Where are the markets? That question has dominated coverage of Trump's disastrous tariff regime. Right now, the DOW is below 40,000, which feels psychologically significant. The bond market looks - if I'm reading this correctly - still inverted and troubled. Consumer confidence is in the toilet. Layoffs have commenced, even beyond the reckless slashing of the Federal workforce.
In other words, the economy that was the "envy of the world" is now teetering on the edge of recession and stagflation because Trump is a fucking idiot.
All of this makes Trump's sudden attacks on Fed Chief Jerome Powell even more concerning. It would be concerning regardless, because the independence of the Fed is critically important. As Krugman notes, the Fed makes mistakes, but it does so because it can be hard to discern what is happening or predict what might happen. The Fed screwed up massively in the early '30s because they literally were making up monetary policy at the time.
I think we are already in the "bad place" when it comes to relying on Federal economic data. Trump has stopped collecting data on consumer injuries, because if you aren't counting them, they aren't happening. This was his attitude towards Covid at one point. Why wouldn't he pursue this when it comes to the unemployment rate? So, if he's manipulating economic statistics - unemployment, consumer confidence, household income - why wouldn't he manipulate interest rates?
The consumer injuries is an important example, because it's not actually Trump that's doing it; it's one of his minions. The same would hold true for the Fed. Powell's term ends in May, 2026. At that point, I would anticipate that we are in the shit, economically speaking.
We have already seen immense damage done to America's basic credibility when it comes to human rights, economic stewardship, strategic alliances and basic not-being-an-asshole. If Trump gets his hands on the Fed, that's a huge, huge problem.
I'm sure Susan Collins will furrow her brow and Lisa Murkowski will write a blistering Op-Ed. Maybe by that time, two more Senate Republicans will...stop laughing...will...why won't you stop laughing?
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