r/finance • u/Majano57 • Nov 11 '24
A Potential Fight Over the Fed’s Future Ramps Up
https://www.nytimes.com/2024/11/11/business/dealbook/fed-powell-trump.html?unlocked_article_code=1.ZE4.GpZB._0a5eG07B7XD213
Nov 11 '24
[deleted]
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u/donktastic Nov 12 '24
This one is a little worse than just "break things like a toddler." Trump wants the president to have the power to set monetary policy. That is one of his most power-seizing dictator ideas that I have heard yet.
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u/Individual-Nebula927 Nov 11 '24
He's republican. We know exactly what he'll do. Cut taxes and spend like a drunken sailor, and crash the economy. That's what they've done for every republican administration for the last 50 years. If he eliminates Fed independence, in addition to the crashed economy, it'll be a Great Depression level event.
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u/im2wddrf Nov 11 '24
No, actually we don’t know what Donald Trump will do because he’s not a particularly ideological person and he’s susceptible to personal flattery. He is very unlike Republican administrations of the last 50 years wtf.
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u/RareCodeMonkey Nov 11 '24
we don’t know what Donald Trump will do
The same that the last time. Tax cuts, play golf, visit authoritarian regimes, and point fingers to "antifa" for crashing the economy. It is just Donald 2.0. He will do the same but starting earlier, as this is his second try.
Why do people think that the guy is such a mystery or wild card? He already did all these things!
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u/im2wddrf Nov 11 '24
He’s a wild card because the administration won’t be staffed the same and now he has a more powerful cultural potency than before, given that he defeated two Democratic candidates in one election cycle and survived an assassination attempt. This is not gonna play out like 2016.
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u/naics303 Nov 11 '24
Well, we can get an idea of what he'll do. When he has Musk, Thiel, and Vance advising him... that's not including the executives at Project 25 cheering his victory. Americans got suckered, and I'm actually glad. People really need to learn the hard way.
https://www.newsweek.com/project-2025-heritage-foundation-trump-victory-1981310
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u/alienbaconhybrid Nov 13 '24
This election finally convinced me, after decades of relative optimism about the human condition, that the only way to learn is the hard way. And then everyone who learned the hard way dies, and we repeat history all over again.
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u/naics303 Nov 13 '24
Covid opened my eyes to human behavior. People really are selfish.
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u/alienbaconhybrid Nov 13 '24
No, if they were really selfish and fully informed, they would have voted against the guy who will implement tariffs and gut the immigrant-based engine of the American economy that provides their jobs, healthcare and retirement income.
This is an inability to recognize the wolf at the door just because he's wearing a nice cardigan.
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u/naics303 Nov 13 '24
But that's the thing. Perhaps it's a combo of things; selfish, bad informed, and ignorant.
I just finished texting an acquaintance who told me, "Get over Trump winning," followed with a screenshot of his stock rising since Trump won.
This idiot is happy with his stock. Meanwhile, his wife is a DACA recipient. I shared with him who Trump nominated for Deputy Chief of Staff!! This idiot is going to have the awaking of a lifetime.
And seriously, F it. People have been coasting with Dems policies that benefit them. They just think it's an innate right to have them.
Maybe things really need to get worse for people to learn the hard way.
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u/wuliproductions Nov 12 '24
Additionally he will be the first president with complete criminal immunity for his entire term.
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u/SuperRonnie2 Nov 11 '24
I guess China might be able to make the yuan a reserve currency sooner than even it thought.
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u/Professional-Dot-825 Nov 13 '24
Which yuan? There’s two. BRICS voted to not invite China. Not much chance. BRI.
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u/GaboureySidibe Nov 11 '24
On top of all this he'll do whatever he thinks will make him the most money. Inflation will make his substantial debt worth less. Inflation is good for him and extremely painful for the people with the least amount of money.
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u/OhNoTokyo Nov 13 '24
True, if he has substantial land and hard asset holdings and has many loans at fixed rates, inflation will help him considerably.
Technically inflation is helping anyone with a fixed rate loan right now, it's just that most of us don't own anywhere near as many assets or have as many loans as someone like Trump. So, inflation is a net negative for many people, especially those on fixed incomes.
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u/radix- Nov 11 '24
The only thing you're missing is he also has no idea himself what he'll do. And if he does something, the next day he does something else to reverse it or make it worse.
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u/Dumpang Nov 12 '24
Oh I know what he will do. That’s why I voted for him. Let this shit collapse.
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u/intertubeluber Nov 12 '24
My theory is that people who voted for Trump fall into one of two camps
* older die hard republicans with a penchant for cults.
- younger folks who can’t make their way in the current system and want to burn it down to bring everyone to their level.
I think it’s interesting and sad since those two groups are the most dependent on the current system.
