The Federal Reserve is next. President Trump's attempt to stop the Justice Department.
It is like a matter of time until it escalates. Trump, after all, has already gone from saying he's "not thrilled" with what the Fed is doing to be "very unhappy" Fed is independent only "in theory."
We are going to get closer to the 2020 election. There are two reasons for this. The first is the Fed has set for the past two years. While it did not raise them at its meeting on Thursday, it made a point of reiterating more rate hikes. Why would not they? Trump pushed to $ 1.5 trillion deficit-financed tax cut for the economy at a time when unemployment was already 4.1 percent. Up to 3% or even higher.
It might not sound like much, but it is by our current-day ones. Interest rates are still zero in both the euro zone and Japan. That means investors can do better putting their money in U.S. , In German, say, and, when the dollar goes up. Quite a bit, in fact. Consider this: Since the start of the year, 7.6% against a 20-year high basket of currencies.
This is the second reason Trump's fight with the Fed is going to be a lot uglier. A stronger dollar hurts two of the things and talks about the economy: the trade deficit and factory jobs.
It's fairly straightforward: The more the dollar gets against the other currencies, the more our exports cost in other countries. So they will buy less of what we make – especially manufactured goods – and we'll buy more of their cheaper goods. It is not necessarily an economic problem, but it can be a political one. At least it was for Democrats in 2016. That was the last time the recessive pivotal tilt pivotal Rust Belt states to Trump.
Trump is going to keep feeling threatened by the Fed. He'll fire or push out whatever he has to, if they're supposed to be independent. Federica Jerome H. Powell. That said, there is a difference here: Justice Department is only unofficially independent. The head of the Fed can be fired only "for causes," which is generally not included in the policy disagreements. That's the kind of thing that needs to be enforced by the courts.
Would they? Good question.
In the meantime, you might want to pay attention to anyone on television. Trump will be.