Saturday, September 22, 2018

Commentary: Has the Federal Reserve Joined the Deep State in an Attack Against Trump?

This is simply stunning.  Federal Reserve Bank Chairman Jay Powell has met or called members of Congress 48 times in his first six months in office, according to a report from Bloomberg News. By contrast, his predecessor, Janet Yellen, who is a shrewd networker, had just 17 contacts with lawmakers during her first six months as Fed chair.

Indeed, the same day that the president criticized Powell in a CNBC interview, Powell was stopping by the offices of Democrats Senator Ron Wyden of Oregon, and Representative Michael Capuano of Massachusetts.

Days earlier, Powell had told radio show "Marketplace" that he was going to "wear the carpets of Capitol Hill" by walking the halls and meeting with members.

It's clear Powell is looking for support beyond the White House. You don't seek this type of support so aggressively unless you are getting set to take the economy in a direction that Trump does not want it to go.

In other words, did Trump make another serious blunder in the nomination of Powell like so many of his other goofy personnel choices? Is there some kind of secret "I am Brutus" handshake that Trump is missing when meeting these people?

It appears so.

Powell is Mr. Establishment.

He made a fortune while working at the D.C.-based private equity powerhouse Carlyle Group. Carlyle at one time had George H.W. Bush and Tony Blair as advisers.

Powell also has deep connections to Washington’s Republican establishment. He served in the U.S. Department of the Treasury under Bush the first, in the early 1990s and is a member of the city’s elite Metropolitan Club, located just blocks from the White House.

Bottom line: Powell's allegiances are to the Deep State, not Trump. If the Deep State reaches the conclusion that part of the way to take Trump down is to weaken the economy, it is difficult to believe that Powell will not be a good soldier and take it down. And he may be getting close.

I have been generally bullish about the stock market and economy up until recently, but lately, I have turned more negative in the EPJ Daily Alert. I am not sending out a panic alert signal yet--but I am getting closer.

Powell has to know he is playing with fire with his steady rate hikes, one hike too many and the gig will be up for the stock market and economy. The Deep State might be happy if this happens in the short-term to make Trump look bad. If that occurs, Powell will need the Congressional support he is developing as Trump at such time will be launching a massive attack against Powell.


Robert Wenzel is Editor & Publisher of
EconomicPolicyJournal.com and Target Liberty. 

More about Wenzel here. 





Editor's note: This article was originally run at Economic Policy Journal and has been republished with permission. 

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