Dear Commons Community,
President Trump responded to falling stock prices yesterday by throwing barbs at the Federal Reserve, which he has described as “crazy,” “loco,” “going wild” and “out of control” for slowly and wisely raising interest rates against the backdrop of a booming economy. Trump shows again that he enjoys finding fault with others whenever something displeases him. As reported by the New York Times:
“No other modern president has publicly attacked the Fed with such venom or frequency. Indeed, some scholars said the only close historical parallel was with President Andrew Jackson, who campaigned successfully in the 1830s to close the Fed’s predecessor, the Second Bank of the United States.
Mr. Trump’s pointed remarks reflect the high political stakes less than a month before midterm elections that have been cast by his political opponents as a referendum on his presidency. Mr. Trump has been riding the economy hard, bragging about job creation, tax cuts and reduced federal regulation, and claiming credit for the rise of the stock market. Now that the market has lost 5 percent of its value in the last week, Mr. Trump is insisting someone else is to blame.
The Standard & Poor’s 500 stock index closed at 2,728.37 on Thursday, down 2.06 percent.
In fact, despite the stock market’s plunge, the American economy continues to grow, which is what is prompting the Fed to raise interest rates and drawing the president’s ire. The Fed’s chairman, Jerome H. Powell, has said that the economy is in a “particularly bright moment” and that he sees no clouds on the horizon.
The stock market sell-off instead appears to reflect the movement of money into bonds, a normal consequence of higher interest rates since those securities pay more as rates rise; concern about the health of the global economy; and hesitations about the value of tech stocks.
But after hitching his political fortunes to the rise of the stock market, Mr. Trump is now looking to decouple himself from its fall. Republicans are instead emphasizing continued economic growth and the lowest unemployment rate since 1969.”
Time to fly the crying “Baby Trump” balloon over Wall Street!
Tony
