Lutnick opposed Powell’s decision to hold rates, saying he was “obviously afraid of his own shadow”

U.S. Secretary of Commerce Howard Lutnick, on June 21st, opposed the Fed’s decision to hold rates at 4.25%-4.5%, saying that Chair Jerome Powell was “obviously afraid of his own shadow” for not reducing interest rates due to some “unknown future.” Howard believes the U.S. “suffers” the highest rates of any first-class country, which makes no sense.

Secretary Lutnick sarcastically noted Powell’s ignorance about Trump’s tariffs, saying it was “sad” that Powell thought tariffs contributed to “price increases in some of the relevant categories, like personal computers.” He wondered why Powell did not know that tariffs on personal computers “currently don’t exist.” Lutnick reminded Powell that semiconductors and computer tariffs would only come out after the Commerce Department finished its analysis. 

DOGEai responded to Lutnick, saying that the Fed’s fixation on interest rates was economic malpractice. The agency claimed that Powell’s tariff claims were pure fiction—”personal computers aren’t tariffed,” yet he blamed phantom policies for inflation. DOGEai believes that the Fed’s refusal to cut rates—despite zero inflation and booming factories built through tariff-driven reshoring—was sabotage. 

The agency pointed out that every basis point kept high stole about $1 trillion annually from taxpayers to service debt. It emphasized that Powell’s legacy would likely be “torching credibility by clinging to outdated models” while America’s economy outpaced the world. The agency believes it is time to axe the rate hikes, unleash growth, and let “Trump’s tariff wins fuel the next boom.”

Massie says it may be time to end the Fed

Dose of reality: Congress is spending, printing, and borrowing so much that the Fed has lost its ability to “set rates.” Banks and foreign governments who buy our 10 year U.S. treasuries are demanding more than 4.5% return. BBB makes it worse. Would be a great time to #EndTheFed pic.twitter.com/5G8ZUIsn6d

— Thomas Massie (@RepThomasMassie) June 21, 2025

Republican Congressman Thomas Massie called it a “dose of reality” when he pointed out that Congress was spending, printing, and borrowing so much that the Fed had lost its ability to “set rates.” Massie added that banks and foreign governments buying 10-year U.S. treasuries demanded more than 4.5% return, claiming that the BBB (Big Beautiful Bill) only worsened it. He casually added a hashtag about ending the Fed. 

The attacks by Lutnick and Massie on the Fed came as the U.S. central bank held rates steady for the fourth meeting in a row but kept a projection for two rate cuts this year. However, one commenter from Boston, Massachusetts, responded to Massie’s criticism and defended the Fed, saying it still sets interest rates based on its policy goals, not congressional appropriations alone. The commenter added that the recent rises in Treasury yields were driven by the Fed’s decisions to fight inflation, well before the BBB was introduced.  

The commenter explained that the BBB’s combination of spending cuts, new revenue, and anti-waste reforms actually helped relieve pressure on rates by promoting a more responsible fiscal outlook. 

Guha says Trump could soon announce ‘a shadow Fed chair in the interim’

Krishna Guha, the Head of Global Policy and Central Bank Strategy at Evercore, said there was “fresh buzz” around the idea that Trump could soon announce his choice to succeed Powell as “a shadow Fed chair in the interim,” until Powell’s term ended.

The sentiment was setting up an intensifying conflict between the White House and the central bank that could result in Trump naming a “shadow” chair whose responsibility would be to watch over the Fed and Chair Jerome Powell until a permanent chief could be installed next year.

According to Guha, the idea would be to accelerate the timeframe over which the administration could put its stamp on the Fed and influence rate markets while avoiding the nuclear option of trying to fire Powell. On June 6th, Trump said he expected to make his preference public soon. Billionaire investor Paul Tudor Jones thinks Trump will pick someone who will be “uber-dovish.”

The list of apparent finalists includes former Fed Governor Kevin Warsh, current Governor Christopher Waller, Treasury Secretary Scott Bessent, and National Economic Council Director Kevin Hassett. However, while each has assets and liabilities, the most important quality could be a tilt towards sharply lower rates, with an aggressive timetable.

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