President Trump, who blasted the Fed several times for keeping interest rates too low to help Hillary, now claims the Fed is hiking too fast.
Says He hasn’t spoken to Fed Chair Powell but Trump Criticizes Fed Rate Increases Again.
President Trump repeated his displeasure with higher short-term interest rates set by the Federal Reserve, but said he hadn’t spoken with Fed Chairman Jerome Powell about his frustration because he didn’t want to meddle with monetary policy.
Speaking to reporters outside the White House on Tuesday, Mr. Trump said he believed the Fed was increasing its benchmark rate too fast given the apparent lack of inflationary pressures in the economy.
“The Fed is doing what they think is necessary but I don’t like what they are doing because we have inflation really in check,” Mr. Trump said. The president said he was concerned higher rates would slow down economic growth.
“You don’t see that inflation coming back,” Mr. Trump said. “Now, at some point it will…. I just don’t think it’s necessary to go as fast” on rates.
Mr. Trump hadn’t spoken with Mr. Powell about his concerns because, he said, “I like to stay uninvolved with that.”
Three-Point Translation
- I said I don’t want to meddle, but I really do.
- I am worried about the stock market.
- Please don’t sink the stock market before the midterm elections or I may get really nasty.
Mike “Mish” Shedlock
11:35 am EST: Mr. Market says he agrees with Trump, interest rates are being raised too fast. Thank you Fed for another cluster-xxxx.
There is no such thing as rates being raised too fast, when rates are too low. And too low simply means lower than they would be sans any Fed printing, intervening, backstopping, bailing out nor existing at all.
Nobody knows what rates “should be.” Nor what anything else “should be” in an economy. If anyone did, central planning would have worked. It didn’t, doesn’t and never will. The optimal interest rates, are those set without any intervention whatsoever. The further you get from that rate, and the longer you stay there. The more damage is done. If the market rate sans Fed would be 15%, which is fairly realistic, every second spent away from that rate, simply causes more economic damage.
There’s no more “benefit” from moving more slowly towards the proper rate, than it is for someone believing 2+2=15 to be taught it is first 14, then 13, then 12…. etc., instead of informing the dimbulb it is 4 right away. Feelgood tripe about not upsetting a boat who is surfing straight towards a reef is just that: Ultimately damaging feelgood tripe. Just change course yesterday. People will adapt. They are flexible. Being more of an idiot than necessary, for longer than necessary, serves noone.
“At the same time as illegal immigrants are raping and killing Americans on a massive scale and … This statement is about as far removed from reality as possible.
Fed is hiking the rates too fast because everyone is up to their gills flooded with debt upon debt including consumers, companies, cities, states and federal government and since there is so much debt there is no longer debt carrying capacity if the interest rates rise.
In 2017 US paid 458 Billion dollars in just interest on federal debt at average 2.26%.
If the interest rate would double to 4.52% which is still low by long term standards then US government would pay 916 Billion dollars per year in interest.
At the same time as illegal immigrants are raping and killing Americans on a massive scale and even the good and hard working illegal immigrants are lowering wages and having their babies births and their families healthcare paid by American taxpayers completely economically ignorant politicians keep saying 25 billion for a wall is too expensive.
So 25 billion once to build a wall is too expensive even though USA pays 458 Billion dollars in just interest for federal debt YEARLY…
99% of politicians are economically ignorant buffoons…
Fed model through history has been:
Lower interest rates too low and cause massive malinvestment and serial bubbles.
Raise interest rates and prick the bubbles.
To fix things create another bubble instead of punishing irresponsible bankers by clearing the system by selling the debts and stocks and properties for the price the market will bear so that the new owners can start with a more healthy cost structure.
What exactly do illegal immigrants have to do with interest rates, the Fed, or debt?
Since US federal government spends billions each year for just paying the births of illegals it means US has to get that amount in debt.
Add on top of that tens of billions for other healthcare it starts adding up.
Add on top of that all the costs of courts, prison and polices dealing with illegal immigrant crime and it adds up to an even bigger number.
Then add up all welfare that gets paid to illegals in the form of SNAP-EBT foodstamps, Section-8 housing, WIC and state welfare programs with California being the most generous and it ads up even more.
Then take the costs of educating illegal immigrants kids that is expensive because of language problems and learning disabilities leading to many dropping out of school and giving the remaining who manage to graduate high school free or almost free college through government and state support.
Even those illegals who are registered for IRS get more in tax credits than they pay in federal taxes but many do not pay any tax whatsoever other than the payroll tax companies charge.
Then add up all the costs the drug epidemic causes in USA. Those drugs do not come from Mars they come through Mexico many times carried over the border by illegal immigrants.
Then add up the costs caused by USA stupidly giving birthright citizenship to kids of illegals and tourists that no other country in the world does.
Then add up the costs to society when illegal immigrants push out Americans from the work force or lower all wages in those jobs where illegal immigrants concentrate on.
Without illegal immigration since the 1990’s US would have TRILLIONS of less government debt…
I’d love to see Trump try to get nasty with the Fed. They’d grab him by the p***y so fast his hair would stand on end like a blondish/orange Don King.
If he’s been all talk on his wall and on Syria, it seems extremely unlikely he’s willing to go toe to toe with the Masters of the Universe.
Trump has been played by Koch Brothers so far through Kochie puppets VP Pence and budget director Mick Mulvaney both of whom have received massive funding from Koch Brothers through their whole political careers.
Koch Brothers oppose a wall and want amnesty and much more low wage immigrants…
Trump needs to wake up and demand funding for the wall and get rid of Mulvaney and Pence if they keep telling him to sign budget catastrophes with no wall funding.
Rapidly rising interest rates…
The great QE unwind going on full speed…
But…but…Trump said something
Trump said he wants the QE unwind to stop. Do you agree?
These puny 25bp bumps constitute “rapidly rising” rates to you? You must not have been alive for Volcker. Even the late Greenspan era was hawkish compared to this.
I agree the hikes are anything but rapid, however, I was in college when Volcker raised rates and it was a different time with inflation well above 10%. The Fed should have raised rates a long time ago or never lowered them as far to begin with. Raising rates now with the economy in slow growth will likely tip it into recession by next year. Nothing can save the stock market from a correction in my opinion so Trump will just have to take the credit for a reversal as he took credit for the increase (which was not smart).