About this episode
On the morning of July 16, a White House official told Bloomberg News that President Donald Trump was preparing to fire Federal Reserve Chairman Jerome Powell. Such a firing would potentially be illegal ( as the Supreme Court recently noted ) and undermine decades of goodwill that Fed policymakers have built up with investors. Trump quickly took the threat back , while making it clear he might still try to dismiss Powell, ostensibly based on alleged overspending on a renovation of the central bank’s headquarters. On this week’s episode of Everybody’s Business , hosts Stacey Vanek Smith and Max Chafkin are joined by Martha Gimbel, director of the Budget Lab at Yale, to explore what’s at stake. Though Gimbel says there’s a case to be made that the Fed has been too slow to lower interest rates, she explains that the idea of either firing or bullying Powell into an extreme rate cut would backfire by destabilizing the economy. She says banks would probably raise mortgage rates in the short run rather than lower them if Powell were ousted, due to the uncertainty caused by such an unprecedented move. The other problem is that interest rates aren’t set by Powell, but by a committee—and the committee might react to Powell’s firing by resisting Trump’s directives. Also on the episode, Bloomberg Businessweek columnist Amanda Mull discusses why travel still hasn’t rebounded from the Covid-19 pandemic. Part of what’s happening has to do with politics: Canadian tourists in particular seem to be staying home in protest of Trump’s provocations. Plus, the pandemic may have permanently changed travel habits, discouraging vacationers from flying and pushing some business travelers to opt for Zoom when they might have previously hopped on a plane. An underappreciated factor however is that airline travel has simply gotten less comfortable. This also comes back to the pandemic, which pushed carriers to adopt pricing schemes that allowed leisure travelers to pay for perks while adding new charges for services once provided for free. That’s made the experience for those of us at the back of the plane all the more miserable. On the bright side, the New Yorkers we spoke to—which included New York Mayor Eric Adams, who is having a very bad week —are nevertheless feeling optimistic. Finally, we explore the growth of “metaphysical services” by Etsy witches who cast spells for strangers at a reasonable price. Results certainly aren’t guaranteed—and centuries of folklore would suggest that messing with spells is a dangerous game—but that isn’t slowing down this market. See omnystudio.com/listener for privacy information.