Elder Patriot – The Federal Reserve is a private bank that wields enormous leverage over the U.S. economy, through its control over interest rates, and therefore it can wield enormous clout on the political landscape.
President Trump has been highly critical of Fed Chairman Jerome Powell for raising interest rates too quickly because of the resulting drag higher rates put on business expansion.
The cost of money is a close second to the amount of money needed to fund an investment. Every homebuyer realizes this when they calculate the monthly payments they might afford,
The slowdown in economic growth was predicted by President Trump because it threatens the president’s MAGA agenda.
By way of example, had the Fed raised interest rates as aggressively during Barack Obama’s first two years, and then froze them where they are today for the remained of his term in office, our national debt would be approximately $4T larger (20%.)
This would’ve guaranteed greater scrutiny on President Obama’s America Last multinational policies. Instead, the Fed (a private bank with multinational tentacles) protected Obama’s globalist economic agenda.
Trump received no such deference and Powell’s overly aggressive rate hikes – ostensibly chasing the ghost of inflation of which there had been no signs – began having the negative effect on market’s that Trump had warned about.
In comparison, without the rate increases, the president’s attempt to grow federal revenues to meet government expenditures would be $600B closer to reality.
President Trump’s MAGA economic agenda had created conditions for a whopping 35% jump (nearly 42% since Trump’s election and the market began factoring in the new president’s coming policies) in the Dow from his inauguration until mid-September 2018 before Powell’s aggressive rate policy resulted in a 10% pullback in equities.
Yesterday, Powell addressed the Economic Club of New York where he hinted that he was prepared to slow his aggressive policy towards raising rates.
As expected, at least by President Trump and his team of economic advisors, the markets reacted with amazing clarity.
As Powell was speaking the Dow exploded upwards, closing the day four hours later, sitting on greater than a 6oo-point gain.