Trump won't be happy until Powell slashes rates as far as possible in order to juice the economy before the election—but the Fed chief has signaled that’s unlikely to happen
Since the Fed’s last meeting, on July 31, Trump has tweeted or retweeted 43 times criticizing the central bank and calling for deeper rate cuts. He has called Powell a “bonehead” and “enemy” for not lowering rates faster.
Meanwhile, there’s good reason, in addition to trade war worries, for the Fed to ignore the perennial bankruptcy-artist-in-chief: On top of political pressures, the Fed faced an unusual situation this week where the interest rate on overnight loans to banks spiked above 8%, well above the Fed’s target and the highest level since the last financial crisis. Powell downplayed concerns about the situation and said the central bank would continue to pump a bit more money into the system to get the rate back down under 2%.
“Lots of people are drawing parallels to 2008. Lehman caused this problem and it revealed tons of leverage in the system. Is this the same thing? No, net yet,” bond manager
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