Trump Setting Up Federal Reserve for Well-Deserved Blame

president Trump called on the Fed to ease again today. One cannot take anything Trump says at face value because it is almost all rhetoric. If you try, you might think the China trade deal isn't going to happen or is going to do nothing for the U.S. economy, or that Trump is looking at some very bad economic data.

A better explanation is that Trump is hedging his bets by bashing the Fed in case there is a slowdown or recession, which is what I expected him to do. The central bank will not escape blame the way it escaped in 2008. Trump could snatch political victory out of the jaws of defeat should Democrats stick with anti-Trump on everything and defend the Fed. If voters choose between blaming Trump or finally getting to hammer the banks, they are going to vote for the bank-basher 10 times out of 10.

ZH: Yields, Dollar Slide As Trump Calls For QE4

Instead of sticking with its "pause", Trump said the central bank should instead "drop" interest rates, something that markets have already priced in, adding that the central bank has "really slowed" the American economy.

Setting aside the cognitive dissonance between these comments and Trump's repeated claims that the US economy is doing "really, really well" and that companies are preparing to announce that they're "coming back" to the US...