Interest rates, the dollar, and the stock market

Media Hit, 6/21/25

I was on NewsMax: The Count on Saturday night, talking about “interest rates, dollar, and the stock market.” This is obviously a pretty broad swath of topics so it’s hard to really prepare talking points per se. Anyway, on to talking points that I can think of on these issues!

Interest Rates

• Chairman Powell enjoys a somewhat unique position in that he has been nominated by a Republican President (Trump in 2018) and a Democrat President (Biden in 2022) and confirmed by a Senate of differing majorities (Republican in 2018 and Democrat in 2022). That both presidents had at their disposal a Senate that was predisposed to supporting “their nominee” and that both elected to choose Jerome Powell is a pretty encouraging feat.

• The Fed announced that they were going to be keeping their interest rate targets steady.

  • This is in spite of Trump calling for them to be lowered and for chastising Powell on social media and on the news.

  • Powell is very clear that the Fed is independent of the executive (which is good).

  • But is Powell more concerned with appearing independent than actually being independent?

  • I could easily imagine it being the case that if Trump were not going after Powell and “telling him what to do” all the time, Powell might reason that they could lower interest rates right now and do that.

  • But in doing so, Powell would appear that he is listening to the President, which he does not want to think he’s doing.

The Dollar

• The value of the dollar is fluctuating quite a bit lately, though 1) it is on an overall downward trajectory but 2) the fluctuations are within a sort of “narrow bound.” Is it more volatile than in past years? Yes. But is it so much more volatile that I think it’s causing issues? No, not really.

• That being said, the value of the dollar, especially as the world’s reserve currency, is an important asset for the American people.

• As that is eroded, as new currencies start to take shape, and as stablecoins and digital currencies begin to rise in popularity, this could be a problem that we’re going to have to deal with and that is preventable.

• A strong dollar helps the American people and it helps the American economy.

• I think we should be trying to reverse this trend.

Stock Market

• It does seem to be the case that the stock market has recovered from the “holy ****, what’s going on with tariffs?!” fiasco of the first few months of this presidency, which is good.

  • But think of that for a second: the stock market over the past six months has been flat. That seems strange for a president with the business acumen of Trump.

• What we are seeing is relatively stable job growth, though this is declining as of late with job growth going from 150k to 135k.

  • I’m also hearing people tell me that companies are receiving some sort of tax break if they announce job openings, though I can’t find any official statement of that being true. If anyone knows about this, PLEASE tell me more about it!

  • At the same time, though, we’re seeing actual declines in employment in the all-important manufacturing sector on a state-by-state basis.

• I’m coming to you from Michigan, a state that just last month Trump visited and promised that dozens of car companies were going to be announcing new factories in Detroit and placing new orders.

  • None of those have materialized, at least from anything I’ve seen.

  • As the son of a car parts manufacturer and the grandson of a steel worker, this troubles me. A lot.

• Combine that with geopolitical tensions around the world, an uncertain future of the Big Beautiful Bill and its provisions (temporary or permanent)

So What Happened?

I was joined by EJ Antoni, an economist at the Heritage Foundation. I’ve been on shows with him in the past and he’s generally been nice enough. What’s strange, though, is that he seems to have shifted a bit in the last few months. Specifically, he seems to be stumping for Trump more often lately. Maybe he always was and I just missed it, I don’t know.

We spent the segment focused on the fact that the Fed did not lower rates but instead left them unchanged. Trump is obviously very much against this, going so far as to call Jerome Powell “stupid” and “dumb” on national TV. And then he even quipped that he should appoint himself as chair of the Fed!

EJ asserted that the numbers all point to lowering interest rates as the right move and that this is therefore a political strategy by Powell to hurt Trump. Or something. That’s just not how I see it and I said as much on air. I’m siding with my excellent colleague, Lydia Mashburn Newman in thinking that this is more about ensuring Fed independence, including the perception of Fed independence.