President Donald Trump posted again this morning on Truth Social about his desire for interest rates to be much lower than they are now, and calling the Fed chair names along the way. Stacey Vanek Smith, co-host of the Everybody’s Business podcast, writes today about why Jerome Powell can just turn the other cheek. Plus: A rebel army is supplying essential minerals to manufacturers around the world, and a small business is behind a lot of the sparkly faces at concerts and sporting events this summer.

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Whenever President Donald Trump talks about ousting Federal Reserve Chair Jerome Powell, as he did this week, I think about a purse I have hanging on the wall of my apartment. It was a gift from economist Gabriela Saade back in 2020, and it’s made out of paper money. Specifically, it’s woven from hundreds of Venezuelan bolivars (about 40,000 worth, she estimated). The purse is a product of Venezuela’s hyperinflation. Saade, who was working in her hometown of Caracas at the time, paid $3 for it. “You see them around the city,” she told me. “Since bolivars are worthless, they are making art out of them.”

The purse is lovely: pink, purple, green and white and beautifully crafted. But any currency that’s more valuable as a purse than as spending money inside it should serve as a warning about the kinds of things that can happen to a country and an economy if it lets inflation run rampant. For me, the bolivar bag is a reminder of one of the dangers that can happen if a central bank loses its independence.

The purse made of Venezuelan bolivars. Source: Stacey Vanek Smith

This week on the Businessweek podcast, Everybody’s Business, Max Chafkin and I talk with economist Martha Gimbel, executive director of the Budget Lab at Yale, about the increasingly hot topic of Fed independence. The presidentially appointed chair (in this case, Powell, who was selected by Trump back in 2017) can’t be fired before the end of a four-year term absent cause.

Powell’s term as chair will end in May 2026, which doesn’t seem soon enough for Trump, who has become increasingly frustrated with the Fed’s resistance to lowering interest rates. “He’s too late. He’s always been too late, hence his nickname, ‘Too Late,’” Trump said of Powell this week. “He should have cut interest rates a long time ago,” he added. “He’s costing us a lot of money.”

Gimbel, who was a White House economist in the Biden administration, says she understands where the president is coming from. “It's fun when interest rates are low,” she says. “You can borrow money more cheaply, and then you can spend more money. If you’re a business, you can buy a bunch of property, hire a bunch of workers, and then those workers have wages that they can spend on things.”

Lowering interest rates is like giving the economy a shot of espresso: Everybody feels good and everybody wins, at least for a while. The trouble is, all of that cheap, easy money can create a dangerous situation around inflation. “The fact that it’s fun when interest rates are low is exactly why we have an independent central bank,” Gimbel says.

High interest rates are no fun at all. You want to buy a house? A car? Take out a student loan? Expand your business? It’s going to cost you. At best, you’ll have to scale back your purchases. At worst, you’ll have to scrap your plans altogether. Meanwhile, the interest rate on your credit card bill soars, nobody’s hiring, and you can’t sell your house.

Elected officials understandably see a great danger in throwing a wet blanket on the economy. Gimbel points to the oft-cited cautionary tale of Arthur Burns, who was Fed chair under President Richard Nixon. As inflation crept up, Nixon pressured Burns to keep interest rates where they were in an effort to maintain growth and employment. The result: years of double-digit price increases and a very damaged economy.

After Paul Volcker took over as Fed chair in 1979, nominated by President Jimmy Carter, he raised interest rates up to 20%. (Right now, by comparison, they’re around 4%.) The effect was stark: Borrowing cratered, businesses got smaller, markets plunged, millions of people lost their jobs, and the US was driven into a recession. But Volcker didn’t budge and, after several years of pain, inflation came down and the economy started to grow.

Volcker never would’ve survived as Fed chair had he been an elected official. He even got death threats. But because Volcker didn’t have to worry about votes, he could do what he thought was best for the economy. Carter wasn’t so lucky—he was voted out of office.

Fed independence has trade-offs too. Tom Orlik, chief economist for Bloomberg Economics, recently made the excellent point that the inflation spike during the Covid-19 pandemic and its aftermath was one reason President Joe Biden lost his job, but Powell (whose actual job it is to make sure inflation stays in check) didn’t face those consequences. The Fed has enormous power over our economy, our businesses and our lives. It’s not unreasonable to want someone with that much power to have to answer for their decisions.

Of course, the US economy is strong, inflation is relatively low, and hyperinflation (of the bolivar bag kind) doesn’t happen because of any one thing. Still, an independent central bank is an important barrier to this kind of economic devastation.

“I understand why it is frustrating, this idea of a group of unelected bureaucrats just kind of looking at charts,” Gimbel says. “But we do have decades of experience that tell us that a group of unelected bureaucrats looking at charts is actually the thing that gets you the best economic outcome.” After years of Volckerian austerity, there was a payoff. People all over the world trusted the US dollar to hold its value and, 40 years later, the US economy is the largest in the world (and the dollar is firmly an “in the purse” currency).

