Tuesday, August 1, 2017

Did Trump Warn the Wall Street Journal That Climbing Interest Rates Will Eventually Cause a Stock Market Crash?

Politico managed to get a transcript of the entire recent Wall Street Journal interview with President Donald Trump and they have published the entire text--including when the President went off the record.

Where the President goes off record his syntax is also off.

But still what the President says off the record deserves scrutiny. It is in the context of a discussion on who Trump will name as Federal Reserve chairman when Janet Yellen's term ends on January 31, 2018  (my bold):
WSJ: Are there other names you might offer who are in the mix for the Fed?

PRESIDENT TRUMP: I’d rather not do that.

[Wall Street Journal editor-in-chief ] MR. BAKER: Kevin Warsh has been mentioned. Can we – (inaudible) –

PRESIDENT TRUMP: I haven’t – I’d rather not get involved. But I would say she is, certainly. And Gary [Cohn] is somebody that I’ve gained great – I’ve known Gary for a long time – but I’ve gained great respect for Gary working with him. So Gary certainly would be in the mix. I just don’t know if he’d like – this is off the record – if he wants to sit down. Interest rates will be moving up one-eighth of a point –

MR. BAKER: That’s the exciting stuff. (Laughter.) That’s the exciting stuff.

PRESIDENT TRUMP: Right? Yeah, exactly. And then you leave. By the way, then the market crashes and it goes through the roof. You know, what you say. And then he goes off and he’ll play golf and relax for the next 30 or –
Got that? Off the record, Trump starts to discuss Fed interest rate policy and gets out a comment about a one-eighth point hike. Then Baker interrupts him and we don't get to learn exactly where Trump is going with his comment. But then, still off the record, and a bit disjointed in his comment following the Baker interruption, Trump says, " By the way, then the market crashes and it goes through the roof."

Trump's syntax is bad and the interruption couldn't have come at a worse time in the interview but Trump does go off the record here. Why?

A reasonable guess could be that Trump knows that a series of one-eighth point interest rate hikes will eventually cause a stock market crash and he doesn't want to be on record saying that.



  1. Trump just doesn't want you to know he's an Austrian-lite.

  2. If I'm a managing editor at WSJ I'm tearing my newsroom apart until I find the leaker. Then I'm going to war with Politico. I mean doxxing their reporters and editors, hacking their emails, planting breadcrumbs, getting help from outside common enemies. You're going to scoop my organization's reporting and tarnish my relationship with the powers that be? Good luck with that.

  3. How do you square your analysis with his "and then it goes through the roof" comment?