Playing Politics at the Federal Reserve
In a recent op-ed piece published by Bloomberg, former New York Federal Reserve President Bill Dudley called for the Fed to tailor its policies to harm President Donald Trump’s reelection bid. While making that request, Dudley implied that such an action would be a great departure from the previous policy of the Federal Reserve. That, of course, is nonsense: The Fed has a history of tweaking the American economy for political purposes.
In his political screed, Dudley attempted to lay out his argument that “President Donald Trump’s trade war with China keeps undermining the confidence of businesses and consumers, worsening the economic outlook,” and that, with the “ultimate goal” of a “healthy economy,” the Fed should consider the option to “refuse to play along.” His recommendation? Refuse to adjust interest rates and set an economic policy trap that will spring on Trump, to make it “abundantly clear that Trump will own the consequences of his actions” — “including the risk of losing the next election.”
As if that weren’t pointed enough, Dudley sharpened it a bit by ending his piece saying:
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