The Fed’s Third Mandate is to Reelect President Trump

President Donald Trump, in his most brazen attack yet on the Federal Reserve, called for the central bank on Tuesday to cut interest rates by 1 percentage point and to implement more money-printing quantitative easing.

In a two-part tweet, the president unfavorably compared the Fed to its China counterpart and said if monetary policy in the U.S. was looser, the economy would “go up like a rocket.”

You watch, they’ll do what he says.

The next Fed action will be an easing of some sort – rate cut or maybe a cessation of quantitative tightening or maybe both. It won’t be because of unemployment rates or inflation or GDP or anything in the Beige Book. It will be Jerome Powell crying “Uncle!” from the nonstop barrage of Presidential tweets happening now in early 2019 – wait til it’s late 2019 or early 2020, closer to the election. He’ll start demanding the guy’s resignation.


The line about “China’s adding great stimulus” is hilarious if you know anything about the current condition of the Chinese economy. Google “Potemkin Village” and come back to us after…He thinks China is great and the US is the economy in need of emergency measures from the monetary authorities. Okay.

Every President wants low interest rates, Trump is not unique in wanting to see stimulus and rapid economic growth. Every President knows that this is the key to keeping the White House. LBJ literally tried to beat the s*** out of his Fed Chairman, William McChesney Martin, who did what he could to tamp down on the inflation that would end up dooming Richard Nixon a few years later in the early 1970’s (yes, Nixon only resigned because the party asked told him to ahead of a midterm election slaughter, thanks to a crashing stock market and skyrocketing oil costs).

The difference now is that Trump talks directly to his supporters through Twitter and his supporters already despise anything that smacks of New York bankers and Washington DC-based Federal power and bureaucracy and entrenched interests. He can demonize the Federal Reserve unto the point that 30 million people believe it represents some sort of globalist conspiracy designed to keep them poor and their children ugly and their wives unfaithful and their lawns unmowed. If he tweeted right now that “THE FED HATES CHRISTMAS”, it would be treated seriously tonight on a television broadcast seen in millions of homes across the country.

If LBJ had had Twitter, forget about it. Trump would have needed to come up with a whole new shtick. Now close your eyes and imagine Teddy Roosevelt tweeting. It would be the most aggressive, violent, hardcore nationalist, NSFW twitter feed of all time. @Jack would be launching himself into ashtangi contortions to justify keeping him on the platform.

Donald Trump is smarter than the Fed. Not about the economy or interest rates or any of that stuff. He’s smarter about the only thing that matters anymore – public perception. That’s why they’ll bend the knee. Everyone bends the knee eventually. It’s not like they’re going to be able to fight back in his Twitter arena. You watch what happens.

Seeing the White House take control of the Justice Department and the Supreme Court and the Senate didn’t much affect the sentiment of market participants, despite how utterly unprecedented all of this is. Maybe this one they’ll react to. Maybe not.

Now, you’re saying to yourself (or yelling at your screen) “But Josh! The Federal Reserve Chair cannot be removed by the President! That’s not how it works.” 

LOL, tell me more about the old rules. What was it like in olden times? I love your old stories about the way things used to be. So cute!

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. airport taxi cheltenham to heathrow commented on Sep 18

    … [Trackback]

    […] Info on that Topic: […]

  2. fake rolexes for sale cheap commented on Sep 18

    … [Trackback]

    […] Information on that Topic: […]

  3. eatverts commented on Sep 22

    … [Trackback]

    […] Info on that Topic: […]

  4. bitcoin era reviews commented on Sep 23

    … [Trackback]

    […] Read More here to that Topic: […]

  5. Robotic Automation testing commented on Nov 12

    … [Trackback]

    […] Read More Info here to that Topic: […]

  6. Devops consulting companies commented on Dec 01

    … [Trackback]

    […] There you will find 40266 more Information to that Topic: […]

  7. commented on Dec 06

    … [Trackback]

    […] Find More Info here on that Topic: […]

  8. Brother COMPACT OVERLOCK MACHINE manuals commented on Jan 21

    … [Trackback]

    […] Find More here on that Topic: […]