed’s independence and other things that affect the economy at a question-and-answer session during an appearance at the Economic Club of Chicago. “Powell portrayed chaotically implemented tariffs as plainly bad for the economy; slammed the approach taken by the Department of Government Efficiency; and issued a legal defense for why he thinks he can withstand any attempt by Trump to fire him,” Jon writes. Presidents like low interest rates because they spur economic activity. As James Carville observed more than three decades ago, elections are won and lost on how people feel about the economy. Trump knows that his agenda will stall and he will face an avalanche of congressional investigations if Republicans lose either the House or the Senate in next year’s midterms. Expect Trump’s vitriol toward Powell to heat up.
None of this is Powell’s concern, nor should it be. President Joe Biden wasn’t thrilled with the Fed raising rates 11 times in 2022 and 2023 to fight inflation — but it worked. Inflation, which peaked at 9.1% in June 2022, has settled back down to 2.4%. Now Trump is upset because the uncertainty swirling around his ever-changing tariff policy has made it impossible to know whether inflation will roar back and the economy will enter a recession.
It would be irresponsible to continue lowering rates in the face of such uncertainty. That’s why the market demands an apolitical central bank. As Jon writes: “Investors need to know that America’s central bank remains committed to its goals of maximum employment and stable prices, even if it needs to fight for its ability to carry out its work.” In the end, Jon says, “I suspect that Powell’s chutzpah will prove an asset for the economy and markets.” Bonus Fed Reading: There’s an old saying that nobody likes a quitter. It’s certainly an ugly scene when a player takes the ball and storms off the field. But what happens when you are forced to quit? That’s what’s been happening over the last several months as the Trump administration has abruptly canceled nearly 750 National Institutes of Health grants. The answer is that all the resources, time and knowledge invested in these studies are lost — and the careers of hundreds of scientists are derailed. Lisa Jarvis and Carolyn Silverman have crunched the numbers. They write: Health and Human Services data show that some $373 million had already been spent on the 242 discontinued R01 grants, an NIH award that is considered critical to launching a successful career. Researchers tend to get that chunk of funding — typically a sizable amount that supports their work for 3 to 5 years — after they’ve done a few years of preliminary work. It’s all geared toward asking a big scientific question.
This analysis doesn’t even include the NIH grants at Harvard University that are at risk from Trump’s $2.2 billion federal funding freeze. Even if those funds are restored, Lisa and Carolyn say, the disruption could delay or derail studies on health conditions such as tuberculosis and ALS, known as Lou Gehrig's disease. Here’s a thought: Let’s not quit on science. Bonus Inefficiency Reading: - DOGE’s Ban on WFH Will Reduce Government Efficiency — Claudia Sahm
Are you willing to bet against professional gamblers? More than half of bettors on Polymarket believe there will be a US recession this year. If you’re waiting for an official declaration of recession from the National Bureau of Economic Research, it will be way too late, writes John Authers. By the time the NBER got around to declaring the recession that began in January 2008, it was December 2008. By then the S&P 500 Index had plunged by almost 50%. We are certainly in a period of uncertainty. This isn’t a conclusion based just on anecdotes from US businesses. The cloudy crystal ball is underscored by a big spike in the Economic Policy Uncertainty Index, which is compiled by a group of economists, writes Justin Fox. This big spike outpaces the one from March 2020 — which, you may recall, is when the world locked down because of Covid-19. Will this latest spike of uncertainty last? It’s, well, uncertain. Google’s Money-Printing Machine Can Be Dismantled — Dave Lee New York Feels Wind Chill of White House Politics — Liam Denning The Dollar's Payments Monopoly Will Soon Be History — Andy Mukherjee Harvard Proves the Only Choice Is to Fight — Mary Ellen Klas Undoing Brexit Begins With a Break From Tyranny — Matthew Winkler The Supreme Court has agreed to hear birthright citizenship arguments.
A proposed millionaire tax would let billionaires slide. UnitedHealth’s shares fell the most in 26 years.
Friday’s the day for showdowns for the last NBA playoff spots. Cat smugglers arrested in Spain. Angler catches 7-foot monster fish in Texas. Notes: Please send quips, quibbles and queries to Thomas Black at tblack@bloomberg.net | 
