President Donald Trump’s recent public criticism of Fed Chair Jerome Powell is a clever attempt to pre-emptively blame the Fed and its interest rate hikes for any future downturn in the US economy. The particular danger for him is that weakness could coincide with the 2020 election campaign, when he would be most vulnerable. We strongly doubt that the Fed will change its policy approach based on his cajoling (and Trump knows that). This is not a genuine threat to the Fed’s independence.
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