The Market Is Discovering Trump May Be Crazy
It’s not just the tariffs Wall Street hates—it’s the impulsiveness of the president behind them.
Oh, look, the president is attacking the Supreme Court again:
Isn't it great to live in a world where we just note that in passing before getting on to the rest of the lunatic news? Happy Tuesday.
More Like ‘Ow Jones,’ Am I Right?
by Andrew Egger
Another day, another murder-by-tweet in the markets. The Dow Jones plunged nearly another 1,000 points yesterday after Trump ushered in the new week with another attack on Federal Reserve Chair Jerome Powell, whom he has dubbed “Mr. Too Late.”1
Markets seem to be slowly discovering what close Trump watchers have known for years: An errant, insane Trump thought may emerge in the form of a single tweet—rattling the news cycle and then vanishing without a trace—but if that idea reemerges on multiple occasions, it quickly threatens to jump into official administration policy. That’s what’s happening now. Investors are starting to brace for the startling possibility that “Let’s Just Fire Jay Powell And Be Legends, Man” may be just around the corner.
Could he do it? By law and court precedent, no. Job protections for the board members of independent agencies like the Federal Reserve are written into the laws that created them, an arrangement upheld by the Supreme Court in 1935’s Humphrey’s Executor v. United States. Going by those laws and that precedent, Powell could only be fired for cause.
But some conservative proponents of the “unitary executive” theory have long grumbled that such arrangements—which place parts of the executive branch partially outside the president’s personal authority—should be struck down as unconstitutional. Back in 2020, Justices Clarence Thomas and Neil Gorsuch endorsed overturning Humphrey’s Executor entirely. And that sounds just fine to Donald Trump, whose government has spent months trying to give the Court an opportunity to do just that.
In Trump’s early-days purge of federal agencies, he tried to fire a number of officials whose jobs should have been protected by the same precedents, including Democrat-appointed chairs of the Federal Trade Commission and Cathy Harris, the acting chair of the Merit Systems Protection Board. Both Harris and the FTC chairs sued over their firings. As their cases have wound through the courts, administration lawyers have acknowledged Trump did not try to fire them for cause. But the administration has argued that the Supreme Court should permit the firings to stand anyway under the unitary executive theory, and the Court has agreed to hear the case.
Powell himself suggested last week he doesn’t think the outcome of that case would apply to the Federal Reserve. But others aren’t so sure. “There is no legal difference between Jerome Powell and me,” fired FTC Chair Rebecca Slaughter told Bloomberg TV last month. “If the president can legally remove me, he can legally remove Jerome Powell.”
Appellate Judge Patricia Millett has similar concerns. When the D.C. Circuit Court last month removed a district court stay on the firing of Cathy Harris in a 2-1 decision2, Millett was fiery in her dissent:
A century-plus of politically independent monetary policy is set to vanish with a pre-merit snap of this court’s fingers. . . . the Executive Order does not disclaim authority to remove members of the Federal Reserve or Federal Open Market Committee going forward. . . . Indeed, it is difficult to understand how it could, as the theory that the President has illimitable removal authority is, by definition, a theory that there are no limits on the President’s authority to remove every single executive official.
So Trump wants to fire Powell and thinks he should be able to fire Powell, and the Supreme Court may be poised to sweep aside what legal protections Powell still theoretically enjoys. At that point, the only other thing backstopping the Fed chair’s job is the knowledge that markets would react to his firing the same way they’ve reacted to his threatened firing: with panic.
During Trump’s first term, his defenders frequently pretended that his tweets and ad-hoc political approach simply didn’t matter in the real world. It was a convenient fiction that markets largely indulged. Trump’s griping about Powell didn’t crash markets then. Now, however, Trump has cured investors of that cheerful nonchalance for his momentary, grievance-filled whims.
This is bad for the markets—nobody wants traders to wake up every morning in a cold sweat and spend their days fearfully refreshing Truth Social. But it’s bad for Trump, too. His security blanket is gone. No more can he thrill his base and sooth his own rage by popping off online, while the Serious Real World smiles past him indulgently. The Serious Real World is suddenly realizing that the guy making the posts is the guy who’s gobbling up increasingly centralized power—and wielding it however he sees fit.
When he posts, the damage now appears in real time. Trump is Trump; it’s too much to expect he’ll ever learn his lesson about this—or quench his desire to accumulate power. But for the rest of us, it’s a bracing reminder: On the other side of all this, we’d do well to build the guardrails a little stronger and higher.
What Will Putin Do?
by Cathy Young
Just days after Donald Trump told reporters that he would likely “take a pass” on negotiating peace between Russia and Ukraine if progress didn’t happen soon, the Trump administration is touting a new peace plan. Trump said on Monday he would be giving “a full detail over the next three days”; but the principal outline of the proposal delivered to both Ukrainian and European officials in Paris last week has already been described by the Wall Street Journal. If Ukrainians agree to support some version of this plan, it could be taken to the Russians this week.
