Well, what do you know! It turns out that amateur economist Donald J. Trump knows more about sound monetary policy than Fed chairman Jerome Powell and his team of hundreds of Ph.D. economists.
Call it street smarts or call it business moxie, but Trump was dead right when he attacked the Fed, first in September and then even more savagely after the Fed’s Christmas Eve rate hike massacre, which closed the day on a 650-point crash in the Dow Jones Industrial Average. More than 500 points of that blood spillage occurring while Powell was making his economically hapless rate hike announcement.
The political left and the media rallied around the Fed’s actions and could hardly have been more disdainful of the president on this issue. They seemed to want the economy to falter so as to discredit Trump’s policies.
The New York Times and others scolded: How dare Trump attack the economic oracles at the Temple? The left has acted as if Powell has some kind of divine infallibility — as if he were the pope.
But of course, we learned with the $4 trillion meltdown in the stock market that the Fed is not just fallible, but has lost its grip on the steering wheel.
Fortunately, this week, the Fed put its tail between its legs, and, as The Wall Street Journal put it, issued its “apology” by signaling to financial markets that no more rate hikes are likely this year. The retreat by the Fed began shortly after Christmas and — eureka — markets are healthy again (though still rightly skittish about the China trade war). After the Fed started backing off the threat of even tighter money in 2019, commodity prices pulled out of their dangerous