Gimbel says she’s glad the person making the difficult decision of how to walk the line between economic growth and inflation doesn’t have to take popularity into account while making that call. Independence gives the Fed the luxury of taking the long view.

Listen and subscribe to Everybody’s Business on Apple, Spotify, iHeart and the Bloomberg Terminal.

In Brief

• President Trump authorized the Justice Department to seek the release of grand jury testimony from the sex trafficking prosecution of Jeffrey Epstein.
• Hess won its arbitration battle with Exxon Mobil, clearing the way for it to be bought by Chevron more than 20 months after the $53 billion deal was announced.
• A half-century of US federal funding for public television and radio came crashing to an end as the House approved a $9 billion package of spending cuts.

The Rebels and the Rare Earths

Illustration: Deena So’Oteh for Bloomberg Businessweek

Along Myanmar’s 1,300-mile border with China, a town called Pangwa sits in a small valley, surrounded by forested peaks that are occasionally dusted with snow. For years, this hardscrabble outpost was controlled by an aging warlord, an ally of Myanmar’s brutal military junta, who ran his fiefdom largely according to his own whims. Loggers felled precious hardwoods and spirited them over the border. Farmers were permitted to grow opium poppies, as long as they paid steep taxes.

Then, in the mid-2010s, workers began arriving from southern China in search of a precious resource: rare earths, metallic elements with exceptional magnetic and conductive properties that are crucial to dozens of modern technologies. They carved collection pools into the terraced slopes, which soon filled with a milky, turquoise-tinted stew of chemicals, soil and water. Gambling and drug use flourished, the vices of a frontier boomtown.

This new reality continued until early last year, when an organization called the Kachin Independence Army started an offensive—part of a civil conflict between the junta and hundreds of armed groups, rooted in resource-rich areas abutting China, India and Thailand, that’s now in its seventh decade. Formed in 1961 to fight for greater autonomy for the ethnic minority of the same name, the KIA had built itself into a formidable military force, with deep experience operating in mountainous terrain. By October it was advancing steadily toward Pangwa, encountering meager resistance. After sporadic exchanges of fire, the government-affiliated soldiers defending the town opted to retreat; some stashed their weapons in drainage ditches and changed into civilian clothes, aiming to blend in with crowds of refugees streaming toward China. On Oct. 18, Pangwa fell.

Measured by the number of bodies atop the battlefield, the victory was unremarkable. Measured by the spoils below, it was one of the KIA’s most significant ever.

Myanmar is the world’s third-largest source of rare earths after China and the US, Timothy McLaughlin writes, and the KIA appears to control the mines. Keep reading: A Rebel Army Is Building a Rare-Earth Empire on China’s Border

The Company That Makes Swifties Shimmer

Taylor Swift and others wearing Fazit speckles. Photo illustration: Ryan Haskins; Photos: Getty Images (4), Fazit (3)

Aliett Buttelman had just plopped down on the couch after a vigorous hot yoga class on a Monday night in October when she got an urgent message from an Instagram friend: Turn on the football game—and fast. Since her significant other was already watching the matchup between the Kansas City Chiefs and the New Orleans Saints across the room, it didn’t take long for Buttelman, co-founder of the beauty startup Fazit, to see what the big deal was. Taylor Swift, who was at the event supporting her boyfriend, Chiefs tight end Travis Kelce, was wearing Fazit’s signature product, a spattering of glittering freckles, right there on national TV.

Almost immediately, news outlets started to post about Swift’s whimsical makeup, but few mentioned the brand behind the product. So Buttelman fired off emails to every style reporter she could find, explaining that the world-famous musician had used a Fazit press-on makeup patch—called “speckles”—and it wasn’t a paid promotion. “Every second counts right now, because we have to let the world know that Taylor is wearing our stuff,” recalls her co-founder, Nina LaBruna, who raced to shore up inventory (luckily, they’d just placed a restocking order) and make sure their manufacturer could start producing more patches ASAP in case demand took off. It did: Within 48 hours, sales of the makeup freckles, then sold on Fazit’s website and Amazon.com, exploded to more than $1 million—a 3,500% spike.

Buttelman and LaBruna, both 29, went into 2024 hoping to sell $3 million worth of products. Thanks in large part to their Swiftie luck, they topped out at $10 million. Following that viral moment (and an accelerated rollout in 1,000 Target stores in the months that followed), Fazit says its 2025 revenue is on track to exceed $40 million. “People like glam,” LaBruna says.

For the latest article in the Going Viral series, Ian Frisch writes about Fazit’s path to this moment: How Taylor Swift Turned a Glitter Freckle Maker Into a Sensation

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