The President of the United States is doing his best to make the Chairman of the Federal Reserve an enemy. On Friday, amidst growing tensions with China and new tariffs from President Xi, President Trump focused on his number one target: Jay Powell.
A Unique Approach
Presidents haven’t always been friendly with their Federal Reserve Chairman. But in the past year, President Trump has taken the adversarial tone to a whole new level.
Trump seems to believe that it is Powell who is the chief culprit for a potential recession. If the Fed only slashed interest rates dramatically, America would have the greatest economy of all time, and Trump would win reelection in perpetuity.
But on Friday, the President elevated his rhetoric to a whole new level by calling Powell an enemy of America.
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
This, of course, was a ridiculously misguided tweet. President Xi is a foreign head of state and a not particularly friendly one. He seeks only what’s best for his regime and his people, and much more the former than the latter.
Chairman Powell, on the other hand, is a dedicated American public servant who seeks to do what’s best for the American economy. Trump’s tweet paints him as an enemy of the state, which is a preposterous mischaracterization.
Powell, of course, has remained tight-lipped. At the Jackson Hole Symposium, he hinted at potential further cuts, but also expressed his trust in the U.S. economy.
“Our challenge now,” Powell explained, “is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent.”
That is a challenge, of course, and the most important one to which the Federal Reserve should dedicate itself. Of course, they have another new challenge: convincing the American people that they’re not an enemy. How they do that is anyone’s guess. But if the President doesn’t restrain his tweeting fingers, he will drive further division in the country and further distrust of American institutions like the Fed.