Unfortunately, JD Vance is weighing in on US monetary policy now too.

“Too” meaning in addition to his boss, one Donald Trump, whose penchant for Fed bullying ventured beyond the pale around halfway through his first term.

On Wednesday, Vance accused Jerome Powell of “monetary malpractice” in a social media post citing the just-released May inflation report. (Actually, Vance cited Joe Weisenthal’s coverage of the numbers — as though Bloomberg, rather than the government Vance co-runs, is the primary source for official US inflation data.)

“The president has been saying this for a while, but it’s even more clear: The refusal by the Fed to cut rates is monetary malpractice,” Vance remarked, while retweeting Joe.

Maybe Vance is right, maybe he isn’t, but it’s untoward for the Vice President of the United States to publicly accuse the Fed of a minor conspiracy which, let’s face it, is what JD meant by “refusal.”

Here’s the thing: Disinflation isn’t going to get Trump the rate cuts he wants. Fed pricing for 2025 moved just 6bps in the wake of what it’s fair to call one of the most encouraging CPI reports of the post-pandemic era, particularly under the circumstances.

Markets went from pricing ~45bps of easing this year to 51bps on Wednesday, which is to say two cuts were all but guaranteed in the market’s eyes before the CPI release, and fully guaranteed afterwards. That’s a meaningless distinction.

Have a look at the figure below. It shows the dollar plotted with a measure of US inflation surprises.

The greenback’s followed that gauge lower and to the extent the realized inflation data’s a factor in greenback weakness, dollar bears will probably need outright economic underperformance if they expect additional declines from here.

“Contrary to initial fears, the prospect of US tariffs did not lead to an increase in US prices this spring,” SocGen’s Kit Juckes wrote, noting that the Bloomberg US Inflation Surprise Index shown above now sits at its lowest levels since 2020.

That inflation surprise metric, Juckes said, “remains a key indicator for markets in anticipating the Fed’s reaction function [and] with limited room for further negative inflation surprises,” SocGen doesn’t “expect inflation dynamics to drive the next phase of dollar weakness.”

“Instead,” the bank went on, further dollar downside is more likely to be a function of “slower US growth” in the back half of the year. Not coincidentally, the back half of the year is when traders see the Fed beginning to ease again, with the first of the two cuts currently priced likely to come at the September SEP meeting.

September’s a ways away. If the Fed waits until then to cut, Trump (and Vance) would view that as another example of Powell being “too late.” And they might have a point. The idea isn’t to wait for the recession to start before you cut.

Based on this week’s news flow — and his own comments — Trump’s probably going to telegraph his choice for Powell’s replacement pretty soon, or anyway sooner than he has to. The more irritated he gets with Powell, the more inclined he’ll be to go ahead and pick a successor.

It seems likely that Trump will encourage his pick to weigh in publicly on the Fed’s decisions as a kind of 10-month, ongoing loyalty test as Powell serves out the remainder of his term. Although any such dissenting opinions will be irrelevant for markets, the spectacle of the next Fed chief openly criticizing the current boss will make for bad optics. “Monetary malpractice,” if you like.

So, get ready for a “shadow Fed Chair.” It’s only fitting, I suppose, that Scott Bessent play the role. After all, it was his idea.