The Trump administration just fired a warning shot at Jerome Powell
As I noted last week, the President has implicitly told the Fed to start easing now with a tweet concerning inflation.
Ignore the media’s portrayal of the President as being a dunce… or that he doesn’t understand inflation. This was a clear signal to the Fed… “EASE NOW.”
Apparently the Trump administration has decided that an implicit signal wasn’t enough… so yesterday they made their intentions EXPLICIT.
Yesterday the following headline hit the newswires around mid-day…
White House explored legality of demoting Powell from chairman.
As if that wasn’t clear enough, the President himself, when asked about the possibility of demoting Jerome Powell, stated… “let’s see what he does.”
The message here is clear… “EASE NOW OR YOU’RE FIRED.”
Whether Powell actually eases or not has become an afterthought… because the reality is that if he does not, the President will replace him with someone who will.
Put simply, the Fed is about to ease in a big way… whether it’s today… or a few months from now.
All of this is going to unleash a tsunami of inflation.
The Fed was already talking about unleashing non-stop Quantitative Easing, cutting interest rates to negative and more BEFORE the President got involved.
Can you imagine what the Fed will do now that President himself is pushing for higher inflation?
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Chief Market Strategist
Phoenix Capital Research