Economy 52,844 Posted October 11, 2018 Share Posted October 11, 2018 https://www.bnnbloomberg.ca/central-bankers-defend-fed-after-trump-accuses-it-of-going-loco-1.1150764 Trump used to slam the Federal Reserve for easy money policy that inflated asset bubbles and encouraged high consumer debt and created short term growth at the expense of long term stability. As soon as he became president and became afraid rising rates might derail his beloved booming economy, he changed stance and has been saying rates should stay low. Trump has been pressuring Powell and his committee to stop raising rates. When Powell ignored Trump and has continued raising rates, Trump has now thrown an insult that the Fed has gone crazy raising rates In the meantime other Central Bankers in other Countries have come to Powell's defence saying Trump has no jurisdiction on the Central Bank, that it is seperate from politics for a reason, and that Powell knows what he's doing while Trump does not Link to post Share on other sites More sharing options...
MJHolland 12,725 Posted October 11, 2018 Share Posted October 11, 2018 no f*cking way Literally none of our institutions are safe. I guarentee you that Trump didn't know the president is supposed to be isolated from the Fed for this exact reason. And he appointed a HAWK TO RUN THE FED! It was the first time in decades that a Fed Chair wasn't given at least a second term. What did he think was gonna happen . It goes without saying, but what an idiot. Link to post Share on other sites More sharing options...
rumours 45,521 Posted October 11, 2018 Share Posted October 11, 2018 I’ve gone on rants about quantitative easing before... let’s just say I don’t agree that we should continue that type of fed action at this time. Link to post Share on other sites More sharing options...
Economy 52,844 Posted October 11, 2018 Author Share Posted October 11, 2018 3 minutes ago, Rumours1977 said: I’ve gone on rants about quantitative easing before... let’s just say I don’t agree that we should continue that type of fed action at this time. QE ended in 2015. The US is actually started selling back assets it bought from Quantitative Easing back and removing the liquidity from the system I agree it shouldn't have been done but at least it's reversing the QE. The European Union is still doing it and Japan has been doing it on and off for over a decade Link to post Share on other sites More sharing options...
Economy 52,844 Posted October 11, 2018 Author Share Posted October 11, 2018 12 minutes ago, MJHolland said: no f*cking way Literally none of our institutions are safe. I guarentee you that Trump didn't know the president is supposed to be isolated from the Fed for this exact reason. And he appointed a HAWK TO RUN THE FED! It was the first time in decades that a Fed Chair wasn't given at least a second term. What did he think was gonna happen . It goes without saying, but what an idiot. He doesn't know boundaries this guy History has shown us time and time again what happens when Central Banks get influenced by politics. They can no longer do their jobs in peace and the financial system goes to disaster. Rates kept low during economic expansion is also a recipe for disaster and possibly high Inflation Both his interface and what he's asking for is a nono Tbh I think he knows there's vulnerabilities in the US economy and wants to be able to blame the Fed if it goes to sh*t and say "I told you so" Link to post Share on other sites More sharing options...
rumours 45,521 Posted October 11, 2018 Share Posted October 11, 2018 3 minutes ago, Economy said: QE ended in 2015. The US is actually started selling back assets it bought from Quantitative Easing back and removing the liquidity from the system I agree it shouldn't have been done but at least it's reversing the QE. The European Union is still doing it and Japan has been doing it on and off for over a decade I’m aware that it ended. I meant I don’t want Trump to somehow influence (which he shouldn’t be able to do since the fed is supposed to be independent) them to lower rates and continue this type of policy which was in place for too long imo. Sorry if I wasn’t clear. Link to post Share on other sites More sharing options...
MJHolland 12,725 Posted October 11, 2018 Share Posted October 11, 2018 14 minutes ago, Rumours1977 said: I’ve gone on rants about quantitative easing before... let’s just say I don’t agree that we should continue that type of fed action at this time. Who is saying we should be QE lol? Link to post Share on other sites More sharing options...
Economy 52,844 Posted October 11, 2018 Author Share Posted October 11, 2018 3 minutes ago, Rumours1977 said: I’m aware that it ended. I meant I don’t want Trump to somehow influence (which he shouldn’t be able to do since the fed is supposed to be independent) them to lower rates and continue this type of policy which was in place for too long imo. Sorry if I wasn’t clear. Oh yes ok yeah I agree. I never agreed with QE As for rates I think rates at 0% for the first few years was ok because credit was tight and people weren't borrowing much anyway with the low consumer confidence and banks weren't lending much anyway During the deleveraging process that lasted until 2011-2012 I think low rates was good because it helped people lower their payments and get buy better without making consumer debt worse since borrowing was limited But after that phase ended rates should of started rising again and instead stayed at 0% till like 2016-2017 (I forget when the first rate hike was) and that was way too long Link to post Share on other sites More sharing options...
Economy 52,844 Posted October 11, 2018 Author Share Posted October 11, 2018 18 minutes ago, MJHolland said: Who is saying we should be QE lol? I think he meant he's just afraid Trump might pressure us to go back to it again given his pro easy money mentality he suddenly embraced upon becoming president Link to post Share on other sites More sharing options...
MJHolland 12,725 Posted October 11, 2018 Share Posted October 11, 2018 6 hours ago, Economy said: I think he meant he's just afraid Trump might pressure us to go back to it again given his pro easy money mentality he suddenly embraced upon becoming president I assumed that's what @Rumours1977 meant, but lowering interest rates does not mean quantitative easing. I would argue that the two really have very little to do with each other in practice. QE was done by the Fed when interest rates were already at 0 and couldn't drop any farther. The idea was to expand the money supply to increase bank reserves and their own ability to purchase securities. I don't know of another country that has used QE to lower interest rates specifically. Link to post Share on other sites More sharing options...
Economy 52,844 Posted October 11, 2018 Author Share Posted October 11, 2018 25 minutes ago, MJHolland said: I assumed that's what @Rumours1977 meant, but lowering interest rates does not mean quantitative easing. I would argue that the two really have very little to do with each other in practice. QE was done by the Fed when interest rates were already at 0 and couldn't drop any farther. The idea was to expand the money supply to increase bank reserves and their own ability to purchase securities. I don't know of another country that has used QE to lower interest rates specifically. Europe is still doing QE and Japan did it first I don't know to what extent was for liquidity and for what extent it was to force yields even lower But I don't think the user made a bad connection. QE takes loose monetary Policy a step beyond rates at 0% so if Trump wants lower rates who knows what else he'd ask for Link to post Share on other sites More sharing options...
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