stunned the political world by capturing the presidency — and December 2018, Powell’s Fed raised the prime rate eight times. Of course, the Fed slashed rates substantially after March 2020, when the COVID-19 crisis threatened the global economy. Along with heavy stimulus spending, cheap money flooded the economy, igniting inflation. Yet the Fed under Powell, curiously, seemed to look the
other way on inflation once then-President Joe Biden took office. In 2021, just a week after Team Biden relocated to 1600 Pennsylvania Ave., Powell declared that inflation was “likely to be transient and not be very large.” That June, Louisiana GOP Rep. Steve Scalise cautioned,
“The Biden inflation agenda of too much money chasing too few goods is causing major harm to hardworking families.” That warning seemed to fall on deaf ears, however. Pow-
ell was still predicting a relatively modest 3% inflation rate deep into 2021. He blamed price hikes on temporary supply bottlenecks that he said would “wane over time.” In retrospect, it is now painfully obvious that under Pow-
ell, the Fed whiffed terribly on inflation during the Biden presidency. The cumulative 21% inflation rate was stagger- ing, and exit polls indicate it was a major factor in the mass migration of voters to Trump last November. Today, as the Trump-Powell feud over monetary policy continues to grow, many leading conservatives see the Fed’s unwillingness to drop rates under a Republican president as more than coincidental. “Clearly, there’s something politi- cal going on,” concludes E.J. Antoni, chief economist at The Heritage Foundation. They note that in 2024, the Fed cut the benchmark inter-
est rate three times. But as soon as Trump took office, the Fed’s priorities seemed to shift. Pointing to Trump’s tariffs, the Fed abruptly hit the brakes on expanding the economy, preferring to focus on inflation. According to Antoni, however, the Fed’s neo-Keynesian
models “are much, much more in favor of an interest rate cut today than they were in the autumn of 2024 right before the election,” when the Fed was signaling a series of rate cuts. It’s a familiar pattern, GOP critics say. Antoni contends the high interest rates early in the first
Trump administration ultimately triggered a mini-financial crisis. “The Fed had to conduct a $500 billion bailout of lever- aged hedge funds beginning in September of 2019,” he says. Russ Vought, director of the Office of Management and
Budget, is another staunch Powell critic. Vought recently told CBS TV’s Face the Nation that Powell’s Fed has been “continually too late” to react to economic developments. Vought, Antoni, and others blame Powell for ignoring inflationary pressures during the Biden era. They now see the current belt-tightening as yet another overcorrection, and possibly one motivated by politics. “If we look at the level of interest rates under Repub-
licans versus Democrats over the last several decades,” Vought says, “it’s clear that interest rates tend to be lower
under Democrats.” The notion that the Federal Reserve is vulnerable to
political influence is hardly news inside the Beltway. It was then-President Barack Obama in 2012 who first
elevated Powell to serve on the Federal Reserve Board. Trump then nominated him in 2017 to serve as Fed chair — a decision he now clearly regrets. For now, Powell and his colleagues continue to talk a lot
about “transparency.” But according to election watchdog
OpenSecrets.org, 92.6% of political contributions made by Fed employees went to Democrats in the 2024 cycle. In one July speech, Powell told the banking community,
“The Fed is a dynamic institution. We are open to hear- ing new ideas and feedback on how to improve the capital framework.” Whether Trump’s problems with the Fed will end when
Powell’s term expires next May remains to be seen. But Fed critic Antoni sounds skeptical at best. “I think the evidence is pretty clear that the Fed is not an unbiased arbitrator,” he tells Newsmax. “They’re not an unbiased referee of any kind.” One of the Federal Reserve’s seven governors, Adriana
D. Kugler, a Biden appointee, resigned in August, giving Trump an opportunity to nominate a replacement who could influence Powell to lower rates.
Surprised? Fed Workers Overwhelmingly Favor Democrats
D
emocrats would win every election by a landslide if federal workers were the only votes counted. That’s
crystal clear based on how federal employees “vote” with their political donations. In fact, according to
OpenSecrets.org, the overwhelming
preference that 92.06% of the Federal Reserve’s 18,000 employees show for Democrats isn’t even that remarkable, at least when compared to the breakdown for other federal bureaus.
FEDERAL AGENCY
Federal Reserve CIA*
Department of Defense
Health & Human Services
Homeland Security Justice Department State Department
% DEM % GOP
DONATIONS DONATIONS 92.06% 89.97% 67.46%
7.94%
10.03% 32.54%
92.7%
74.24% 57.73% 83.87%
7.93%
25.76% 42.27% 16.13%
*
OpenSecrets.org advises that CIA employees naturally avoid identifying their employer. That may also apply to other federal organizations. SOURCE:
OpenSecrets.org
SEPTEMBER 2025 | NEWSMAX 19
TRUMP/ANDREW CABALLERO-REYNOLDS/AFP VIA GETTY IMAGES / DONATION/OURVIBES STUDIO©ISTOCK LEAVITT/ ANNA MONEYMAKER/GETTY IMAGES / POWELL/ROBERTO SCHMIDT/AFP VIA GETTY IMAGES
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