Just one more, I promise.

Other topics coming soon — as you would imagine, the backlog is considerable — but I did want to wrap up the Fed discussion with a few more clips.

Explaining the (relatively muted) market impact of Trump threatening to jail Fed Chair Powell: Trump talk, talk, talks, and only rarely acts. His talk is alarming, but he TACO's so often that markets have learned not to respond. And so he's broken that feedback loop from politics to markets.

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— Justin Wolfers (@justinwolfers.bsky.social) January 13, 2026 at 4:52 AM

Wolfers is the expert here, and he’s very sharp, but I have an issue with his framing. There is a big difference between rarely acting versus acting and then frequently backing down, and a key component of the TACO process up to this point has been pushback, particularly from the markets.

As for the idea that the market’s lack of reaction was because Powell “won,” color me skeptical.

Lotta Q's about why markets didn't respond to Trump's attack on Powell. Lemme 'splain: 1. Markets had (largely) priced in that Trump hates Fed independence. That's not news. 2. But something happened yesterday: The next found of Trump v. Powell. And Powell won! That's news. Markets respond to news

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— Justin Wolfers (@justinwolfers.bsky.social) January 13, 2026 at 6:14 AM

What happened over the weekend was a major escalation, and even if we saw the highly dramatic and still more highly unlikely possibility that Trump picks someone unquestionably independent — like, say, Janet Yellen — the Fed will come out of this with seriously damaged credibility. And credibility is really important for this kind of institution.

To be clear, Wolfers is by no means unaware of the danger here.

We've seen this movie before -- In Venezuela, Turkey, and Zimbabwe, a popular strongman came to power with an absurd view of the world, and not enough checks and balances. They destroyed their monetary institutions. Does the US have enough checks and balances to prevent Trump from filming a sequel?

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— Justin Wolfers (@justinwolfers.bsky.social) January 13, 2026 at 5:51 AM

We should also take into account the fact that there’s no real sign of the rhetoric cooling, either from Trump or his supporters.

Nice little independent central bank you got right there. Would be a shame if something happened to it.

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— Catherine Rampell (@crampell.bsky.social) January 13, 2026 at 1:31 PM

The Trump Put: "When the market goes up, they should lower [interest] rates."

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— Catherine Rampell (@crampell.bsky.social) January 13, 2026 at 11:19 AM

As Donald Trump grows more desperate and erratic, we are seeing a definite ratcheting action with Powell, with his other economic policies, with mass deportations and with the half dozen or so countries he is now talking about invading. It’s possible that the worst is over, but it’s not a bet I would take.