Fischer: Risk from Trump attacking Fed cuts two ways
Source: marketwatch.com
Thursday, Oct 18, 2018 10:13 by InvestingPie
Former Fed Vice Chair Stanley Fischer

Former Federal Reserve Vice Chairman Stanley Fischer on Thursday joined the chorus of voices warning about central bank independence in wake of President Donald Trump’s frequent and withering criticism.

“If they lose their reputation for independence, monetary policy becomes a mess,” he said. In an CNBC interview, Fischer pointed out that the risk of Trump’s frequent chiding isn’t simply that the Fed will slow the pace of planned interest-rate hikes meant to normalize post-crisis policy. There’s also risk that the Fed may respond with higher-than-necessary rates.

Related: The history of presidential Fed-bashing suggests it has not been a fruitful strategy

‘Their profession requires them to be professional. They don’t want to be regarded as the guys who folded. And they shouldn’t be regarded as the guys who exaggerated in order to prove they weren’t folding. And I don’t think they will.’
Stanley Fischer
See Also

A New Breed of Political Ad Enters the Midterms

×
<iframe width="100%" height="100%" frameborder="0" allowfullscreen="true" webkitallowfullscreen="true" mozallowfullscreen="true" src="https://video-api.wsj.com/api-video/player/v3/iframe.html?guid=7D2B2478-34F6-4207-B567-72E26915BAEF&shareDomain=http://www.marketwatch.com&clickForSound=true&autoplay=muted&site=video.marketwatch.com/inarticle&playerid=mwmute"></iframe>

Fischer generally seemed supportive of the Fed’s stance.

“It looks very good from outside, you seem to be doing the right thing,” Fischer said when asked if he had a message for Fed Chairman Jerome Powell, as he said he doesn’t call his former colleagues. “I can’t really tell, but that’s my current guess.”

Fischer sounded concerned about growing trade tension, with China in particular, though he pointed out the U.S. has compromised on other trade disputes such as renegotiating NAFTA.

“So the big question is, are they saving up the non-compromising actions for China, or is that going to be like the ones we’ve had so far?”

The current 10% tariff rate on roughly $200 billion of Chinese goods is slated to escalate to 25% next year in the absence of an agreement. The Trump administration also has said it’s looking to impose tariffs of another $267 billion of Chinese goods.

Steve Goldstein is MarketWatch's Washington bureau chief. Follow him on Twitter @MKTWgoldstein.

We Want to Hear from You

Join the conversation

<button id="join-conversation" type="button">Comment</button>
[removed] var SA = SA || []; SA.push({ container: "#sa_calc_1606410", version: 1.1, data: { key: "npqzoaaw8ttdneqrelpmx2gdnehdyiog" } }); var smscript = document.createElement('script'); smscript.type = 'text/javascript'; smscript.async = true; smscript.src = 'https://smartasset.com/snippet.js'; var s = document.getElementsByTagName('script')[0]; s[removed].insertBefore(smscript, s); [removed]
26 0
Comments
Search InvestingPie
Search
Share on Twitter Share on Facebook Share on Google Plus
New comments
Very informative
05-03 04:23 by Liam
The same day Trump spoke with Reynolds
01-29 04:43 by Yavor737347
More from InvestingPie
Advertise with us

Find out our advertising solutions. Our Team will be in touch with you with a program that suits your needs. Please contact us.