Federal Rate Cut Disrespects Trump and Causes Sheer Panic
Where are the trust and the vision for the plan that the president has for the nation? The Federal Reserve Chairman Jay Powell had shaky knees when he authorized an interest rate cut for the United States. The adage that things cannot stay good for long was prying into his shaky soul. The Federal Reserve cut the interest rate by a quarter percent. These kinds of cuts do not show support to a president that has gone all-in to help improve the economy.
The United States economy has never been better. Since the president took office every prediction by way of growth has been met and even exceed by a large margin. There are now more jobs that are available for people to choose from than workers to fill them. Whatever made Powell nervous certainly got him good. Shaky Powell did not show support to the president when he cut the rate. This is the reason why he was blasted by the president when the dirt settled.
For many Americas, the percentage rate on the interest-bearing accounts dropped by quite a bit. This, in turn, leads to a loss of income that they were counting on. President Trump put out the following tweet when he blasted Powell “Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! A terrible communicator!” and the president is right. In many cases, the best thing to do when nervousness sets in is to not do anything at all. But shaky Powell just could not leave well enough alone.
Powell could lose his job over this when it is all said and done. And maybe he should. A loss of a job would teach the next chairperson to work with the president before making any moves or changes that could potentially hurt millions of people. The Federal Reserve is trying to make the country more competitive. But the way they are going about it makes no sense.
Next, on Powell’s radar are short-term rates. These rates are low but higher compared to other nations. Right now those rates stand at 1.75 percent and 2.0 percent. Most other countries have a 0 percent short-term rate which attracts more business than the United States rate. The Federal Reserve and Powell just need to sit still and watch the changes that the president has made and what it will do for the economy. Let growth happen and stop trying to control it all the time.
When money is left in the hands of the people they will spend it and invest it. Many companies will hire more people just to increase their earning potential through increased sales. This is what fuels the economy and keeps rates low in the first place. Competition in the market has a way of combating inflation. President Trump is a successful businessman. He knows what he is talking about.
For years other presidents would never involve themselves with the Federal Reserve. But not this president. He has too much knowledge and experience to offer. This is one reason why President Trump got mad at Powell when he cut the rate as he did. The president wants the rate to zero. He wants the Federal Reserve to stop monkey around and just lower the rate. He stated “The Federal Reserve should get our interest rates down to ZERO, or less, and we should then start to refinance our debt. INTEREST COST COULD BE BROUGHT WAY DOWN, while at the same time substantially lengthening the term. We have a great currency, power, and balance sheet.”
He went on to blast Powell when he finished saying “…The USA should always be paying the lowest rate. No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing. A once in a lifetime opportunity that we are missing because of ‘Boneheads.’”
Powell was a “bonehead.” For some reason, he believes that he can control things better than the country itself. Take the interest rate to zero and watch how fast the economy will grow and it will keep costs and inflation lower than Powell ever could.