According to Jim Zelter of Apollo Global Management, President Donald Trump has already set the stage for passing the blame without taking any accountability for his trade, tariffs and economic policies.
What Happened: On Thursday, speaking with Bloomberg TV, Zelter said Trump is deliberately avoiding naming a prospective Fed chair to keep the current leadership accountable for economic conditions.
“He’s in the catbird seat of blaming without accountability,” Zelter said, calling it a “classic Trump playbook,” something that allows him to shape the narrative, apply pressure, and score political points without bearing the fallout.
Zelter believes Trump’s long-standing desire for lower interest rates remains at the heart of his broader economic strategy. “He doesn’t like to pay debt, and he likes to pay low coupons on it,” he says, adding that “there’s no doubt he wants rates lower.”
See Also: Trump Advisor’s Proposal Of ‘Shadow Fed Chair’ Turning Jerome Powell Into A Lame Duck Gets Slammed By Economist Claudia Sahm: ‘What Could Possibly Go Wrong? Everything!’
While speculation continues to swirl over potential Fed leadership changes, Zelter doesn't believe Trump will move quickly. “I don’t suspect he’s going to do anything premature,” he added, noting that Trump benefits politically by directing criticism at the current Fed chair while avoiding responsibility for outcomes.
Zelter also addressed broader macro risks, noting that issues like tariffs and geopolitical tensions in the Middle East have been largely absorbed by the market. “The marketplace absorbed the idea of a 10% plus or minus tariff… the market has moved on,” he said. However, he flagged the ballooning U.S. deficit as the “elephant in the room.”
He also downplayed all concerns surrounding de-dollarization and waning U.S. economic dominance by paraphrasing Mark Twain, “The premise that our death is imminent is a bit premature.” He also attributed the recent weakness in the U.S. dollar to delayed hedging by foreign investors.
“It’s a 10-year catch-up,” he said, predicting that global investors rushing to hedge exposure could drive strong results for major U.S. banks this quarter.
Why It Matters: Economist Nouriel Roubini had made similar comments two months ago, saying that Trump was setting the stage to blame Federal Reserve Chair Jerome Powell for the coming slowdown in growth and a recession, all resulting from the latter’s tariffs.
This week, the prospects of Trump appointing a “Shadow Chair” to influence the Federal Reserve’s policymaking have already led to increased pressure on the U.S. Dollar.
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