The stock market has just closed with its worse December since 1931, and President Trump blames the Federal Reserve (the Fed) for the dropping Dow and a floundering economy. On Christmas Eve, after a disastrous stock market plunge, the President took to Twitter, declaring that the “only problem” with the U.S. economy is the Fed.
“They don’t have to feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!” Trump tweeted.
Perhaps more than any of another president in recent history, President Trump has tethered the success of his presidency to the stock market. With markets down for the year, Trump has turned his ire to what he believes is causing the market downturn – the increases in interest rates made by the Fed in 2018.
Playing With Fire?
On a recent Fox News Broadcast of “Special Report with Bret Baier,” Eli Lake, a Bloomberg Opinion columnist argued that Trump might be “playing with fire” by reigniting his feud with the Federal Reserve. While recessions are often “expected” in cycles of the economy, Lake said Trump was “making things far worse” by threatening to fire Fed chairman Jerome Powell for the decisions he makes. “There’s a reason why we want the chairman of the Federal Reserve to be independent of the president. The temptation is too great to juice the economy for a short-term benefit if you’re president and to ignore the long-term or intermediary-term consequences,” Lake said. “So in that respect, once again, President Trump is playing with fire.”
However, sitting on the same panel, conservative writer Tom Rogan said, that he felt that the activity in the stock market had more to do with some of the president’s more irregular rhetoric and actions than it does with anything the Fed is doing.
“I think the president would make a very big mistake for his own political interest and the economies were he to try to take punitive action against the Fed,” Rogan told the panel.
Kelly Jane Torrance, another conservative writer on the panel added, that it is “very clear” that Trump wants to fire Powell, but stressed that everyone is “putting a lot of emphasis on one man.” She also warned of the “volatility” that would trigger if Powell were fired but that eventually the market would “flatten out.”