Trump Calls Fed Policy a Stock Market "Killer"
WASHINGTON, DC – April 15, 2019
If not for Fed policy, the stock market could grow by 10,000 points, the President Trump is certain. He called the “quantitative tightening” program (or officially - the normalization of balance), in which the regulator cleared its inflated balance in 2017, a “killer.”
“If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%...with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite!” he tweeted.
If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%...with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite!— Donald J. Trump (@realDonaldTrump) April 14, 2019
According to information as of April 12, the Dow Jones index was at about 26,388 points.
The quantitative tightening measures mentioned by the President began in October 2017. This name was given to the balance normalization program, under which the Fed began to sell assets that it bought during quantitative easing (QE) during the anti-crisis program to clear the inflated regulator balance. The Fed thus reduced the dollar mass.
The Fed reported its plans for reduction for the first time in the summer of 2017. Initially, the reduction amounted to $10 billion per month, then it was expanded to $50 billion. At the same time, it is known that during the third wave of quantitative easing, the Fed bought treasury bonds and mortgage bonds worth $85 billion. In general, the Fed’s assets due to QE programs grew fourfold from autumn 2012 to autumn 2017 to $4.5 trillion. At that time, the Fed was the holder of 16% of US state bonds.
CNN has drawn attention to the fact that Trump's statements about the Fed’s policy were made against the background of outrage in the Senate about the President’s proposals to take vacant seats on the Board of Governors of the Fed for Herman Cain and economic commentator Stephen Moore.
Last week, four Republicans said they would not vote for Cain, who had previously served on the Kansas City Federal Reserve Regional Council, because of allegations of sexual harassment. Cain himself denied this.
Lawmakers also criticized Stephen Moore, who used to work for the Wall Street Journal and is now a CNN analyst, for the fact that he changed his position about low interest rates.
However, White House advisers, CNN remarks, have made it clear: Trump wants to nominate people who share his economic views to leadership positions at the Fed. It seems Trump has decided that the time has come for a decisive shot to seize the levers of governing the country and become the real and not the nominal ruler of the state.