Obviously, presidents can speak out if they choose to and give their opinions about policy. There’s no law against that, but I don’t think it’s wise.
That’s from your fairy godmother, Janet Yellen, who spoke in Washington on Monday at a banking forum.
She is of course referring to Donald Trump’s ongoing efforts to set up Jerome Powell as the fall guy for any prospective sustained drawdown in U.S. equities.
Last week, Trump took his Fed criticism to whole new level, castigating the committee as a cabal of “crazy”, “loco” policy hawks hell-bent on undermining his trade war and sinking the stock market.
On Thursday, while speaking to reporters in the Oval Office, Trump said he’s not ready to “fire” Jerome Powell, but he did say that when it comes to monetary policy he (Trump) “knows better than they do”, where “they” is the Fed.
In her remarks in Washington, Yellen called Trump’s comments “not a desirable thing” and warned that “to politicize it is something that is essentially damaging to the Fed and to financial stability”.
Right. And as I will never tire of reminding you, had Trump just swallowed his pride and kept Yellen, he likely wouldn’t be in the position he’s in now when it comes to feeling compelled to try and jawbone the committee into adopting a dovish lean.
Because as she made clear in remarks delivered during a Brookings Institution conference last month, Yellen is in favor of the kind of pro-cyclical monetary policy that Trump is now openly calling for.
But none of this matters, does it? Because not only is everyone in Washington going to sit idly by as a reality TV show host who has failed at every, single business venture he has ever embarked on (besides being a reality TV show host) continues to berate the very people he himself appointed, all the folks out there who have for years argued that the Fed is too political will now claim that hyper-politicization is actually fine because the Fed was never independent in the first place.