Tuesday, April 2, 2019

Trump to Fed Chairman Powell: ‘I Guess I’m Stuck With You’

Update below: Kudlow explains.

President Trump continues to bad mouth Fed Chairman Jay Powell in meetings with others at the White House.

The Wall Street Journal reports:
President Trump is blaming the Federal Reserve for holding back the economy and stock market despite the central bank’s recent decision to do two things he wanted—halt rate increases and stop shrinking its asset portfolio.

The president blasted the Fed and Chairman Jerome Powell at three meetings in the past week alone, telling Republican senators, supporters and staffers that if it wasn’t for the central bank’s past rate increases, economic output and stocks would be higher and the U.S. budget deficit would be rising less.

“He was pretty rough,” said one person who directly heard the comments at one of the meetings. Mr. Trump also blamed Treasury Secretary Steven Mnuchin for recommending Mr. Powell for the top Fed job. “Mnuchin gave me this guy,” Mr. Trump said.

Mr. Trump recalled a recent phone conversation he had with Mr. Powell, this person said. “I guess I’m stuck with you,” the president recalled telling Mr. Powell. The Fed chief took a brief phone call from Mr. Trump on March 8, a Fed spokeswoman said when asked about the conversation, declining to elaborate further. The phone conversation hasn’t previously been reported.

The president continued to gripe about Mr. Powell during a policy briefing with staffers on an unrelated matter at the White House on Monday, according to an administration official. 
Trump at heart is a monetary inflationist, which is the driver of the business cycle. You can get away with this until the price inflation starts to roar and then, because of the additional money printing, it is an even worse crash that occurs as the Fed hikes rates to battle the accelerating price inflation.

Putting pressure on a Fed chairman to maintain an easy money policy is one of the worst things a president can do for the economy. It never ends well.



Via Nick Timiraos at The Wall Street Journal:

Kudlow offered the following spin on the "stuck with you" comment Wednesday:

"The president may have said that lovingly. Lovingly, you know what I mean?"

"I wasn't on the conversation. Just opening up that possibility. A loving, affectionate kind of huggy thing on the phone."

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