The Fed cuts rates by 25 points. The Powell line passes again.

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The Federal Reserve has decided to cut its interest rate by 25 basis points to 4-4.25 percent. All as expected, amidst a climate of intense tension and uncertainty. It's true that The Donald turns everything into a happening, but rarely has anyone seen what's happening in the austere rooms (currently being expanded) on Constitution Avenue. Is this Apprentice or is it the most powerful central bank in the world? The latest two twists and turns occurred shortly before the board was due to meet to decide.

On Monday night, the Federal Court of Appeals ruled by a two-to-one vote that Lisa Cook, Joe Biden's nominee for governor, could attend the meeting despite the president personally attempting to fire her. Meanwhile , the Senate hastily approved the nomination of Stephen Miran, Trump's economic adviser, to fill the governor's post on the council headed by Jerome Powell, whom the Commander-in-Chief wants to oust (also) before his term expires for disobeying orders to reduce interest rates.

I made you and I will destroy you, is Trump's mantra not only in every corner of the administration, but in all aspects of American life: newspapers, TV, Hollywood which is trying to resist (for a little longer), space contracts, the auto industry, artificial intelligence (the new beneficiary is his old friend Larry Ellison, the patron of Oracle already nicknamed, with a pun, Donald's Oracle), cryptocurrencies and above all the fate of the dollar.

Thus, with these last-minute antics, the Fed Board has found itself choosing between Powell's caution and Miran's unscrupulousness. As the shadow of a new central banker looms , he will undoubtedly be a loyal follower of the man who reigns in the White House. We'll see if he plays his role with the correctness demonstrated by Powell, or we'll have to say goodbye to monetary policy's independence from politics altogether. Treasury Secretary Scott Bessent, who has withdrawn from the race, is considering eleven candidates, both internal and external.

The markets and most analysts had taken a rate cut, even a small one, for granted: a first step, for starters. The dollar had approached its lowest level in years precisely in anticipation of a cut. But deciding what to do wasn't easy. Before the meeting began, the sides were undecided. Powell was cautious and concerned about stubborn inflation (consumer prices rose 2.9 percent in August, well above the central bank's 2 percent target) and the highly uncertain impact of tariffs, given that Trump continues to change his mind between constant threats and sudden withdrawals. On the contrary, Miran , who swore hastily so as not to miss his appointment, if not with history, at least with the news, was in favor of a sharp cut (at least half a percentage point), especially since the economy is slowing and jobs are no longer growing as before. A valid argument, let's be clear, as is Powell's. In the middle are representatives of the regional Feds, who in turn reflect the different situations of a patchy American economy.

Among the central bank's board members, two others, Christopher Waller and Michelle Bowman, had long supported a rate cut, dissenting from Powell. Dissension is not uncommon, but it typically comes from local representatives; to find three governors opposed to it, you have to go back to the 1980s, when the central bank had to make radical decisions, first to stem hyperinflation and then to respond to the October 1987 crash. An interesting chart published by the Wall Street Journal provides an idea of ​​what has happened since then.

In the end, the decision was less controversial than expected: everyone favored the 25-point cut, with Miran voting against it, favoring a 50-point cut . But this is just the beginning; the show will go on.

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