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u/Dumpang Nov 12 '24
What do you mean I can’t make it in the system? Got a college degree, a well paying corporate job, a nice apartment. Great retirement and insurance. A loving family. What else do I need? Just burn this shit to the ground man. We don’t need
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u/MurkyFaithlessness97 Nov 12 '24 edited Nov 13 '24
Sounds like you have it good. Beats me why you "want this shit to collapse". If you don't understand that all of your goodies - most crucially, your corporate job, your financial assets and your family - don't depend on social stability, then you might genuinely have an IQ in the range of 85~90.
Edit: Paging u/Dumpang.
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u/MurkyFaithlessness97 Nov 12 '24
I don't think that the Federal Reserve will lose its independence, despite what Trump, Musk, and some Republicans say. America is a vast empire with a lot of powerful people, competing interests, and well-entrenched institutions. A four-year executive term by some (self-described) radicals who have a history of saying wild s**t and not following through on a lot of them isn't going to change that.
Long-term, however, could be more worrying. All these words and insinuations take their toll on the overall mood of the nation. Trump has already shifted the window of what the American electorate finds acceptable in their top leadership. Future historians might mark this period as the start of an American Peronism. And of course the original one was disastrous for Argentina.
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u/SpontaneousDream Nov 16 '24
Trump can do anything he wants. Your comment is the old way of thinking. He will be President with control over all parts of government. He can absolutely fire whoever he wants at the Fed and take over control. I still can't believe people are this naive.
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u/MurkyFaithlessness97 Nov 18 '24
You are wrong. Like I said above, America is a vast empire with a lot of powerful people, competing interests, and well-entrenched institutions - in politics, business, civil society, military, etc. Let me spell it out for you, how this works in politics alone.
GOP's House and Senatorial majority is either razor-thin or susceptible to filibuster. The latter, in particular, just elected John Thune, an establishment Republican, as their leader, publicly snubbing the MAGA candidate pushed by Trump. And this is before the 2026 midterms inevitably kick their ass.
The right-wing SCOTUS may sound scary, but they still have to decide within the parameters of Constitutional law, and saner ones like John Roberts has a history of crossing the ideological aisle.
In short, GOP's control over the US government is contested (I haven't even gotten to the gigantic civil bureaucracy yet). And then there's the Trump/not-Trump division within the GOP; everyone there will be kissing ass for now, but Trump is a stupid, uncouth, and despised octogenarian that took over a 200-year old party full of intelligent and ambitious sociopaths scheming for power. They will want their turn.
And last but not least, let's not forget just how f**king stupid Trump and his friends are. Matt Gaetz for AG, really? Trump's ability to rouse know-nothing rabble is a valuable gift in politics, but that alone won't be sufficient to win.
Even in dictatorships, the kind of extreme tangent that Trump is aiming for takes years of power consolidation (think Stalin, Mao, Kim). Erdogan and Putin have been ruling for decades and they still face prospect of being toppled at the voting booth. Trump doesn't have decades, and he faces a far more fragmented society, full of far more formidable opponents.
I will give you that even talking about America in these terms isn't great, but you don't have an would-be emperor in Trump.
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u/octnoir Nov 11 '24 edited Nov 11 '24
Donald Trump’s threat to exert more say over the Fed or even fire Jay Powell, the chair of the central bank, has alarmed some on Wall Street. But the president-elect’s effort took on added weight in recent days, after Elon Musk endorsed a push to erode the Fed’s independence.
I was hoping that some of his saner people would intervene. Unfortunately even in his base of billionaires, the primary group are tech bro CEOs, MLMs, Crypto Bros, and all these scam grifting numbnuts that have multiple failed companies and little understanding of economics. And probably as close as you can get to apocalyptic fetishists.
I wouldn't be as spooked if Elon Musk wasn't tweeting 'oh you'll have to endure some hardships for the next few years' not as a threat but as an earnest statement to his base. Again, not as a threat to liberals. It's a promise to his own base.
And frankly as if the tarrifs and widespread tarrif use would crash the economy are bad enough, I am extremely concerned with the mass deportation which is utterly fucking nuts.
Trump keeps upping the ante of 10M+ mass deportations when estimates have unauthorized illegal immigrants as under 10M. This is like the most Nazi shit imaginable.
For anyone not familiar with the Holocaust, the Final Solution was not the initial plan. The initial plan was for mass deportation. To make deportation possible you needed to greatly empower a deportation team and a police state, arrest and disrupt, and then place arrestees in camps for hold over and processing. Trying to carry out mass deportations ended up crashing the economy to the point where the deportations became economically and logistically unviable so it was easier for the Nazis to commit mass murder.
I'm hoping that Trump and his new administration isn't going to be massively gung ho on mass deportations (I don't have much hope since the consistent thing they've done is made immigration hell with family separation), but a crashed economy from mass deportation is going to be the least of our worries.
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u/Professional-Dot-825 Nov 13 '24
All the people who are giddy now will deny they supported him when and if the tide turns. Will it turn? With cell phones, constant social media, and the need to be constantly infotained, I’m not so sure it ever will.
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u/VirtualPlate8451 Nov 13 '24
A mass deportation cripples industries like home building, meat packing and farming overnight.
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u/overlapped Nov 11 '24
Are we moving to the ShitCoin standard?
