Tuesday, November 19, 2019

Trump Tells Fed Chairman He Wants US Interest Rates to be the Lowest in the World!

This is stunning.

In the EPJ Daily Alert, I have made clear that the Federal Reserve is aggressively pumping money into the system. This is what is causing stock market averages to hit new highs and keeping the unemployment rate as measured by the Labor Department at near 50-year lows.

But this is not apparently enough for President Trump.

He met Monday morning with Fed chairman Jay Powell in the residence part of the White House.

Trump is now stating that during that meeting he told Powell that he wanted US interest rates even lower. He said he wants US interest rates to be the lowest in the world!

That would, of course, mean negative interest rates. The current short-term interest rate in Switzerland is -0.75%.
It is doubtful that Powell will lower rates to the level Trump says he wants.

It would be disastrous. Even now with the effective Fed Funds rate trading around 1.55%, I am warning in the  ALERT that a climb in price inflation is very likely. The amount of money that would be required for the Fed to push short-term interest rates into negative territory would be massive, possibly trillions. It could push price inflation to double-digit levels not seen since the late 1970s-early 1980s.

But Trump, apparently, doesn't see a problem. He doesn't want to end the Fed. He wants to put the Fed on money printing steroids.


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