This is the second post we’ve dedicated to Bill Dudley’s rather bold Bloomberg Opinion piece published Tuesday.
The first post recaps how we reached a point where one of the biggest names in US monetary policy felt compelled to openly call on his former colleagues to rebuke a sitting US president.
We’ve written voluminously about the subject before, and those who want a summary of the rationale behind Dudley’s remarks (along with a flow chart) are encouraged to read our initial take, linked below.
But in addition to forcefully making many of the points analysts and economists have been making for the better part of a year, Dudley goes out on a limb and openly calls for Jerome Powell and the Fed to orchestrate Trump’s ouster.
You can understand why we thought that deserves a dedicated, separate post. Here is the quote from Dudley:
There’s even an argument that the election itself falls within the Fed’s purview. After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.
That is as close to calling on the Fed to engineer the overthrow of the man in the Oval Office as it gets and, because Trump is everywhere and always his own worst enemy when it comes to giving his critics figurative ammunition, Dudley’s reasoning is rock-solid.
The Fed’s mandate is clearly in jeopardy, and with it, the fate of the US economy and the financial well-being of all Americans.
In addition to that, there’s a very good argument to be made that Trump represents a clear and present danger to the economic fate of the entire world.
(Earlier this month, former chairs Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen called on the White House to cease and desist from assailing the Fed.)
It’s been said on several occasions since Trump began attacking the Fed 13 months ago that the one person with the power to summarily boot the president from 1600 Penn. is Jerome Powell.
On Tuesday, Bill Dudley called on the Fed chair to wield that power.
(An abridged history of Trump’s Fed attacks via Goldman – updated through early August)