We’ve generally defended Fed Chief Jerome Powell when Trump has wanted to fire him.

So now it’s time for us at the HOTLINE to do something we hate doing: admit we were wrong.

Sure, the Fed must be politically independent. But it should also be competent and apolitical. Right now, the Fed checks neither of these boxes.

Could a high school economics student have been more wrong than the Fed on the direction of the economy this year?

Powell and his gaggle of 300 PhD economists predicted 1.6% growth for the second half of this year. Instead, the last two quarters have yielded results twice that high with 3.8% growth in Q2 and 4.3% announced last week for Q3.  The latest Q4 estimate by the Atlanta Fed, as of December 23, is 3% growth. Without the government shutdown, we would have stayed on the 4% growth path.

Powell consistently attacked Trump’s tariffs as inflationary, and in some cases deservedly so. But he completely downplayed all of the pro-growth Trump policies: trade deals that have attracted hundreds of billions more capital to these shores, the Big Beautiful Tax Bill, the hundreds of deregulatory actions, and the pro-America energy policies. These supply side policies have helped stabilize prices.

The Fed has been wrong on inflation, growth, and interest rates.

Three strikes and you’re out, Jerome.