Trump’s ambitions collide with Epstein, Fed and health concerns

For US President Donald Trump, whose political career has benefited from voter anxiety over Washington elites, the health of his predecessor and the riches of Wall Street, the past week offered a reversal of fortune.

His efforts to escape the uproar over Jeffrey Epstein failed spectacularly, after The Wall Street Journal published a story alleging he once sent a suggestive birthday letter to the disgraced financier – a claim the President denied.

The White House was forced to make a rare disclosure that Mr Trump was not in perfect health. And the President whipsawed on the fate of Federal Reserve chairman Jerome Powell, signalling to lawmakers that he would attempt to fire him before relenting after concern about a market backlash.

Now, as Mr Trump gears up for a high-profile trip to Britain this week to finalise a trade deal with British Prime Minister Keir Starmer, he finds himself looking slightly vulnerable.

There was much Mr Trump hoped to harness in what he called a “week of wins” – passage of his flagship tax-cut package earlier in July, approval of spending cuts last week, a run of favourable economic data, the signing of a stablecoin Bill, and implementation of his aggressive tariff agenda.

Instead, there were suddenly a few punctures in the armour of a president who at times in his second term has seemed irrepressible as he bent rival institutions, countries and political opponents to his will.

Mr Trump concluded the week posting angrily to social media and

suing one of his top allies in the press,

Mr Rupert Murdoch, along with Dow Jones & Co and News Corp for libel. 

The Journal reported on July 17 that Mr Trump had prepared a letter for a book compiled for Epstein’s 50th birthday. The President said the letter was “fake” and called the story “false, malicious and defamatory”.

Still, the report threw petrol on a simmering fire, particularly among members of Mr Trump’s base, after the Justice Department said it had no evidence that Epstein had blackmailed political figures or kept a client list. That conclusion flew in the face of promises from some of the President’s top aides that they would reveal substantial new details about a case many Trump loyalists see as a smoking gun proving the existence of a so-called Deep State.

‘Weaklings’

Trump supporters and Federal Bureau of Investigation leaders Kash Patel and Dan Bongino are said to be at odds with Attorney-General Pam Bondi, while the President has repeatedly tried – and so far failed – to quell the furore. 

“Are you still talking about Jeffrey Epstein?” he barked at a reporter earlier in July. “People still talking about this guy, this creep? That is unbelievable.” 

Last week, he dismissed questions from his base and said those worried about Epstein are “weaklings” and that “I don’t want their support any more!”

But what was once a potent political tool for Mr Trump – stoking conspiracies about Epstein, and Democrats’ involvement – has now backfired, with his own supporters frustrated that his administration may be covering up details they hoped would be released. 

“The emphasis on Epstein is truly the best intentions of your most loyal followers,” Mr Charlie Kirk, a conservative media figure, said in a segment on his show addressed to the President. He said the Epstein case was a sort of linchpin in loyal Trump supporters’ questions about the alleged Deep State.

After the release of the Journal story, Mr Trump moved quickly. He directed Ms Bondi to pursue

the release of some grand jury transcripts

related to the case, though that stopped short of the full release of materials his allies have demanded. 

‘Same scam’

Separately, Mr Trump’s Director of National Intelligence, Ms Tulsi Gabbard, directed the declassification of materials from the Obama administration that she argued showed evidence that the former president and aides sought to politicise intelligence around Russia’s role in the 2016 election.

Mr Trump has repeatedly drawn an equivalence between the Russia controversy and the Epstein case, suggesting both amounted to conspiracy-mongering by his political opponents. A special counsel ultimately did not find evidence Mr Trump had coordinated with the Kremlin to interfere with the 2016 contest. 

“It’s all the same scam,” Mr Trump told Real America’s Voice in an interview that aired on July 16.

The Epstein saga is a rare example of Mr Trump struggling to successfully shift the narrative or change subjects in the news, according to one Trump ally, speaking on condition of anonymity.

The ally predicted the matter would fizzle out by the 2026 elections but criticised the White House’s move in February to hand right-wing influencers a binder called “The Epstein Files” that was largely a rehash of previously released information. 

It even overshadowed the President’s escalating campaign against Mr Powell, which has threatened to undermine longstanding conventions about Federal Reserve independence. Mr Trump mused about dismissing Mr Powell in a July 15 meeting with lawmakers, with one White House official saying on condition of anonymity they expected the President to act soon to fire the central bank chief.

For Mr Trump, his war against Mr Powell serves an important political function, giving voice to home buyers and borrowers who see lending costs impacting their wallets. But by July 16, Mr Trump said he would not remove Mr Powell unless the Fed chief was forced out for fraud, nodding to increasing efforts by the President’s allies to pressure Mr Powell over questions about a

bank renovation project

. 

‘Winning everywhere’

Mr Trump backed off his push to force Mr Powell out

in part because of warnings that it would trigger a messy legal fight, according to one person familiar with the matter, who requested anonymity to discuss internal deliberations. 

The issues are distracting from what the White House wants to steer attention to: a winning streak that includes passage of a package of spending cuts and the stablecoin Bill Mr Trump signed on July 18. 

“We’re winning everywhere,” Mr Trump said at a signing ceremony for the stablecoin legislation. “It’s not even close – not even close – and we’re going to keep it going.”

Even as he has notched long-sought policy victories – extending his tax-cut package, gutting government agencies and securing funding for his sweeping immigration crackdown – Republicans know that each carries substantial political risk and that he will need to focus on selling his agenda.

Democrats have seized on provisions curtailing Medicaid eligibility and tax cuts benefiting the wealthy to sharpen their economic critique of Mr Trump. And he is now two weeks away from his next tariff barrage due on Aug 1. 

The President has batted away economists’ warnings that his tariffs will threaten growth, upend supply chains and amount to a fresh tax on consumers. BLOOMBERG