In 1997, billionaire Carlyle co-founder David Rubenstein hired a then-relatively unknown member of the George H.W. Bush administration named Jerome Powell.
Over the course of eight years, Powell led the private equity firm’s industrial group and was a partner.
Fast-forward to today, Rubenstein owns the MLB’s Baltimore Orioles, and Powell is a Trump-appointed Fed chairman under attack from… President Trump.
A great example that one never knows where life will take you.
“Not everybody says he’s done a perfect job, but I think he’s done a very good job because he tells you what he’s going to do or what the Fed’s likely to do before they do it, which is unusual for a lot of Fed chairs,” Rubenstein told me on Yahoo Finance’s Opening Bid (see video above).
Rubenstein added, “Secondly, we haven’t had a recession since Jay Powell has been chairman of the Fed. Recessions occur in the United States roughly every seven years or so. And obviously, the Fed chairman is not the only person responsible for there being or not being a recession. But I think we haven’t had one because I think he managed the inflation reasonably well.”
Tell this to President Trump and his Cabinet members, who have gone on the attack against Powell, whose term as chair ends in May 2026.
The US dollar tanked more than 1% on Wednesday after reports saying Trump had polled a group of lawmakers on whether he should fire Powell. Trump also reportedly drew up a resignation letter.
Trump later said in a press conference with the leader of Bahrain that it was “highly unlikely” he would fire Powell in the near term. Treasury Secretary Scott Bessent said this week that a formal process to pick Powell’s successor has begun.
This is the latest drama between Trump and the Federal Reserve.
Trump has publicly called Powell a “numbskull” and nicknamed him “too late” for holding firm on interest rates in large part due to the administration’s tariff policy. The president has signaled a desire for the Fed to cut interest rates by as much as three percentage points.
Read more: How much control does the president have over the Fed and interest rates?
Interest rates currently stand at 4.25% to 4.5%. The Fed last cut interest rates in December 2024 by 25 basis points.
“I haven’t talked to him specifically about it, so I’m just surmising, but my guess is that nobody likes to be criticized by the president of the United States,” Rubenstein said. “But he hasn’t responded to any of the criticism, which I give him great credit for doing.”
Trump is reportedly eyeing longtime loyalists Kevin Hassett and Kevin Warsh to replace Powell. Bessent is also reportedly in the mix, as is Fed governor Christopher Waller.
The problem with all four respected economic minds is that they are perceived as too close to Trump, thereby potentially risking the Fed’s long-held independence.
“I think the independence of the Fed is absolutely critical, and not just for the current Fed chairman, who I respect, Jay Powell, but the next Fed chairman,” JPMorgan Chase CEO Jamie Dimon told reporters on a call earlier this week.
Rubenstein agrees.
“The Federal Reserve is really the crown jewel of the governmental system in many ways because it’s seen as very independent and very merit-oriented,” Rubenstein said. “I think the markets would respond better if somebody is seen as independent.”
“I think overall it would be a good thing for the country to have a strong Fed chair succeed Jay Powell rather than a weak Fed chair,” he added.
Rubenstein co-founded the Carlyle Group in 1987. Today, the private equity powerhouse boasts more than $447 billion in assets under management.
The company has been led by CEO Harvey Schwartz, a Goldman Sachs (GS) alum, since February 2023.
Rubenstein, a former aide to President Jimmy Carter, has become a noted philanthropist and has signed the Giving Pledge. President Joe Biden awarded Rubenstein the Presidential Medal of Freedom.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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