The Globe and Mail reports in its Friday edition that President Donald Trump has shifted his focus from China and Mexico to Federal Reserve Chair Jerome Powell. Guest columnists Jerzy Konieczny and Steve Ambler write that of late, Mr. Trump threatened to fire Mr. Powell unless the Fed cuts interest rates by over 3 per cent, although he later backtracked. If carried out, the cuts would be an economic earthquake that could send shock waves through Canada's housing market and hurt the loonie. Such drastic cuts could impact the U.S. economy. Currently, the Fed's policy rate is 4.25 to 4.5 per cent. Mr. Trump claims that lower rates will reduce U.S. mortgage costs and interest on the $36-trillion (U.S.) debt, but this argument is flawed. Market expectations impact inflation. For instance, last year's Fed rate cuts led to increased mortgage rates and bond yields. A 1-per-cent policy rate could boost inflation. Most federal debt is locked in, with only $10-trillion (U.S.) needing refinancing. As well, changing the Fed's mandate to include lowering mortgage costs or aiding government debt would be a unilateral revision, as its primary goals are a 2-per-cent inflation rate and maximum sustainable employment.