Who is the crazy one here?
The Washington Post
No, the Fed is not “crazy,” “wild,” “loco,” or “out of control,” said Jared Bernstein. The Dow dropped 800 points in one day last week, and President Trump has those choice words for the Federal Reserve—and then some. The central bank is raising interest rates at about a quarter-point increase a quarter, and the president doesn’t like how that could slow the economy and spook the stock market. But the stock market isn’t reacting to any surprises from the Fed. On the contrary, the Fed has “telegraphed its actions well in advance”—it announced its plan to slowly raise rates from zero way back in 2015. What’s really happening is that “equity investors, like the frog in boiling water, suddenly awoke to risks.” The biggest risk comes from the government’s growing spending, and the sharp increase in borrowing to finance it. Such spending gooses the economy and the stock market, but can lead to overheating and a big bust. The markets are starting to realize that “there’s a recession out there somewhere.” It could come from the Fed overreacting and slamming on the breaks. Or from Trump’s trade war escalating. Either way, that explains why Trump is ranting about the Fed: It’s his “usual operating procedure of finding someone to blame in case what he did goes wrong.”