American Economics Thread

Jura The idiot

Jura The idiot

General
oops,
Trump Discusses Firing Fed's Powell After Latest Rate Hike, Sources Say
December 22, 2018, 5:42 AM GMT+1
  • Advisers warn ousting Fed chairman would lead to market rout
  • President’s legal authority to remove Powell is unclear
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President Donald Trump has discussed firing Federal Reserve Chairman Jerome Powell as his frustration with the central bank chief intensified following this week’s interest-rate increase and months of stock-market losses, according to four people familiar with the matter.

Advisers close to Trump aren’t convinced he would move against Powell and are hoping that the president’s latest bout of anger will dissipate over the holidays, the people said on condition of anonymity. Some of Trump’s advisers have warned him that firing Powell would be a disastrous move.

Yet the president has talked privately about firing Powell many times in the past few days, said two of the people.

Any attempt by Trump to push out Powell would have potentially devastating ripple effects across financial markets, undermining investors’ confidence in the central bank’s ability to shepherd the economy without political interference. It would come as markets have plummeted in recent weeks, with the major stock indexes already down sharply for the year.

White House spokespeople declined to comment, as did Fed spokeswoman Michelle Smith.

Trump’s public and private complaints about members of his administration have often been a first step toward their departures -- including former Attorney General Jeff Sessions, his first Secretary of State Rex Tillerson and outgoing chief of staff John Kelly.

It’s unclear how much legal authority the president has to fire Powell. The Federal Reserve Act says governors may be “removed for cause by the President.” Since the chairman is also a governor, that presumably extends to him or her, but the rules around firing the leader are legally ambiguous, as Peter Conti-Brown of the University of Pennsylvania notes in his book on Fed independence.

Such a move would represent an unprecedented challenge to the Fed’s independence. Though he was nominated by the president, Powell was thought to be insulated from Trump’s dissatisfaction by a tradition of respect for the independence of the central bank.

That separation of politics from monetary policy is supposed to instill confidence that Fed officials will do what’s right for the economy over the long term rather than bend to the short-term whims of a politician.

Trump’s frustration with Powell has greatly intensified in recent days, said two of the people. Though Trump’s aim is to stop interest rate increases that slow economic growth, such a move could backfire by roiling already turbulent financial markets.

Even routine changes at the top of central banks create uncertainty in markets as investors try to assess how tough a new leader may be in preventing the economy from overheating and accelerating inflation. Another problem with dismissing a sitting Fed chief may be finding a replacement who wants assurance that he or she won’t succumb to the same fate as Powell.

Trump is in the midst of a rolling shake-up of his administration. Since the November midterm elections, he’s announced the exits of Sessions, Kelly, Interior Secretary Ryan Zinke and Defense Secretary James Mattis. At the same, the threat of a government shutdown has added to the sense among investors of disarray in Washington.

Equities just recorded their worst week since 2011, with the S&P 500 falling 7.1 percent and the Nasdaq Composite descending into a bear market. Trump has laid a lot of the blame on the Fed, saying at one point in October that the central bank was “going loco” for raising rates.

Some of Trump’s ire has been directed at Treasury Secretary Steven Mnuchin for his part in persuading the president to select Powell to lead the Fed.

Powell has borne the brunt of the criticism recently, peppered by public complaints about interest rates from the president and at least one of his advisers. Less than two weeks ago, before the Fed’s latest rate decision, Trump said Powell was “being too aggressive, far too aggressive, actually far too aggressive.” He told Reuters the central bank “would be foolish” to proceed with a rate hike.

The Fed announced a widely anticipated rate hike on Wednesday and Powell signaled he’ll be more cautious about tightening next year. But investors’ concerns over the chairman’s comments led to U.S. equities to record their steepest declines for any Federal Open Market Committee announcement day since 2011.
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Equation

Equation

Lieutenant General
Things are not looking so rosy in the land of the russian federation of trump states.

The growing U.S. soybean stockpile could come back to haunt Trump
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This does not bode well for the dear leader trump.

Third straight rout ends worst week for Dow, Nasdaq since 2008 crisis

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How the partial government shutdown affects investors
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Jura The idiot

Jura The idiot

General
Today at 8:50 AM
Jura said:
oops,
Trump Discusses Firing Fed's Powell After Latest Rate Hike, Sources Say
December 22, 2018, 5:42 AM GMT+1



    • Advisers warn ousting Fed chairman would lead to market rout
    • President’s legal authority to remove Powell is unclear
Please, Log in or Register to view URLs content!
Click to expand...
related:
Trump asking advisers if he can legally fire Fed chief

Updated 9:31 AM ET, Sat December 22, 2018
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President Donald Trump has begun polling advisers about whether he has the legal authority to fire Federal Reserve Chairman Jerome Powell, according to two people familiar with the matter, who described the President as newly furious at the Fed chief as markets tumble.
Earlier this year, Trump's advisers told the President that it was doubtful he would have the law behind him if he fired Powell. But Trump has renewed the issue after the Fed again raised its benchmark interest rate this week.
So far, the White House hasn't come to a final legal determination on Trump's authority to fire his Fed chairman, whom he nominated a year ago. The law states the President can fire a Fed governor for cause, but it hasn't been tested on the firing of a chairman.
Top West Wing economic advisers have warned Trump that firing Powell would only exacerbate the problem the President is ostensibly trying to solve: nose-diving markets. The unprecedented move would likely cause more turmoil.
Bloomberg first reported
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.
CNN has previously reported that Trump's anxiety is mounting about the economy as warning signs of a global slowdown emerge. On days when the market is down triple-digits, Trump has surveyed his team about whether he'll catch the blame. Many have told him he likely will.
Whipsaw markets and a string of steep dives have
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, according to senior officials, where for the past two years the strength of the US economy has provided steady reassurance amid even the deepest of political crises.
As Trump faces fresh vulnerability — most aspects of his life are now under investigation just as Democrats are preparing to assume control of the House — the economy no longer offers the same comfort it once did, despite rising wages and the lowest unemployment rate in half a century, according to interviews with multiple White House officials and people close to Trump.
The volatility comes after several disappointments, including General Motors'
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in Ohio and Michigan -- a business move that struck deep in the heart of MAGA country, where Trump wooed voters away from Democrats with repeated pledges to bring back lost manufacturing jobs.
Trump's trade war with China has also generated mixed political results, with tariffs biting Trump's loyal base of farmers. The President, whose advisers promised him Wall Street would love a resolution with Beijing, has been irritated that markets instead tumbled after he revived the threat of escalated tariffs if the ongoing negotiations don't bear fruit.
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Jura The idiot

Jura The idiot

General
now I've noticed they closed lower than I had thought
Today at 4:23 PM
Jura said:
Thursday at 7:41 PM
heading below 22 thousand as I write:
Dow Jones Industrial Average
22,086.28
Dec 24, 10:22 AM EST
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(I thought it'd be 21950 or so, but in fact it's 21792)

Trump still has
21792-18333 = 3459 'cushion'

Friday at 9:31 PM
Jura said:
checked
Dow: 18,332.74
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(presidential elections)

and now
22,494.87
Dec 21, 3:28 PM EST

22495-18333=4162 still
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