Trump hits out at the Fed as his plans for the board misfire

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His other candidate, the conservative economics commentator Stephen Moore, while drawing criticism for lacking the requisite credentials, may yet be endorsed. The backlash to his attempt to stack the board with Trump partisans appears, however, to have riled the President.

In a sense Trump is right. If the Fed were to reinstate the quantitative easing policies it adopted in response to the global financial crisis and started cutting rates again, flooding the markets with ultra-cheap funds, the US economy might well take-off again, momentarily and unsustainably.

With GDP growth of 2.9 per cent last year and unemployment at record lows, however, no responsible central bank is going to consider resorting to emergency measures while there is no evidence of an emergency.

When Trump said the market could be 5000 to 10,000 points higher if the Fed did its job (its actual mandate from Congress is to promote maximum employment, stable prices, and moderate long-term interest rates), he was presumably referring to the Dow Jones Index rather than the broader S&P 500.

The Dow, like the S&P 500, fell 19 per cent between early October and late December last year. Since then, however, it has rebounded 21 per cent. It has risen more than 13 per cent since the start of this year and is about 8.5 per cent higher than it was a year ago.

If Trump had his way and his conclusions were proven correct, the US market would be between 28 per cent and 43 per cent higher than it was a year ago.

Donald Trump said the market could be 5000 to 10,000 points higher if the Fed did its job.Credit:AAP

That’s despite US GDP growth slowing from an annualised rate that peaked at around 4 per cent in the first half

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