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.
Read full article here…