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Now Trump Is Trash Talking Jerome Powell At The Hamptons Home Of A Hot Dog Baron

"Political things."

Speaking of Recep Tayyip Erdogan… Donald Trump.

On July 19, Trump threw a monkey wrench into the Fed’s decision calculus when, in an interview with CNBC’s Joe Kernen, the President articulated his displeasure with the current path of U.S. monetary policy.

The next day, Trump took things up another notch, explicitly blaming the Fed for undermining his efforts to engineer an economic miracle on the way to questioning the relative wisdom of Fed hikes amid the trade war.

“Tightening now hurts all that we have done”, Trump tweeted, before claiming that America is entitled to “recapture what was lost due to illegal currency manipulation and BAD Trade Deals.”

“Debt coming due & we are raising rates – Really?,” Trump went on to shout ask.

Yes, Mr. President, “really.” And in an irony of ironies, the reason that’s necessary is because when you pile fiscal stimulus atop an economy operating at full employment, you risk overheating that economy and driving up inflation. On top of that, the tariffs also risk pushing up domestic prices. Indeed, there’s evidence to support the contention that protectionism exerts steepening pressure on a Phillips curve that would already be inclined(get it? “inclined”) to reassert itself in a late-stage expansion.

Trump’s July criticism of the Fed vindicated my long-held contention that it was just a matter of time before the U.S. president morphed into his counterpart from Turkey. Here’s what I said in a February piece for Dealbreaker:

Anyway, circling back to poor (and by “poor” I mean in terms of circumstance, certainly not in terms of his massive back account) Jerome Powell, he’s going to quickly find himself in a situation where he’s getting pressure not to raise rates no matter what happens to inflation and no matter how hot the economy is running.

I don’t think everyone fully appreciates how soon-to-be precarious this is going to get for ol’ Jay. Just imagine for a second that Trump’s myopic tax cuts and stimulus end up getting him the economic sugar high he’s after and just as he’s shrieking about it at a rally, the Fed hikes rates citing an overheating economy. Trump would go crazy. He would never let that stand. I’m telling you, he’s going to turn into Erdogan when it comes to rates.

Do me a favor and read the following quotes from a speech Erdogan made back in November when inflation was spiraling out of control in Turkey and the lira was plunging:

They say central banks are independent so we shouldn’t interfere. This is the end result because we haven’t interfered. Results speak for themselves.

We will solve this, things can’t go on like this.

Who does that sound like to you? I mean besides Erdogan.

If you read the accompanying color from Bloomberg it’s even easier to imagine Trump going this route if Powell gets too aggressive. To wit:

Erdogan [is] vowing to step up a fight against what he calls the “interest rate lobby,” an alleged cabal of financiers and lobbyists that he says is conspiring to keep Turkey’s interest rates artificially high.

It’s almost too perfect a parallel. Before you know it, “the swamp” and the “American deep state” will include the Fed governors.

Anyway, don’t say I didn’t warn you.

I could scarcely have been more explicit. Or more correct.

Well, with the Fed all set to hike again in September, and with the dollar on the rise to the detriment of Trump’s trade war, the President again took aim at Jerome Powell and, implicitly, Fed independence at a fundraiser in the Hamptons over the weekend.

“President Trump said he expected Jerome Powell to be a cheap-money Fed chairman and lamented to wealthy Republican donors at a Hamptons fundraiser on Friday that his nominee instead raised interest rates,” Bloomberg reports, citing three people who witnessed what I’m sure was an absurd spectacle.

Apparently, Trump made the comments in front of some 60 people gathered at the Southampton home of Howard Lorber, the chairman of hot dog company Nathan’s Famous.

Just let that sink in. Donald Trump complained about Fed policy and lambasted his Fed chair at a dinner in the Hamptons hosted by a hot dog baron.

Never forget:

Tell us again, Mr. President, about the Fed chair being forced to do “political things”.


4 comments on “Now Trump Is Trash Talking Jerome Powell At The Hamptons Home Of A Hot Dog Baron

  1. Curt A Tyner

    H- here is a great article about what we should be pushing our congress toward:

  2. Many of my friends said the stock market was a house of cards under Obama. Strange – now everything built on that house of cards is great. Again.

    • yeah, and see that’s my point about everything Trump’s supporters say. it’s not so much that I mind Trump taking credit for things, it’s that he takes credit for things that were already happening and that he said were “fake” before him.

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