Is Trump Starting To Lean On The Fed Or Setting It Up?
President Trump said in an interview with CNBC’s Joe Kernan this morning he “does not agree”, is not “thrilled” or “happy” with the FOMC’s interest rate hikes. The full interview and transcripts will be available tomorrow.
Click here for excerpt of interview
You Heard It Here First
Presidents never, or rarely comment on monetary policy or currency market moves. for that matter, x/ the hackneyed meme “a strong dollar is the best interest of the United States.”
President Trump hit them all in this interview today, from the Fed to the Euro and Chinese RMB (“dropping like a rock”). It doesn’t surprise us.
Recall our March 21st post, The Biggest Risk At The Fed.
But this doesn’t concern us as much as the Fed’s independence.
“Just let it rip”
That is we are worried more about the freedom from White House pressure and interference in conducting monetary policy than getting a few bps wrong on the Fed Funds rate. This is especially true and relevant given the strongman tendencies and lack of respect for institutional norms of the current president.
Here is Larry Kudlow, the president’s new chief economic adviser:
“Just let it rip, for heaven’s sake,” Kudlow said of economic growth in the U.S., during a more than hour-long interview Wednesday on CNBC. “The market’s going to take care of itself. The whole story’s going to take care of itself. The Fed’s going to do what it has to do, but I hope they don’t overdo it.” – CNN
– Global Macro Monitor, March 21, 2018
We were assured by Fed insiders shortly after that post in March Chairman Jerome Powell was tough and we should not underestimate his independence. He has thus far proven to be an extraordinarily competent Fed leader.
…click on the above link to read the rest of the article…
