Trump vs. the Fed

Lies, damned lies, and statistics.
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Trump vs. the Fed

Post by Skeeve » Thu Oct 11, 2018 4:33 pm

Trump vs. the Fed
"Independence from presidential criticism has long been a hallmark of the Fed's existence," said Jim Tankersley at The New York Times. Last week, in a televised interview, followed by a flurry of tweets, President Trump upended "long-standing White House protocol" by attacking the Federal Reserve's decision to raise interest rates. With two increases this year, the Fed has hiked its short-term interest rate to 2 percent. It plans to raise rates twice more before year's end, to keep a lid on inflation and return interest rates, at historic lows since the 2008 bank crisis, back to normal levels. Trump believes the Fed's moves could "derail" the White House's efforts to spur the economy. Although the economy has momentum and unemployment remains low, wages are still stagnant. If the Fed raises rates too fast, it could halt growth. But if it moves too slowly, the economy "could overheat and ignite a rapid spiral of price increases," prompting a recession.
Trump actually has a point, said Jordan Weissmann at Slate​. His assertion that by increasing borrowing costs the Fed "is frustrating his efforts to juice the economy and wage a trade war using tariffs" is fairly accurate.
Does Trump really want to control the Fed? No, said Tyler Cowen at Bloomberg, "in essence, Trump wants a fall guy." If his trade war "or just plain bad luck" rattles the U.S. economy, the Fed is a convenient scapegoat.
I don't think the Fed is all that squeeky clean either....
When George H.W. Bush tried the same thing in 1992, Alan Greenspan's Fed "held firm," and Greenspan may even have avoided cutting interest rates to show that the Fed couldn't be pushed around. Unemployment stayed high, and Bush lost the election.
Yea, but as we are finding out, Trump is not a typical politician....

Wasn't dealing with 'the Fed' one of Trump's campaign promises rants?
Then Skank Of America could start in...

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Re: Trump vs. the Fed

Post by WildCat » Thu Oct 11, 2018 11:51 pm

It was widely reported that the Obama administration was pressuring the Fed to raise interest rates, albeit not publicly. Obama wanted then to raise interest rates as evidence the economy was improving.
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Re: Trump vs. the Fed

Post by Witness » Thu Oct 11, 2018 11:53 pm