Is Trump right to blame the Fed for market plunge?

Is Trump right to blame the Fed for market plunge?

Federal Reserve Chairman Jerome Powell speaks to reporters during a news conference following a two-day Federal Open Market Committee meeting in Washington on June 19, 2019. It takes a lot to kill an economic expansion, typically requiring a major shock to bring growth to a halt and trigger a U.S. recession. This week investors signaled that moment may have arrived, and one big question is whether that shock has come from President Donald Trump’s trade war or a mistake by policymakers at the Federal Reserve. As bond markets flashed concern about recession on Wednesday and major stock indices cratered, Trump put the blame squarely on the Fed for continuing to raise rates through the end of last year. Even Trump foe and New York Times economics columnist Paul Krugman dinged the Fed for "a clear mistake." In raising interest rates four times last year "the Federal Reserve acted far too quickly, and now is very, very late," in reversing itself and cutting borrowing costs only modestly so far, Trump tweeted. "Too bad, so much to gain on the upside!" Earlier on Wednesday, White House trade adviser Peter Navarro told Fox Business Network the central bank should cut rates by half a percentage point "as soon as possible," an action he claimed would lead "to 30,000 on the Dow." A cut of that magnitude would typically be associated with serious economic risk, not an economy with record low unemployment and ongoing growth. The three major indices slumped by around 3 […]

Be the first to comment

Leave a Reply

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.