The Trump proposal reportedly contains a huge gift to Putin: formal recognition by the United States of Crimea as Russian territory. It also calls for a ceasefire, and an eventual settlement, broadly along current battle lines. Such an arrangement would preserve Russian occupation of Ukrainian lands; but the Kremlin’s demand to be handed over the entirety of the four regions it formally annexed and wrote into the Russian constitution in September 2022—the Donetsk, Luhansk, Zaporizhzhia, and Kherson provinces—would not be met. (Russia currently occupies nearly all of the Luhansk province but Ukraine controls about 30 percent of the territory in the other three, including the capital cities of the Zaporizhzhia and Kherson provinces.) Nor would there be any legal recognition of Russia’s sovereignty over its ill-gotten gains outside Crimea.
While the agreement would rule out Ukraine’s membership in NATO, it apparently drops other Russian demands that played a key role in the collapse of peace talks three years ago: the de facto incapacitation of the Ukrainian military via a drastic reduction in its size, equally draconian restrictions on permitted armaments, and a ban on military assistance by allied powers. The presence of European peacekeeping troops along a demilitarized zone would thus remain an option.
Can Ukraine accept this proposal? Obviously, the recognition of Crimea as Russian would be a slap in the face to Kyiv. But ironically, the extent to which Trump has already trashed American global leadership may take out some of the sting: Pro-Ukrainian Russian expatriate journalist Michael Nacke has wryly pointed out that no other democracies would be likely to echo this recognition, just as “Trump has renamed the Gulf of Mexico the Gulf of America, and no one gives a shit.” Ukraine, and much of the rest of the world, could go along and reserve the right to eventually seek Crimea’s return by diplomatic means.
The biggest problem with Trump’s peace proposal, says Nacke, is that there is no reason to believe Vladimir Putin will accept it. Russia has repeatedly stated that it will settle for nothing less than full control over the four annexed provinces and will not tolerate the presence of troops from NATO member countries in Ukraine. Putin’s lack of interest in peace can be gauged from the fact that, after declaring a 30-hour Easter truce—most likely as a courtesy to Trump—he rejected Volodymyr Zelensky’s offer to extend it for 30 days. (In practice, the truce led only to some minor slowdowns in the fighting and was repeatedly violated by Russia, according to Ukrainian reports.)
So far, there is no indication that Trump is willing to use any levers to pressure Putin into accepting peace—even on terms that would be far better than Russia deserves.
AROUND THE BULWARK
MAGA Grievance: A Short History… On The Mona Charen Show, PETER WEHNER from the Atlantic joins MONA CHAREN to offer insights into the transformation of the GOP from the party that passed PEPFAR to the MAGA warriors undermining the program today.
Pete Hegseth’s Meltdown… On Bulwark+ Takes, TIM MILLER and SAM STEIN break down the chaos surrounding the defense secretary, from public meltdowns and troll wars to bizarre tweets and curious press statements during Easter egg rolls.
Trump’s Road to Constitutional Perdition… A grim mix of nihilism, glee, and malice as the administration clashes with the courts, writes CORBIN K. BARTHOLD.
Pope Francis Was Everything MAGA Isn’t… Live from Rome, JOE PERTICONE joins TIM MILLER to unpack the Pope’s legacy, his politics, and how MAGA world is already reacting.
Quick Hits
CONGRATS, YOU’RE STILL FIRED: The Office of Special Counsel has informed federal workers alleging they were illegally fired because they were “probationary” employees that it will not be taking action on their behalf.
Shocking, we know.
An independent government agency tasked with upholding civil service laws, the OSC delivered this news to probationary employees in an email obtained by The Bulwark. In it, an OSC attorney revealed that more than 2,000 probationary employees had filed complaints with the office alleging they were wrongfully terminated. Many, including the person who passed along the email to us, were told that they were being let go because of performance-based reasons, even though they had sterling reviews. It simply could not be, those employees reasoned, that the White House made individual determinations rather than implementing a sweeping firing of anyone qualified as probationary (i.e., someone who had been in their role for less than a year).
The explanation offered by the OSC as to why they wouldn’t take up the complaints is a cul-de-sac of legal reasoning. “Even if OSC could prove that the decision to terminate your probationary employment was not based on individual assessment of your performance, OSC is unable to pursue a claim that it was unlawful,” the email reads. “This is because your termination, in the context of the government-wide effort to reduce the federal service through probationary terminations, was more likely effected in accordance with the new administration’s priorities than a decision personal to you.”
—Sam Stein
THE OTHER PUTIN STOOGE: The White House’s “we’re basically just on Russia’s side now” approach to the war in Ukraine is outrageous enough. But now we find out Trump’s chief negotiator has personal conflicts of interest, too.
Over at the Counteroffensive, our friend Tim Mak reports on the “personal stakes” for Steve Witkoff, Trump’s de facto envoy to Vladimir Putin”:
[Witkoff] has business ties to Leonard (‘Len’) Blavatnik, an influential businessman with significant relationships in Kremlin circles—[who] was sanctioned by Ukraine in 2023. . . . Witkoff’s connections to Blavatnik raise an important question: Can someone genuinely serve as a fair-minded peace negotiator when a business partner has ties to Russian oligarchs?
