Powell Howl

Late and brief thoughts on Trump’s assault on the independence of the Fed. It’s old news.now, but one way in which Trump assaulted norms, shocked investors, then flinched when asset prices moved was his discussion of firing the chairman of the Federal Reserve Board. To orthodox macroeconomists and also me this is an extreme heresy.
Discussion focused on the usual wish for lower interest rates which have good effects in the short run. I think this is sane washing – ascribing normal grownup motivations for Trump’s impulses. I suspect the motivation was Powell’s criticism of Trump’s tariffs. The criticism was very diplomatic, but Trump’s skin is very, very thin.

It’s just a guess, but I think it is, perhaps, mildly interesting.