Powell Has Been Easing Monetary Policy for Months
While Trump wants Powell to ease interest rates, Powell and the Fed have been easing.
M2 has grown since March 2024 and its narrower counterpart - M1 - has grown since September 2024 (year-over-year growth per the first chart below).
The Fed has run easy monetary policy since Greenspan was Chair. My view is that real interest rates are still negative, and that the Fed never took real interest rates into positive territory during the “QT” period.
The Fed should do nothing with rates - ever - and instead allow the market to set its policy rate. The money supply is what moves the needle. To that end, Powell greatly inflated both M1 and M2 (second chart), in 2020 and 2021, thereby significantly reducing the purchasing power of the Dollar - permanently. For that reason, Powell is the most irresponsible Fed Chair in U.S. history.
