The Fed Trumps Trump

Policymakers at the Federal Reserve are expected to raise short-term interest rates again in December, which would be the seventh such increase since President Trump took office, and they may ratchet them higher three more times in 2019.  The number of critics of the Fed’s tightening are few, but one of them is President Trump himself, who has chastised Federal Reserve Chairman Jerome Powell, his own appointee, for the fast pace of interest rate increases.  Speaking about the Fed chairman, Trump told the Wall Street Journal on October 23 that “it almost looks like he’s happy raising interest rates.” The image is one of a 19th century banker twirling his mustache as he snaps his lash over the heads of cowering debtors. The President is right to be concerned.  Excessive Fed hawkishness right now is a serious danger to the economy.  Over the past year the move toward higher interest rates has been justified on grounds that a robust economy...(Read Full Article)