I would have guessed 10-2 or 9-3. Glad to see unanimity.
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I am surprised at the unanimity. I’d be willing to wager there was some back room shuffling before the vote; I’d be interested to see the notes when they are released.
Let’s buckle up… for a decisive shot in the foot… or more likely, a satisfying TACO.
Less than two weeks earlier, Trump threatened that if the Fed doesn’t cut rates, he will cut off trade with countries that have trade surpluses with the U.S. That group includes most of the U.S.’s top trading partners, along with dozens of other countries.
Looks like the ten year is getting comfortable peeking its head above 5%.
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Well, it is starting to look like we were right to be surprised - if the POTUS is to be believed.
“I talked to Kevin and I said, ‘you might as well vote with the board because it’s not going to matter,’” Trump told reporters Wednesday evening.
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In a press conference Wednesday afternoon, Warsh demurred on the question of presidential involvement in the Fed decision, telling reporters, “I’ve got nothing for you on a discussion with the president.”
Cute story in today’s Journal:
There is little modern precedent for a Fed chairman consulting with the president about a decision to raise interest rates.Trump’s comments made it sound like Warsh almost asked for Trump’s permission. The Fed—so far—has refused to clarify what exactly they talked about. Or, just as importantly, when the conversation took place. Did they talk Wednesday morning? Last week? How long has Trump known this? Did Warsh disclose to other members of the Fed that he had consulted with Trump?
Trump famously berated Warsh’s predecessor, Jerome Powell, for not doing more to cut interest rates. And so Warsh’s move to raise rates might have sent Trump into a tizzy. So maybe Warsh was trying to foam the runway, in a sense. But Warsh’s term as Fed chairman runs past Trump’s term. So would he consult with Trump’s successor like this? What if it’s a Democrat?
A little story.
More than 20 years ago, when I was a reporter at the American Banker newspaper, I filed a Freedom of Information Act request seeking the calendar and phone logs of then-Fed Chairman Alan Greenspan. The materials were produced the week after he left office (suspicious timing? Ya think?). The most interesting thing in the phone logs was this: Greenspan regularly consulted with a young Bush administration White House staffer about housing-finance giants Fannie Mae and Freddie Mac. This received a lot of attention because calls between the White House and “independent” Fed chair were supposed to be few and far between. That young White House staffer? Kevin Warsh.
Looks like somebody is kinda used to giving the inside skinny to the Pres outside the official ‘independent” channels.
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So… now that the Fed raised rates we’re going to stop trading with any trade partner we have a deficit with… right?..
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