The Federal Reserve Resistance

The Federal Reserve Resistance, by The Wall Street Journal (editorial).

What are we to make of former Fed monetary Vice Chair William Dudley ’s marker that the Fed should help defeat President Trump in 2020? That’s the extraordinary message from the former, and perhaps future, Fed grandee in Bloomberg. …

Mr. Dudley seems to be saying the Fed should do nothing to
assist the economy even if it heads into recession. Then he goes further and essentially says the Fed should join The Resistance.

“There’s even an argument that the election itself falls within the Fed’s purview,” Mr. Dudley writes. “After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.

Wow. Talk about stripping the veil. These columns wondered if Mr. Dudley was politically motivated while he was at the Fed, favoring bond buying to finance Barack Obama ’s deficit spending, urging the Fed to intervene in markets to boost housing, and keeping interest rates low for as long as possible. And now here Mr. Dudley is confirming that he views the Fed as an agent of the Democratic Party.

What do elections matter? The administrative state does what it wants anyway. Still, they must care, because it seems as if the US Federal Reserve is going to try and engineer a recession in 2020 so that Trump loses. Too bad for the rest of the world, eh?