The problem? It looks like the Fed just proved the President correct.
Can you say “Uh Oh?”
The real issue now facing the Federal Reserve is not only may they have just crushed any remaining credibility with their complete and utter reversal of monetary policy going forward. But, they may have done it leaving one of the most unpleasant aftertaste they’ve ever considered.
Regardless of what side of the political aisle one stands, if the “markets” falter or the economy tanks – it will be they that will be blamed, with non-other than the President having the evidence to both point the finger and tweet the charge.
Why? Both the “markets” as well as GDP began falling at the same time as they pursued an aggressive schedule of both raising interest rates, as well as shrinking the balance sheet. Something the President railed against to the sheer publicly visible repudiation through non-answers and verbal queues via Mr. Powell during conferences and interviews.
Again, regardless of what side of the political aisle one sits, the complete reversal, and then some, of what the Fed delivered yesterday in comparison to what they were proposing and promoting just two meetings ago, along with their articulated defenses of how and why they were able to do it, is nothing less than astonishing. Period – full stop.
It now appears via their own actions that for as much as they were dissing the President – they proved by their own actions yesterday that it was he that was correct. i.e., “They’re hurting all my good work!”
Again, doesn’t matter what side of the political aisle one stands – those are the facts as they stand. Whether right or wrong that’s the way it can now be spun politically. And I’ll bet dollars-to-doughnuts that’s exactly what you’ll begin to see happen should these “markets” and economy begin faltering.
Think about it.
© 2019 Mark St.Cyr