President Donald J. Trump hit the Federal Reserve hard this week. Like many presidents before him, he is discovering the awful power the Fed has over the American economy. And like those presidents, both Democrat and Republican, he doesn’t like it. Most presidents aren’t like Donald Trump. They quietly submit to the Fed and its edicts. President Trump is saying it like it is. He’s mad and he’s not going to take it lying down.
What’s he so mad about? The Fed is purposely hiking interest rates to slow the economy. They claim they are worried about the economy “overheating” yet with recent stock market drops, the true result of the Fed’s actions is to stall economic growth cold in its tracks.
Seriously? They’re worried because the economy is growing too much? That’s too much winning!
The Fed is trying to throw cold water on the fire Trump’s policies have stoked and it’s totally unnecessary. Trust the free market! As market drops have shown, the economy will correct itself when needed, but after 8 years of stagnation…let the pony out of the barn and let’s just see how fast it can go.
As usual, that’s not how the masters at the Fed think. These unelected bureaucrats think they are masters of the economy and are smarter than the American consumer. Interest rates keep going up in a way that is choking capital from businesses in need of loans and causing a boisterous housing market to get the jitters. Trump is pushing back in a way the Fed is not accustomed to.
Bloomberg News reported on October 10, 2018, “President Donald Trump slammed theFederal Reserve as ‘crazy’ for its interest-rate increases this year in comments hours after the worst U.S. stock market sell-off since February.” They are crazy with power.
Interest rates have been hiked three times this year and one more hike is expected before the end of the year. Bloomberg reported that “Trump has been publicly criticizing the Fed since July for interest-rate increases and declared he was ‘not happy’ in September when the central bank raised rates for the third time this year.” Interest rate hikes are one reason why the Stock Market is going down.
The Federal Reserve needs to do less – not more.
Too bad the Fed feels the exact opposite and is overreaching again by trying to actually compete with free market companies running the instant payment systems. It’s not surprising the Fed is acting on an ill-conceived idea to supposedly improve payments systems by speeding up transfers. Right now there are numerous options for instantaneous payment systems that allow consumers to purchase products in real time. The Fed is concerned that bank-to-bank transfers take too long, yet most transactions don’t include these types of slowed methods of transactions. One can use a credit card or PayPal for instantaneous transactions without any delay. The Fed is creating a solution for a problem that doesn’t exist.
The economy is saturated with easy and fast ways to pay for things and it’s improving all the time. Ever paid with a Google App for a cup of coffee or an American Express card for a meal? According to PYMNTS.com, “even as consumers conduct commerce and pay with taps and swipes, the Federal Reserve’s infrastructure underpinning payments could use a bit of modernization in a bid to support fast payments ‘for all,’ Federal Reserve Governor Lael Brainard said in remarks made Wednesday (Oct. 3).”
The truth is that the Fed is trying to expand its influence into yet another area of the economy that will do nothing but be harmful to our suddenly thriving private sector.
The Federal Reserve needs an audit and then a severe reduction in the powers that it wields. The so called “Dual Mandate” that allows the fed to make changes to interest rates to keep unemployment low, is a government intrusion into the economy that is unwarranted and unwise. The Fed should leave the economy along and stop creating chaos unnecessarily with increases in interest rates and interfering with private sector payment systems.