Donald Trump just made one of the most revealing economic comments heâs made in years.
He openly said that appointing Jerome Powell as Fed Chair in 2017 was a mistake â and that he should have chosen Kevin Warsh instead.
Then came the real bombshell đ
Trump claimed Warsh could have helped grow the U.S. economy by up to 15% using a different monetary approach.
This isnât political drama.
This is macro insight.
Because to understand why this matters, you need to understand what the Federal Reserve really controls.
đŠ WHAT THE FED ACTUALLY RUNS (IN SIMPLE TERMS)
The Fed doesnât just âset interest rates.â
It controls:
âą Liquidity in the system
âą Credit availability
âą Risk appetite
âą Asset price pressure
âą The speed of economic expansion or contraction
đ Tight policy â borrowing gets expensive, growth slows, assets compress
đ Loose policy â capital flows, risk-taking rises, growth accelerates
These effects compound over years, not weeks.
âïž POWELL VS WARSH: TWO VERY DIFFERENT PHILOSOPHIES
Trumpâs frustration with Powell has always been about one thing: growth restraint.
During Trumpâs presidency:
âą Powell prioritized inflation control
âą Rates were raised
âą Liquidity tightened
âą Markets became volatile
Trump wanted a Fed Chair who would actively support expansion, asset prices, and economic momentum â especially when inflation wasnât yet a major threat.
Thatâs where Kevin Warsh comes in.
Warsh is widely viewed as:
âą Less aggressive on tightening
âą More sensitive to asset markets
âą More growth-oriented when inflation is manageable
Not reckless â but growth-first.
đ WHAT DOES â15% GROWTHâ REALLY MEAN?
Trump isnât talking about magic.
Heâs talking about policy posture.
Lower and more flexible rates can:
âą Reduce cost of capital
âą Encourage business investment
âą Increase consumer borrowing
âą Lift asset values
âą Boost confidence
And when confidence rises, money moves faster.
Thatâs economic acceleration.
đ„ THE CORE DEBATE: STABILITY VS GROWTH
This is the oldest argument in central banking:
âą Powellâs model â caution, credibility, long-term stability
âą Warshâs model â acceleration, competitiveness, growth
Powell protects against overheating â even if growth suffers.
Warsh, in Trumpâs view, would push harder to unlock potential â especially while other countries are actively stimulating their economies.
â° WHY THE TIMING MATTERS NOW
Markets are already hypersensitive to:
âą Rate cuts
âą Inflation trends
âą Political pressure on the Fed
When a former â and possibly future â president openly criticizes his Fed pick and promotes an alternative vision, expectations shift immediately.
đ Markets donât wait for elections.
đ They price narratives early.
That affects:
âą Equities
âą Bonds
âą Real estate
âą And yes â crypto
đ§ THE BIG LESSON FOR INVESTORS
Central bank appointments matter more than almost any policy decision.
âą Tax cuts expire
âą Spending bills end
âą Monetary policy compounds silently for years
One Fed Chair can shape an entire economic cycle.
Trump admitting this mistake is essentially admitting something deeper:
đ Personnel decisions can outweigh ideology.
You can promise growth â but if the institution controlling liquidity disagrees, the system resists you.
𧩠FINAL TAKEAWAY
This isnât really about Powell vs Warsh.
Itâs about how fragile economic outcomes are to leadership philosophy.
Two qualified economists.
Two very different trajectories.
Not because one is smarter â but because one is more cautious.
Macro outcomes arenât driven by intentions.
Theyâre driven by incentives and risk tolerance.
Change the person at the top of the Fed â and you often change the entire path of the economy.
Whether Trump ever gets the chance to make that appointment again or not, the message is already clear:
đą The next Fed era could look very different â and markets are already watching.
The real question isnât whether Powell was a mistake.
Itâs whether the next phase of U.S. monetary policy chooses restraint⊠or growth.
Because that choice doesnât just move charts.
It shapes businesses, capital flows â and the next decade of the economy. đ„
