According to sources, a stern President Trump took Fed head Jerome Powell to the woodshed yesterday in their Oval Office meeting. Of course, Mr. Trump wants the Fed to lower its target rate. And equally, of course, Powell has stubbornly avoided any policy changes. But you know what? Trump is right on this one.
The latest inflation report out today shows the Fed’s favorite measure, the personal consumption deflator, has risen only 2.1% annually over the past three months. And the same 2.1% over the past 12 months. The Fed’s target is 2%. So, you would think Powell and Co. would at least be publicly suggesting that they have made it to home plate. And it sure makes you wonder about the Fed’s jumbo rate cut over six months ago, when the inflation rate was almost a full point higher than it is today. Commodity indicators have softened significantly – Trump is right about that, also.
By the way, if anybody cares, the money supply has been quite awesome for quite some time now. Here’s another point: President Trump’s tariff diplomacy for reciprocal free and fair trade, and his battle to open up markets for American business exports, is basically going to be on hold for a while now as a result of some more activist judges that seem determined to stand in the president’s way. Trump has been battling unfair trade practices for a long time.
The world trading system has been broken for over three decades. Important trading partners, especially China, have huge tariff and non-tariff barriers. But these activist judges who have interfered with so many of Trumpian policies to drain the swamp, are now robbing him and the American people have important leverage to even the playing field and promote American prosperity, especially the working-class coalition that backed him. So, on the one hand, we’ve got a bunch of monetary judges at the Fed standing in Trump’s way and a bunch of all around activist judges standing in Trump’s way on trade and just about everything else. You know, he is the Chief Executive. Last November 5, the country gave him a resounding yes for his policy mandates for change.
Trump wants a golden age of economic growth, just like Ronald Reagan. Trump wants a rising tide to lift all boats. But rest assured, no matter what roadblocks are thrown in his way, Trump will just keep on fighting for American greatness – just like Ronald Reagan did.
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