Trump: ‘The Fed Loves Watching US Manufacturers Struggle’

Donald Trump launched into his first post-G-7 Fed critique shortly after lunchtime on Tuesday, accusing the central bank of reveling in the purported misery of unnamed American manufacturers. "The Federal Reserve loves watching our manufacturers struggle with their exports to the benefit of other parts of the world", Trump assessed. The president's comments came hours after Bloomberg published an Op-Ed penned by Bill Dudley, who called on the Fed to openly rebuke Trump and suggested the centra

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3 thoughts on “Trump: ‘The Fed Loves Watching US Manufacturers Struggle’

  1. Instead of blaming the Fed or having them in an equation, is to understand that the trouble with most economies today is rooted in the fact that the majority of wealthy people are not investing private investment, instead of investing in new infrastructure or expanding spending in future growth (for industry) these wealthy tycoons are playing with derivatives and supercharging their personal wealth, while future value decays. This is actually a fairly interesting area of research, which dates back centuries, and even the stupid Fed mentioned a few months ago:

    “Real nonresidential private fixed investment appeared soft in the second quarter. Real private expenditures for business equipment and intellectual property looked to be roughly flat, as nominal shipments of nondefense capital goods excluding aircraft moved sideways in April. Forward-looking indicators of business equipment spending pointed to possible decreases in the near term. ”

    Here’s a FRED chart:

    Also see: The absence of spatial correlation in the fitted residuals raises the possibility that the factors that lead countries within a region to follow similar growth paths work through the rate of equipment investment.

    Also: DeLong and Summers (1991) found that the post-World War II cross-
    country dataset contained an extraordinarily strong correlation between
    growth and private investment in machinery and equipment. Public
    investment by state-owned monopolies did not do it. Investment in
    structures did not do it. The correlation was very strong in OECD-class
    and middle-income economies.

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