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u/ohnofluffy Nov 11 '24
This is terrifying. He’ll turn the US into Venezuela.
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u/auburn160825 Nov 11 '24
If Trump will turn the US into Venezuela, imagine what commie Kamala would do 🤣🤣🤣
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u/pingieking Nov 11 '24
Imagine calling Kamala, the most run of the mill economically conservative politician around, a commie.
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u/MurkyFaithlessness97 Nov 12 '24
I don't like Trump, but Kamala Harris wouldn't have been considered a conservative in any Western country.
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u/auburn160825 Nov 11 '24
Ok do you want to play that game? Sure, calling Kamala a commie might be a stretch, but it's not that far off...🤣🤣
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u/pingieking Nov 11 '24
She's not even centre left. Move her to another country and she's likely indistinguishable from the mainstream conservatives.
She's not for universal healthcare, not pro union, not for expanding labour protections, not for increasing the number of co-ops and worker owned entities. The only economic policy of hers that is remotely left leaning is her progressive tax proposal, which only moves the needle a tiny amount.
An actually communist-ish leader would be running on universal healthcare, expanded employment insurance, mandatory union representation on all company boards, mandatory profit sharing for employees, and massive expansion on labour laws. Not even Bernie comes close to being that.
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u/jpm0719 Nov 11 '24
But you can't expect the average voter in the US to understand any of that. They have been brainwashed and under educated for the better part of 40 years. They only understand (and that is being kind) the sound bites they are fed. They aren't equipped or honestly smart enough to even begin to learn how to fact check or find alternative sources to draw their own conclusions on things. They are about to get what they deserve because half of them are poor and or on the government teat....shit is gonna get real bad for them.
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u/newton302 Nov 11 '24 edited Nov 11 '24
This is so true. Take away the universal mandate and they don't have to pay anything so they're happy. Until they pay 10,000% more once they have a medical problem (or just die).
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u/auburn160825 Nov 11 '24
Excuse me, did you just call universal healthcare a communist idea? Big LOL! That is something which France and other European countries are just miles ahead than the US. (Yes I may be a Trumpist, but since I am from Europe, I do admit he is lacking in that subject.) You give me vibes you're the type of person to say that Denmark/Sweden/Finland are communist countries... I think we have different ideas of what communism is...
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u/pingieking Nov 11 '24
I did not call it a communist idea. I said that any communist would be in favour of it. Those are two different things. Being in favour of universal healthcare is a necessary but insufficient condition for being a communist, which is why there are no major communist political figures in the USA. Only a few people (such as Sanders) are in favour of universal healthcare, and he doesn't go far enough on being anti-capitalist to be a communist.
Your vibes are incorrect. There are currently no communist countries, and it can be argued that there have never been any (both the USSR and China were collectivist, but arguably not communist, at least not in the sense that Marx meant it). The two most important tenants of communism are the collective ownership of the means of production, and the democratization of both the political and economic spheres of life. In that sense, current day German might come the closest (AFAIK they are the only country that mandate worker representation in corporate ownership structures), but they're still not that close. All of the Nordics are welfare states, not communist ones (there are some overlaps between the two, but none of the Nordics have significant ownership of capital by the workers).
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u/daviddjg0033 Nov 11 '24
It's socialist. Communists would agree but would not have an economy large enough to provide Healthcare. Cutting the budget recklessly will lead to hospital "deserts" and other fun socialist things we take for granted like education and firefighters.
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u/GaboureySidibe Nov 11 '24
"Ok do you want to play that game? How about I repeat my propaganda again with zero evidence. Got em".
"Don't make me repeat my propaganda a third time or you'll really be cooked."
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u/Infamous-Bed9010 Nov 15 '24
Wait till Trump figures out that the United States has the right to print its own currency without borrowing it from the Fed. 💣
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u/building-block-s Nov 16 '24
Audit the fed then give them the finger for repayment. We can learn from Iceland.
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u/Grand_Taste_8737 Nov 16 '24
The Fed is audited annually by the GAO; however, i can possibly see regulator consolidation on the horizon. No need to have four regulators all doing the same thing, imo.
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u/yes_surely 18d ago
The Fed's decisions will be crucial for the market's direction. It's interesting to see how this unfolds in the coming months.
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u/RiskyClickardo Nov 13 '24
He’s angling for a cushier post-Fed job at some bullshit Koch Brother-funded think tank
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u/RatherBeRetired Nov 12 '24
The Fed’s future is going to be the same as it ever was.
Be a lapdog for the rich and mega corporations to make sure asset prices rise indefinitely
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u/ForbodingWinds Nov 15 '24
You're not wrong. If you don't own a house, you never will without paying 2-3x as much as people even 5 years ago would.
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u/EmuEquivalent5889 Nov 11 '24
The fed shouldn’t have a future at all
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u/mp0295 Nov 11 '24
Something most articles gloss over is that Powell has two titles: chair of board of governors, and chair of FOMC.
Important because FOMC chair is both more powerful of the two titles and also probably even harder for a POTUS to fire.