The article analyzes the potential devastating effects of Donald Trump's economic policies, particularly his use of tariffs and his attempts to influence the Federal Reserve (Fed).
Trump's tariffs have created a "confusing blizzard" leading to unexpected inflation and potential stagflation, as noted by Fed Chair Jerome Powell. The article highlights the global backlash and the unpredictable nature of these actions.
Trump's attempts to pressure the Fed into lowering interest rates are seen as an attack on the institution's independence. The article suggests that Trump might resort to extreme measures, including purging members of the Fed board, to achieve his goals. The article references past presidents' attempts to influence the Supreme Court and the Fed but emphasizes that Trump's actions are unprecedented in their scale and intensity.
The article warns of potential severe consequences. If Trump succeeds in forcing rate cuts and tax cuts, it could lead to hyperinflation and a collapse of the US dollar. The high US federal debt, low savings rate, and reliance on foreign investment further exacerbate this risk. The article concludes that Trump's actions could destroy the credibility of the Fed and US treasury debt, ultimately leading to capital controls.