?? How Trump will make the Fed the enemy

?? Welcome to Trendlines. The secret password is "'Slap Shot' Bruins ."

I am Boston Globe financial columnist Larry Edelman , and today I look at why it's practically a sure thing Donald Trump will clash with Federal Reserve chair Jerome Powell.

Plus: an improbable buyer for Alex Jones's Infowars.?

Trendlines is my twice-weekly newsletter for Boston Globe Media . Click the subscribe button to keep on top of business and the economy in the region and beyond.

We've seen this movie before

Donald Trump is quickly appointing loyalists with debatable qualifications to lead major government departments. Matt Gaetz as attorney general. Fox News host Pete Hegseth for the Defense Department. And Democrat-turned-Republican Tulsi Gabbard to oversee U.S. intelligence.

?? The business angle

One area unlikely to change leadership is the Federal Reserve, where Jerome Powell’s term as chair lasts until May 2026.

Trump, despite appointing Powell, previously considered firing him over disagreements on interest rates.

?? Why it matters

A similar conflict could arise again if Trump pushes for lower borrowing costs to fulfill his economic growth promises.

• However, the Fed remains cautious to prevent overheating the economy and sparking inflation.

• If frustrated, Trump may attempt to undermine the Fed’s independence, potentially rallying Congress, which will be controlled by Republicans, to pass legislation reducing the Fed's autonomy.

?? Catch up

Currently, inflation is easing but remains above the Fed’s 2% target.

• The Consumer Price Index (CPI) increased by 2.6% in October compared to a year earlier.

• Core CPI, excluding food and energy, has hovered around 3.3% for the past six months.

The Fed is expected to lower its main interest rate by another quarter point next month, totaling a full percentage point cut since September. However, future rate reductions are uncertain, with some officials, like Kansas City Fed President Jeff Schmid, expressing doubts.

??? Big picture

Trump’s economic strategy includes tax cuts and deregulation, which he believes will accelerate growth.

• Economists caution that such policies, combined with stricter immigration limits and expanded tariffs, could trigger another inflation wave, potentially forcing the Fed to halt or reverse its rate cuts.

• Bond markets reflect this concern, with 10-year Treasury yields rising despite recent Fed cuts.

? Hands off

Historically, political interference in central banking — as seen with Richard Nixon in the 1970s, when he pressured then-Fed chair Arthur Burns to keep credit flowing — led to economic turmoil and prompted reforms to secure Fed independence.

• The Burns debacle led to the Federal Reserve Reform Act of 1977, which delineated the Fed independence on monetary policy while requiring it to be more transparent with Congress.

Harvard economist Kenneth Rogoff highlights central bank independence as a major achievement of modern economics.

?? Final thought

Trump will get to pick a Fed chair in 2026. But in the meantime, he’s going to make Powell’s job miserable.

?? Trending

Restaurants : Boston has sued chef Barbara Lynch for $1.7 million in unpaid taxes.

Philanthropy : A Tufts professor is donating millions of dollars he made in the stock market to the Medford university.?

Crypto : The FBI carried out a search at the New York City home of Shayne Coplan, founder of the crypto-based betting website Polymarket.

?? The Closer?

This is not a joke headline: The Onion buys Alex Jones’s Infowars at auction with help from Sandy Hook families. From the Associated Press :?

The satirical news publication The Onion won the bidding for Alex Jones’ Infowars at a bankruptcy auction, backed by families of Sandy Hook Elementary School shooting victims whom Jones owes more than $1 billion in defamation judgments for calling the massacre a hoax.

The New York Times adds :

The publication plans to reintroduce Infowars in January as a parody of itself, mocking “weird internet personalities” like Mr. Jones who traffic in misinformation and health supplements, Ben Collins, the chief executive of The Onion’s parent company, Global Tetrahedron, said in an interview.

Terms of the purchase, a suitably ironic twist for Infowars, were not disclosed.

The Onion is the publication that brought us classic headlines such as "Kitten Thinks of Nothing but Murder All Day" and "Pretty Cute Watching Boston Residents Play Daily Game Of 'Big City.' " Thanks for reading. I will be back on Monday.