Trump Cites Powell's "Lack of Vision" Seeks 100 Basis Point Rate Cut and QE

-edited

Trump blasted Fed Chair Jerome Powell in a pair of Tweets today. Trump wants huge rate cuts and possibly some QE.

No Vision

100 Basis Points and Perhaps QE

The Wall Street Journal comments Trump Calls for a Big Fed Rate Cut, Again Criticizes Central Bank Chairman.

While the president has blamed the state of the economy on the Fed pushing interest rates too high last year, many in business and at the Fed say Mr. Trump’s own trade policies have triggered market jitters and slowed business investment.

White House and campaign aides acknowledge privately that a recession would threaten Mr. Trump’s 2020 re-election campaign, which has made a booming economy a central selling point. On Tuesday, the White House has arranged a call in which National Economic Council Director Larry Kudlow is expected to reassure state and local officials about the state of the economy.

Asked in an interview on Fox News about possible economic alarm bells, White House counselor Kellyanne Conway on Monday played down the chance of a slowdown.

“It’s nice to have the mainstream media finally covering the economy, but they only cover it when they can use Sesame [Street’s] Grover word of the day, ‘recession,’ ” she said.

2011 Flashback

"No Recession in Sight": Translating Trump and Kudlow

Today's Trumpian Tweets fit right in with my precious post "No Recession in Sight": Translating Trump and Kudlow.

I doubt it, but perhaps a huge cut would buy a three-month recession delay.

That may or may not be enough time to help Trump in the 2020 election.

Mike "Mish" Shedlock

Comments (26)
No. 1-15
CautiousObserver
CautiousObserver

Gag order on Federal Reserve Bank Presidents a few days ago and now President Trump calling for 100 bps cut and more QE. I imagine something is going to blow.

WCVarones
WCVarones

Let's use MMT to buy Greenland.

Sechel
Sechel

These tweets were written FOR Trump. He's never used a phrase like basis points before

Casual_Observer
Casual_Observer

If the economy is strong then why is a rate cut needed ? Anyone...anyone know the answer ? Something something D O O economics...>V O O D O O ecnomics <

Augustthegreat
Augustthegreat

Trump really needs Negative interest rate, for treasuries and for mortgages, to avoid a recession before the election.

Realist
Realist

I have been following this blog for 5 years. In that entire time Mish has been expecting a recession. I have been expecting continued slow growth. This is one of the areas that we disagree on. Of course, eventually, there will be a recession and Mish will be correct. Timing is still uncertain. Australia hasn’t had a recession in 27 years. Canada had one recession in 27 years. The US had 2. Perhaps the US will suffer a 3rd recession soon. But I still don’t see it.

I am still in the slow growth camp at this point, and I see no reason to change yet. The US economy is slowing, but I’m sure that Trump will do everything he can to keep the ball rolling for quite a while.

Examples: Trump is trying to force the Fed to cut rates drastically. He keeps backtracking on his tough trade talk/actions. He is running up the debt as fast as he can to support the economy.

If only he hadn’t started so many trade disputes, the economy would be even better.

Bam_Man
Bam_Man

With $23 TRILLION in debt and $75 TRILLION in unfunded mandates, they cannot wait to implement MMT. The only way "forward" at this point (if you could call it that) is to print, print, print, and use some fancy sounding name to describe it. Trump is just the messenger.

Flatlaxity
Flatlaxity

Politics and the presumption of power…It is hard for me to see Powell right now ,having to reduce the funds rate at all. We’ve been fortunate to have a healthy economy with low unemployment and inflation, relative to other developed nations now strongly venturing into negative yield territory. We, on the other hand, had been raising interest rates, beginning to work down the balance sheet, and now have reduced the funds rate 25 basis points and advancing the balance sheet draw-down cessation by two months.

Is a recession coming here? Right now we’ve got a bifurcated economy with manufacturing/production (11 percent of GDP) flagging and the much larger goods and services sector (circa 60 percent) still in the positive mode. Sure, we’ve seen Germany with a recent negative GDP posting following a manufacturing (20 percent of GDP) drag with goods and services area finally also keeling over. Are we going to follow? Who knows? It’s up to the consumer who is still buying.

Casual_Observer
Casual_Observer

BTW, we will be in a full blown recession come April of 2020. This will, needless to say, change the dynamic. Even with low interest rates, the problems cannot be solved with more debt. 90% of GDP was debt induced according to latest NYFed numbers. Expect the unexpected after low growth is done.

Bronco
Bronco

Really enjoyed the Jon Stewart show. Sad that a comedian had to be the only one hoo bothered to peek behind the curtain. My favorite segment - bar none - was when Stewart would queue up a video of some politician saying one thing ... and then follow it with another video of same politician saying the exact opposite.

Maximus_Minimus
Maximus_Minimus

The best economy in the universe, got it. If it wasn't for accumulation of debt up the wazoo, which necessitates ever lower interest rates to keep the economy from imploding, we would be in a deep shite. And the downward spiral keeps turning. When it stops and it will, basic food will be at a premium.

Sechel
Sechel

Trump says the economy is strong and that we need a hundred basis point drop in rates. Both cannot be true.

Sechel
Sechel

Low rates will wreak havoc with savers and the insurance industry; two groups that must fund liabilities. Equities are not a substitute.

lol
lol

Economy ,at least what little is left of the private sector collapsed a decade ago,only thing that has grown in 10 YEARS is...…...GOVERMENT! And with the vast majority receiving a check from govt ,a subsidy from govt,a govt contract,govt handout,govt loan,govt this,govt that el presidente is right...…..only thing left on the collapse carousel is....wait for it......if you said big govt ,you are correct!

Webej
Webej

If a lower dollar is good for everybody (US and the rest of the World), why stop at 100 basis points, why not make it go to par with the Japanese yen? Then everything would be fantastic.