Trump’s “Mr. Too Late” label may stick even if Fed’s Powell wins the war

Federal Reserve Chair Jerome Powell might win the inflation battle, the public opinion war, and still end up branded with Trump’s latest insult: “Mr. Too Late.”

That’s the risk he’s now running after refusing to cut interest rates earlier on this week, ignoring Trump’s pressure and the growing fear that the economy is losing steam.

Trump, who’s back in the White House and leading the charge for rate cuts, posted on Truth Social that Powell is “a FOOL, who doesn’t have a clue,” and insisted that inflation is already gone. He said there is “virtually NO INFLATION,” pointing to March numbers that showed no change in the Fed’s preferred inflation metric.

Now of course Powell isn’t a fool, he is one of the smartest men alive, but he is also in the same spot as nearly every Fed chair before him—staring down signs of economic trouble but refusing to move until it’s too late.

Whether it was Arthur Burns in the ‘70s ignoring stagflation, Alan Greenspan slow to react to the dotcom bubble, or Ben Bernanke brushing off the housing collapse until after it started, history is full of Fed chairs who didn’t act until recession was already here. Powell may be repeating the same mistake.

Powell refuses to cut as Trump rages over delay

Economists think Powell’s wait-and-see approach could backfire. Dan North, a senior economist at Allianz Trade North America, said, “Go back into the ’70s, the Fed is always late both ways. They tend to wait. They want to wait to make sure that they won’t make a mistake, and by the time they do that, usually it is too late. The economy is almost always in recession.”

Right now, Powell is facing threats from both directions—Trump’s new tariffs could drive prices up, while growth may slow. That kind of mix makes it harder for the Fed to do anything without making things worse.

North said Powell’s current move—doing nothing—is the best of two bad options. “That’s why he’s doing the exact right thing at this moment, which is nothing, because one way or another it’s going to be a mistake.”

Still, Trump isn’t letting it slide. Even though he admitted the economy would probably survive either way, he wants the Fed to slash rates immediately, arguing that inflation has already been defeated.

But the economy isn’t showing any big red flags yet. Prices haven’t spiked, and growth isn’t collapsing. Still, fear is creeping in. Manufacturing and service sector surveys are turning negative. Consumer sentiment is dropping. Almost 90% of S&P 500 companies talked about Trump’s tariffs on earnings calls.

Powell is brushing it off. At this week’s press conference, he said the US economy is still “solid” and that the job market is “consistent with maximum employment.”

Fed’s past mistakes haunt Powell as data lags behind

This isn’t the first time Powell has waited too long. In 2021, he and other Fed officials said rising inflation was just temporary. They called it “transitory” and refused to raise rates. When that prediction fell apart, the Fed had to roll out a brutal wave of rate hikes.

Even now, inflation still hasn’t hit their 2% goal. That history of delay is what gave Trump his opening. The insult isn’t random. It’s built on Powell’s actual record.

Joseph LaVorgna, chief economist at SMBC Nikko Securities and former advisor to Trump, said the Fed is relying too much on labor market data to decide when to act.

“If they’re waiting for the labor market to confirm whether they should cut rates, by definition they’re too late,” he said. That’s because jobs data usually lags. It tells you what already happened, not what’s coming. By the time job losses show up, recession is already rolling.

Wall Street has a saying for that: “The labor market is the last to know.” LaVorgna said the Fed will likely miss the call again, stuck trying to guess how Trump’s tariffs will affect things. He said, “We’re not going to know if it’s too late until it’s too late. Economic history combined with current market pricing suggests there’s a real risk the Fed will be too late.”

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