Federal Reserve’s Interest-Rate Hikes Have Erased $5-Trillion in Market Equity

Jerome Powell, C-Span, Youtube
The stock market has been rocked ever since the October 3rd speech by Jerome Powell, Chairman of the Federal Reserve, when he promised to continue hiking interest rates. The stock market has dropped by 4,500 points, and over $5-trillion has been erased from US equity values.
The Fed lowered interest rates to 0% for the Obama Administration and kept them there for the first seven, with the exception of a increase of 0.25% in late 2015. By contrast, interest has been raised eight times since Trump was elected. The increase now stands at 2.25%.
Critics believe that the US banking’ cartel (known as the Federal Reserve) does not want Trump to be re-elected in 2020 and has been incrementally raising interest rates to put an end to a rising economy under Trump. The new rates of interest introduced by Powell added $500-billion to the federal government’s annual debt that now stands at $21.8 trillion. Treasury Secretary Steven Mnuchin wrote that Trump said he will not fire Chairman Jay Powell.
[Of course not. The Fed has more power over the President than the President has over the Fed. For details, see Creature from Jekyll Island; A Second Look at the Federal Reserve.] -GEG

The Fed and its Head – Jerome Powell – have increased rates so much since President Trump’s election that they have added $500 billion to the annual budget in interest payments alone.  This annual payment is 100 times greater than the one time payment of $5 billion that President Trump is requesting for  border security.

Who says the Fed is an independent agency and not biased?  Just look at the Fed’s rate increases this century and this all falls apart.  The Fed lowered interest rates to 0% for the Obama Administration and kept these rates at 0% for the first 7 of Obama’s year in office.  Finally, the Fed increased the interest rates 0.25% in late 2015 for the only increase during Obama’s Presidency up to the 2016 election.

After President Trump won the November 2016 election, the Fed began a steady program of increasing interest rates.  This program continues to this day and in total the Fed has increased rates 8 times since Trump won the Presidency.  The rates now stand at 2.25% and as a result of these horrible and political policies, the Trump economy and Americans’ 401(k)’s are being diminished.

Top US economist Stephen Moore stated –

Unfortunately, if you cut engine power too far on a jetliner, it will stall and drop out of the sky.

On Wednesday, December 19, despite the numerous market-based alarms that were sounding in the cockpit, Chairman Powell and his co-pilots on the FOMC voted to raise the Fed Funds rate to 2.50%. This sucks more dollars out of the economy at a time when the world demanding more dollars – thanks to Trump’s Tax cutting and deregulation policies.

Chairman Powell has been entirely tone deaf to the financial markets he seeks to protect. The Dow Jones Industrial average, which had risen by 382 points on hopes that the Fed would listen to President Trump and stop cutting power, plunged by 895 points after the 2:00 PM announcement, and closed the day down 352 points (1.49%). Poof, trillions of dollars of wealth vanished.

Since its peak on October 3, which, not coincidentally, was right after Chairman Powell gave a speech suggesting that the Fed might be through tightening money, the Dow has fallen by more than 3,500 points [now 4,500]. Market fears about his bad judgment have cut the value of all U.S. stocks by about $4.5 trillion, which is enough to buy 16,000 Boeing 787 Dreamliners.

The Fed economists use twisted logic that the economy is “strong enough” to absorb the rate hikes – which is simply an admission that their policy will slow growth.

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