Trump Rages Over the Stock Market’s ‘TRUMP RULE’
President Trump attributed positive economic data to his tariff policies while simultaneously blaming the Federal Reserve and “Wall Street heads” for failing to celebrate economic growth with corresponding stock market gains. The Commerce Department reported fourth-quarter GDP growth of 4.3%, exceeding economist forecasts of 3.2%, yet Trump characterized this as evidence of a broken market system he labeled “The Trump Rule,” where good news triggers market stagnation or decline due to trader concerns about potential interest rate increases.
Trump demanded the next Federal Reserve Chair lower rates during periods of market strength and stated anyone disagreeing with this position would be disqualified from the role, targeting incumbent Jerome Powell by name. He claimed the current Fed structure prevents economic greatness and prevents the nation from achieving GDP gains of “10, 15, and even 20 points in a year.” His demands directly contradict the Federal Reserve’s statutory independence from presidential direction in setting monetary policy.
Trump’s public grievance contradicts standard economic principles: markets respond to inflation expectations, and Fed rate decisions reflect data rather than political pressure. His characterization of Federal Reserve officials as “eggheads” and his assertion that the market “should” rise on good news and fall on bad news disregards the complex relationship between growth, inflation, and monetary policy that shapes investor behavior.
Trump’s stated intention to replace Powell and reshape the Federal Reserve’s leadership around personal economic preferences represents an effort to subordinate an independent institution to presidential demands. This pressure campaign directly undermines the structural autonomy the Federal Reserve requires to manage inflation without regard to short-term political consequences or equity market performance.