During the election, Donald Trump was a strong critic of the Federal Reserve. He was especially outspoken against its Chair, Janet Yellen.
It’s plain to see why. During Obama’s years our country has not fared well. Salaries have not risen for middle class or working class Americans since the 90’s, but the cost of living has.
While Obama bragged about helping the economy, millions of people left the work force or are now dependent on food stamps or other government programs. The billions he wasted dumping American taxpayer dollars into government agencies have not helped buoy our economic growth or GDP.
Yet somehow, even with all these bad results, Janet Yellen continues to make herself an adversary of the new administration. She’s thinking about making a dangerous move that many are interpreting as political.
From Zero Hedge:
Janet Yellen continues to demonstrate that she is either profoundly ignorant or dishonest. Neither of those are positive qualities for a Fed Chair.
Having maintained interest rates at essentially ZERO for seven years during the Obama years, Yellen suddenly believes it would be “unwise” to wait too long to raise rates now.
It’s a bizarre claim, particularly when you consider:
1) The US economy is limping along at best and entering a recession at worse (2016 GDP growth was a measly 1.9% and a the latest spate of data has all suggested a contraction is underway).
2) The Fed owns some $2.4 trillion Treasuries, which would be negatively impacted by the Fed raising rates.
3) There are over $555 TRILLION in interest-rate based derivatives floating around… which similarly would be negatively impacted by raising rates.
For the Fed to embark on an aggressive tightening cycle in the context of just one of these would be foolish… but when all three are in play? Either Janet Yellen is actively trying to sabotage the US economy for whatever reason or she has no remote understanding of economics (or possibly both).
Untangling the complexities of the U.S. economy is no easy task. It takes experience and know-how to ensure the stability and growth of our nation.
Yet Yellen seems to be lacking in a basic understanding of how our Federal Reserve should operate, or is willfully trying to damage it. Why? Perhaps she still has a Socialist mandate from Obama. Perhaps she is bitter towards President Trump.
Either way it’s time for a change at the Federal Reserve. It’s time for new blood to right that ship. The sad thing is, we’ll have to wait until 2018.
What do you think? Should President Trump wait that long to take action, or is there something he should do to keep America from possible disaster?
Source: Zero Hedge