President Trump Should Focus On Shrinking The Fed’s Footprint
By Norbert Michel
President Trump had “a very good & cordial” meeting with Federal Reserve Chairman Jerome Powell last week. According to the President, he and Powell discussed everything, including “interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.” …As Federal Financial Analytics’ Karen Petrou noted: “The biggest danger of the Fed staying in the repo market is that it cements the expectation that the U.S. central bank will protect not just banks in a liquidity squeeze but volatile markets that are inconvenient to monetary policy. That’s moral hazard.”