The Fed Chair Clash That Signals a Bigger Economic Breakdown

Trump vs Powell isn’t just a political sideshow. It’s a flashing warning sign that America’s monetary policy is on a collision course with fiscal reality—and the consequences could be severe.

When Donald Trump publicly lambasts Fed Chair Jerome Powell over interest rate policy, it reveals more than political theater. It exposes a fragile economic system teetering on the edge of credibility, caught between runaway inflation, soaring debt, and a central bank losing control over long-term yields.

“This is a very difficult, fragile situation,” says Peter Boockvar, editor of The Boock Report and CIO of OnePoint BFG, reacting to the tense exchange between Donald Trump and Fed Chair Jerome Powell last week. “Beating down the Federal Reserve Governor is not going to get you what you want.”

In today’s interview with Daniela Cambone, Boockvar warns of rising global yields and why investors should “watch JGB yields every morning,” pointing to Japan as a key driver of long-term U.S. interest rates. “There is an aversion to taking on too much duration in sovereign bond land… and that is a big deal.” On gold, Boockvar explains why he expects another year of massive gold buying: “They are further diversifying their reserve holdings and want to own less dollars… Gold is now number two in that reserve pie.”

A Broken Bond Market Hiding in Plain Sight

Peter Boockvar, CIO of OnePoint BFG, points to the long end of the yield curve as the real danger zone. While the 10-year and 30-year Treasury yields haven’t yet “broken out,” their persistence around 4.5% and 5% shows investor discomfort with U.S. fiscal irresponsibility.

Global bond markets are sending a chilling message:

• Japanese 10-year yields hit highs not seen since 2011
• French, German, and UK long-term yields continue to rise despite central bank rate cuts
• Sovereign bond investors are avoiding duration like the plague

Translation? Global capital is losing faith in paper promises—and the U.S. isn’t immune.

The Fed’s Illusion of Control Is Crumbling

Despite cutting rates by 100 basis points, U.S. mortgage rates are nearly unchanged from a year ago. Why?

• The bond market no longer reacts predictably to Fed moves
• Persistent inflation is keeping real yields elevated
• The market senses political interference in Fed policy

Trump sees rate cuts as a way to slash the government’s $1 trillion annual interest bill—not as a tool to stabilize inflation or employment. But if Powell caves, the Fed risks becoming a de facto arm of fiscal policy.

Either outcome undermines trust.

Central Banks Are Voting With Their Gold Purchases

While Powell and Trump spar, central banks are taking action—by stockpiling gold. This marks the third consecutive year of over 1,000 metric tons in global central bank gold buying.

Why?

• The dollar’s purchasing power is quietly deteriorating
• Countries are de-dollarizing trade (e.g., China paying Russia in yuan)
• Gold has now surpassed the euro as the #2 reserve asset

This isn’t speculation. It’s strategy.

Why Physical Gold and Silver Are the Lifeboat

The system is signaling distress:

• Long-term rates are rising globally
• Inflation remains sticky
• Fiscal policy is detached from economic fundamentals
• The Fed’s independence is under threat

In times like these, physical gold and silver offer:

• Tangible wealth preservation beyond fiat manipulations
• An inflation hedge rooted in millennia of trust
• A store of value independent from central banks and Wall Street

When trust in institutions collapses, trust in gold rises.

The Clock Is Ticking

The Powell-Trump tension is just a symptom. The disease is deeper: a system built on leverage, political pressure, and shrinking trust in fiat money.

Investors, retirees, and anyone who depends on dollar-denominated assets must ask:

Will you trust a Fed caught between politics and panic? Or will you trust gold, the one asset central banks are quietly hoarding?

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