Written by Bruce J. Clark
April 4, 2019
Here in Washington, DC, packing the courts is a charge frequently used by both parties to accuse political opponents of trying to influence judicial outcomes by getting their guys of similar ideology seated on the bench. This comes to mind with news that President Trump intends to elevate Herman Caine to join recently-appointed Steve Moore to the Fed https://on.wsj.com/2CX3vBv. By putting forward two notable inflation doves (and political allies,) it’s clear that the President is trying to tip the balance of power on the board to favor a more market-friendly composition. Wasting no time, Moore called on the Fed to begin cutting rates immediately https://cnb.cx/2uvSWRm.
Late last year as global growth slowed and equity markets stumbled badly the president made no secret of his feelings toward the Fed, blaming them for having no ‘feel’ for market conditions as they continued to methodically raise rates https://reut.rs/2ONDd9M . The data since then suggests Trump was right. As the stimulative impact of last year’s tax cuts fades and signs of weakness in the economy intensify, Trump is leaving nothing to chance. For a president that often references the Dow as a benchmark for economic policy success, he intends for the Fed to be his electoral insurance policy.