If you were wondering whether Donald Trump was paying attention during Wednesday’s equity market selloff, the answer would appear to be “yes”.
A little over an hour after the close on Wall Street, where stocks had their worst day since February and the Nasdaq put up the most miserable showing since Brexit, the President called the Fed nuts. I don’t know how else to put it.
Speaking to reporters on the on tarmac in Pennsylvania, Trump said the “Fed is too tight”, claimed Jerome Powell is “making a mistake” and then said the committee has “gone crazy.”
Here’s the clip:
As far as the bloodbath on Wall Street is concerned, the President said “it’s a correction we have been waiting for a long time.”
Later, Trump took this up another notch still, calling the Fed “loco”. “I don’t know what their problem is”, he said late Wednesday evening, in remarks carried by Fox News.
Trump’s comments came just 24 hours after he reiterated his criticism of U.S. monetary policy while chatting with the press ahead of a trip to Iowa on Tuesday.
If I’ve said it once, I’ve said it a thousand times: It is just a matter of time before Trump tries to commandeer U.S. monetary policy.
And no, this would not be the first time a U.S. President has overreached with regard to the Fed and no, nobody is trying to pretend like the Fed has ever been completely “independent”.
But what I think you’re going to see sooner or later is Trump going the Erdogan route and overtly taking control of things or else forcing the Fed to deliberate under the implicit threat that the White House will try to remove Fed governors who do not fall in line. There’s simply too much at stake politically for Trump to stomach more rate hikes. Hawkish Fed policy not only imperils his economic “miracle” (scare quotes there for a reason), but also undermines the stock market rally he’s been at pains to take credit for, and, perhaps most importantly, blunts the effects of the tariffs by pushing the dollar higher against the currencies of America’s trade partners.
I think it might be time to rekindle the old Twitter poll…
What will Trump's Twitter nickname for Jerome Powell be after the September hike?
— Walter White (@heisenbergrpt) August 21, 2018