PrefBlog

So, there are disconcerting rumblings about the Fed:

Elon Musk, a key Trump backer who is expected to have considerable sway in helping shape Trump’s policies, included a “100” emoji while resharing Republican Sen. Mike Lee of Utah’s post on X calling for abolishing the Fed.

“The Executive Branch should be under the direction of the president,” Lee said Thursday in a post on X, hours after Fed Chair Jerome Powell told reporters he wouldn’t resign if Trump asked him to. “The Federal Reserve is one of many examples of how we’ve deviated from the Constitution in that regard,” Lee added. “Yet another reason why we should #EndTheFed.”
…
“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail. He will deliver,” Leavitt said in an emailed statement to CNN.

Those promises include bringing interest rates “way down,” which Trump vowed to do if elected at the National Association of Black Journalists’ annual conference in August. Presidents, however, don’t have any direct influence over the rates Americans pay to borrow money.
…
Trump floated requiring Fed officials to consult with him on interest rate decisions. That could lead to pressure on Fed officials to keep rates lower to satisfy Trump’s wishes, which in turn could reignite inflation.

During his first term, Trump also threatened to remove or demote Fed Chair Jerome Powell, whom he has at times blamed for keeping interest rates too high.

So how much would all that be worth in real life? Maybe a full point on 10-year treasuries, just for starters? All this would be on top of the firehosing of debt-funded money into the economy … well, Trump’s always been a fan of thugs like Erdogan and, I suppose, wants to do for the US what Erdogan’s done for Turkey.

What a world! “Axe the tax” is considered incisive political commentary, and a provincial party can project economic growth of 5.4% (in order to project a balanced budget, eventually) and still get a lot of votes … buckle your seatbelts, boys!

This entry was posted on Tuesday, November 12th, 2024 at 11:05 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.