He’s like a walking, talking reminder of Trump’s monumental failure during his first term. Trump appointed Jerome Powell to be the chair of the Federal Reserve, and now Powell won’t do what Trump wants, with Trump calling his own appointee a “very stupid person.” The problem is that Trump wants the Fed to cut interest rates to 1% rather than the 4.25-5% it’s been since January.
Lowering the fed rate would lower the cost of borrowing money, both for the federal government and private borrowing. Lower rates make people happy, and they tend to thank the president for making them happy. But the Fed’s job isn’t to make people happy or to make the president look good. It’s to use the setting of interest rates as a tool to moderate inflation and unemployment. That’s the actual point as set forth in the Federal Reserve Act of 1913. Continue reading