“The danger from Witkoff’s experience . . . is heightened because he is a mere ‘special government employee’—that is, a part time consultant to the US government. Because he is not committed to spending even the full Trump term of four years within government, Witkoff is almost certainly thinking about his next moves in business even while flying to Moscow,” said Jeff Hauser, the executive director of the Revolving Door Project, a watchdog group. “It is far too possible that Witkoff is currently planning investments in partnership with Russian or Russian-friendly money while conducting ‘diplomacy’ with Russia.”
We’d been wondering why Witkoff had been out there bragging about his newfound “friendship” with Putin, which—even for this White House—seemed like a little much. This stuff puts those sorts of remarks in a whole new light.
JET FUEL CAN’T MELT FEVER DREAMS: We are calling for a total and complete shutdown of Ron Johnsons until we can figure out what the hell’s going on:
Sen. Ron Johnson suggested Monday that the US government may have played a role in the September 11, 2001, terrorist attacks during an interview with MAGA influencer Benny Johnson on The Benny Show.
The senator, who sits on the Senate’s Permanent Subcommittee on Investigations, questioned the official explanation for the collapse of World Trade Center Building 7 and echoed claims frequently raised by conspiracy theorists on the fringes of the internet. . . .
The two also discussed the possibility of Congressional hearings into the 9/11 attacks. When asked what he wanted to know, Sen. Johnson focused on Building 7—which conspiracy theorists have claimed went down in a controlled demolition. . . .
Johnson said he has spoken with former Rep. Curt Weldon (R-PA) and plans to work with him “to expose what he’s willing to expose.” Benny Johnson chimed in, “So we may actually see hearings about this?” “I think so,” the senator replied.
A country that’s lost the ability or will to shove insane conspiracymongering to the fringe can stagger on for a while, with serious people more or less agreeing to pretend it doesn’t exist. What we’re seeing now is the inverse of that: U.S. senators are getting their brains melted online and sliding seamlessly into the infotainment loop to perpetrate the cycle, all while moving up the seniority ranks.
MYSTERIUM LUNAE: Madoc Cairns, a Catholic editor for the wonderful magazine Plough, has a really remarkable obituary for Pope Francis in the New Statesman:
When the cardinal electors made him Pope, Jorge Mario Bergoglio later said, they gave Rome a bishop from the very ends of the Earth. They chose him because he spoke of a place even further away than that. In March 2013, in the final meetings before the doors shut on the conclave to select the 226th successor to Saint Peter, Jorge Bergoglio talked about the moon.
Born in Buenos Aires in 1936, the man who would become Pope Francis told his fellow cardinals about the Mysterium lunae. The first Christians looked into the night sky 20 centuries ago, and saw, in a world shrouded by darkness, a great light. Look at the moon, they said, and you see the Church. It’s only by her illumination – her teachings, her sacraments, her holiness – that we can see at all. But like the moon, none of her beauty belongs to her. It’s borrowed grace, reflected light. It’s an illusion. Without God, it would be nothing at all.
In all the years since, the Church remained – the mystery and the light. And at the heart of it sits the figure of the pope: remote, untouchable, as enigmatic and inhuman as the surface of the moon. His powers and responsibilities are so vast, wrote one theologian in 1986, that it is a job it is humanly impossible to succeed in. A quarter of a century later, that theologian had confirmed in practice what he’d predicted in theory, and Benedict XVI became the first pope in eight centuries to resign. Adrift before the Church’s internal corruption, helpless before her steady decline, Benedict’s papacy ended in defeat.
His successor made it clear he intended his own would end differently. Francis’s speech about the Mysterium lunae told the story of a Church cleansed and renewed, restored to the light from which it had come. It was a return to first principles, summarised as “a poor Church for the poor”; expressed, first and most clearly, in gestures: Francis took a hostel room over the apostolic palace; a wooden chair over a throne; a silver cross over the traditional one of gold. Modelling a different kind of leadership to that of his predecessors, Francis intended to break the cycle of decay. What unfolded next was very different. The story of the Francis papacy – from his election on 13 March 2013 to his death, aged 88, on 21 April 2025 – was a story of illusions.
Cheap Shots
You said the entire Pentagon?
Wake up, babe, another double Trump endorsement just dropped:
Or occasionally, “To Late”—to save time, one assumes.
That stay was ultimately reinstated by the circuit en banc, then re-removed by the Supreme Court pending the final outcome of the case.
It does make laugh (bitterly) that Wall Street, and the larger world of finance, is just catching on to what many of us knew 10 years ago or more. I mean, what part of numerous bankruptcies and stiffing contractors don’t you understand?
If only we had another branch of government, a coequal one maybe, who could put a check on our orange God king. Oh well. Opportunity missed founding fathers.