{"text":[[{"start":8.44,"text":"Bond vigilantes might have to cancel their summer plans if Donald Trump keeps up his reckless assault on the Federal Reserve, in favour of maintaining their role as a force field around the world’s most important central bank."}],[{"start":27.04,"text":"Trump’s distrust of this sober institution has long been clear. He is, at his core, a real estate guy, skewed towards the supposed benefits of nice low borrowing costs. Along with high taxes on imports, these are the two pillars of his economic worldview. "}],[{"start":48.59,"text":"So it has been bracing, and norm-busting, if somewhat predictable, to witness his constant volley of insults hurled at “numbskull” Fed chair Jay Powell over recent months. Powell has, Trump said on Wednesday, been “terrible” in the role. “I’m surprised he was appointed,” the president said — a curious assertion given he was the man who gave him the job, not, as he appears to believe, his nemesis Joe Biden."}],[{"start":81.22,"text":"Investors have grown accustomed to the drip, drip, drip of insults, threats and legal acrobatics deployed by Trump and his administration, aimed at ousting Powell and appointing a yes man instead. For his part, Powell has kept a dignified demeanour, betraying a fiery determination to stay in position until his term’s bitter end next May, and to stick on the Fed board beyond that. Under him, the Fed has held rates at a little over 4.25 per cent all year, despite Trump’s desire to see them at 1 per cent — a rate typically seen only in times of crisis that would make the US, in theory, one of the cheapest places on earth to borrow money."}],[{"start":129.51999999999998,"text":"Largely, this has been pantomime stuff. Trump wants to fire Powell, he can’t fire Powell, he doesn’t want to fire Powell after all. On and on it goes. The latest wheeze appears to be an effort to shove him out based on concerns over the costs of renovating Fed buildings. "}],[{"start":151.79999999999998,"text":"All this grandstanding is rather cartoonish and, for Trump, a useful distraction from other problems, in this case political heat emanating from files relating to the late sex offender Jeffrey Epstein, which the president seems suddenly keen for everyone to forget. "}],[{"start":172.92999999999998,"text":"For all the slapstick, however, investors are not amused. This week, when Trump turned up the heat yet again, indicating to Republican lawmakers that Powell’s days in the job are numbered, markets snarled in response, shoving down the dollar and raising long-term borrowing costs in a move that says “leave our guy alone”. Message received, Trump backed down again."}],[{"start":202.20999999999998,"text":"It is just possible that the president does not quite grasp what is at stake here but the message from markets is clear: if you follow through on this, the dollar will get smoked, both in terms of its value and its centrality in global finance. Real-life borrowing costs will explode higher as markets anticipate a new Fed chair who will do Trump’s bidding and slash interest rates despite signs that the inflationary impact of his trade tariffs is finally starting to bite. It is not even in Trump’s interest to force this through, nor to pick an alternative man for the job (all the supposed candidates are male) to act as a back-seat driver until Powell’s time is up. There are zero upsides here."}],[{"start":257.46,"text":"Powell does not set interest rates on his own, but alongside a broad committee of his peers. Nonetheless, the chair’s voice rings more loudly than other rate-setters. An unserious successor can exert enormous influence on everything from rates, to the Fed’s balance sheet, to emergency swap lines, to its staff. Even assuming Powell stays in post (fingers crossed), we could still be in for a rough ride if the president plumps for a clownish replacement in 2026."}],[{"start":295.31,"text":"For now, the bond market is one of the few things holding Trump back from the brink. For those investors, reacting to every outburst may feel like a waste of time but it performs an essential service in telling the president what he does not like to hear: “No.”"}],[{"start":324.15,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1752794673_9034.mp3"}