Economics
With Yellen Out of the Picture, Get Ready for Trump vs. Powell
The new Fed chief will butt heads with the president if rate increases cool economic growth.
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Photo illustration: Justin Metz for Bloomberg Businessweek; Photographer: AP Photo; Getty ImagesThis article is for subscribers only.
The long-expected clash between the Federal Reserve and the White House over interest rate policy kept getting postponed over the past year. The stock market climbed, the economy grew, and nothing the Fed did dampened the animal spirits. President Trump got along famously with Fed Chair Janet Yellen.
That calm is emphatically over. Investors have come to believe that the Fed, under new leadership, is serious about raising rates to prevent inflationary overheating of the economy—and they’re scrambling to avoid the fallout.