The former president of the Federal Reserve Bank of New York, William Dudley recently spiked debate when he asked the Fed to revisit their 2020 presidential election policies. From his public service, Dudley observed that Fed policy could affect politics, in some cases with extreme implications. His observations weren’t on target even though he made such observations.
William’s logic is on point because if the Fed agrees to slash down the interest rates in response trade action policies by Donald Trump, it could push the U.S president to settle on more of the same because Trump has a belief that both China and the U.S are locked in a trade war that will last for long. Trump, though agrees to the fact that the stock market affects his tariff negatively while also affecting growth that could, in turn, affect his re-election.
If the Fed decides to loosen the policy, then President Donald Trump will have the freedom to escalate trade attacks on China. Dudley says, “abundantly clear that Trump will own the consequences of his actions.”
The question, though remains, what does making it abundantly clear mean? Because the Federal officials can confirm that the president’s action is driving them …