TRUMP IS RIGHT to Lash Out at Jerome Powell – Dow Down 2,700 Points Since Fed Chairman’s Careless Threat on Oct. 3rd
Guest post by Joe Hoft
On Monday December 17, 2018, President Trump tweeted out a fresh attack on the the Federal Reserve.
The Fed is clearly a political machine not working in the interest of President Trump or the American people. As a result of Fed policies Americans are being bound with massive interest payments on Obama debt for years to come.
The Dow Jones shrank by 2,700 points since the Fed’s Jerome Powell’s insidious comments in early October to continue to increase interest rates. The DOW reached another all-time high on October 3rd reaching 26,829. It was up for the 103rd time since Donald Trump was elected President and 46% since the November 2016 election. This was clearly too much for the Fed’s Powell who then scared investors with his message that he will raise rates well into next year.
Federal Reserve Chairman Jerome Powell said the central bank has a ways to go yet before it gets interest rates to where they are neither restrictive nor accommodative.
In a question-and-answer session Wednesday with Judy Woodruff of PBS, Powell said the Fed no longer needs the policies that were in place that pulled the economy out of the financial crisis malaise.
“The really extremely accommodative low interest rates that we needed when the economy was quite weak, we don’t need those anymore. They’re not appropriate anymore,” Powell said.
“Interest rates are still acommodative, but we’re gradually moving to a place where they will be neutral,” he added. “We may go past neutral, but we’re a long way from neutral at this point, probably.”
But there is no reason to raise rates (other than to kill the economy)!
One of the top economists on the Trump team, Stephen Moore, discussed the US economy and the recent decline in US markets on FOX Business. Moore agrees with President Trump that the recent interest rate increases by the Fed have put the markets in a tailspin. In addition, these increases are costing US taxpayers trillions.
Moore was on FOX Business and he stated that the Fed has overdone it by increasing interest rates. There is no evidence that the US is facing inflation right now and therefore the Fed should not be increasing rates –
Moore is right. The Fed’s actions to increase interest rates have stalled the stock market and are costing US tax payers trillions in current and future debt payments. The Fed provided former President Obama the most generous interest rate package ever. Rates under Obama remained at 0% most of his seven years in office. In late 2015, the Fed raised rates 0.25% but this was for only one year and the only time the rates were increased in Obama’s eight years up until the 2016 election.
After President Trump won the election in 2016, the Fed started a steady program of raising interest rates. Rates were increased seven times by the Fed since the 2016 election to their current 2%.
The last rate increase in September and the Fed’s consistent pledge to raise rates effectively killed the market bull run two months ago. This resulted in billions removed from the market in gains year-to-date costing US taxpayers billions in their 401k’s.
In addition, the Fed Funds interest rate increases result in raising interest payments on the massive debt that President Trump incurred from President Obama. A 1% increase in rates results in an additional $200 billion annual interest rate payment for the US government and US taxpayers. A 2% increase results in an additional $400 billion in annual interest payments for the US tax payer to cough up.