Aug 6, 2019

Ex-Fed chairs emphasize need for independence in joint WSJ op-ed

Photo: ANDREW CABALLERO-REYNOLDS/AFP/Getty Images

All 4 living former Fed chairs co-signed an op-ed in the Wall Street Journal Monday, warning of the troubles with a Federal Reserve beholden to short-term politics instead of independently working to meet its mandates of maximum employment and stable prices.

Why it matters: Current Fed chairman Jerome Powell has faced mounting (and unusual) criticism and pressure from President Trump to cut interest rates — something he finally did last week. As Axios's Felix Salmon notes, it'll only make it harder for Powell to maintain an appearance of independence.

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Jerome Powell: Trade wars weighing on economy, no word on cuts

Photo: Andrew Caballero-Reynolds/AFP/Getty Images

Fed Chair Jay Powell said in a closely watched speech Friday that the central bank is ready to support economic growth but "stopped short of signaling the start of a more aggressive easing campaign," the Wall Street Journal reports.

Why it matters: Worries of an economic downturn have increased in recent weeks, and Powell warned that "trade policy uncertainty" is a driving factor for the market's fears. President Trump has stepped up his calls for the Fed to do more to stimulate the economy — going so far as to tweet just minutes before Powell's speech — even though interest rates are already near historic lows.

Go deeperArrowAug 23, 2019

Investors are betting on multiple Fed rate cuts by year-end

Data: CME Group; Chart: Andrew Witherspoon/Axios

Despite Fed chair Jay Powell's "hawkish" rate cut last month, expectations for more cuts from the Fed are growing, thanks in large part to President Trump and the trade war.

What's happening: Investors are now pricing in a 0% chance the Fed doesn't move at its next meeting in September and a nearly 50% likelihood of 3 rate cuts by year-end.

Go deeperArrowAug 7, 2019

Fed tweets show Trump doesn't understand central banking

Trump announces Powell as his Federal Reserve nominee in November 2017. Photo: Drew Angerer/Getty Images)

President Trump's latest tweets have continued a pattern of attacking the Federal Reserve and his handpicked chairman Jerome Powell for months using a mix of half-truths, mischaracterizations and hyperbolic fantasies, such as a claim that the stock market would be 10,000 points higher if not for the Fed.

Driving the news: On Wednesday morning, Trump said on Twitter that the Fed "cannot 'mentally' keep up with the competition - other countries. At the G-7 in France, all of the other Leaders were giddy about how low their Interest Costs have gone. Germany is actually “getting paid” to borrow money - ZERO INTEREST PLUS! No Clue Fed!"

Go deeperArrowAug 29, 2019