President Trump is blaming the Federal Reserve for holding back the economy and stock market, despite the Fed’s decision to do two things he wanted: halt rate increases and stop shrinking its asset portfolio. According to a person who directly heard Mr. Trump’s comments at a meeting, the president recalled a recent phone conversation with Fed Chairman Jerome Powell. “I guess I’m stuck with you,” the president recalled telling Mr. Powell. Mr. Trump has blasted the Fed and Mr. Powell at three meetings in the past week alone.
From reporter Nick Timiraos:
Fed officials have been puzzled by surprisingly muted inflation pressures in recent months, which—together with worries about growth in Europe and China, and increased market volatility late last year—justified their interest-rate pause in the first quarter. One challenge for Mr. Powell that his recent predecessors didn’t face: President Trump’s acerbic criticism—by pre-emptively blaming the central bank for any wobbliness in the economy—could magnify any misstep. Even though Fed officials promise they are tuning out politics, every comment by Mr. Trump will inevitably filter the Fed’s policy decisions through a political lens in the eyes of at least some market participants.
Sen. Rand Paul (R., Ky.) still hasn’t persuaded his colleagues to audit the Federal Reserve’s conduct of monetary policy. Perhaps lawmakers could simply agree that the Fed should stop destroying documents.“Borrowed Time,” a history of Citigroup publishing today and co-authored by your humble correspondent and Vern McKinley, finds that the bank was in many ways healthier and more stable during the century when it was independent than during the roughly 100 years it has been supported by the federal government. But the government has been working hard to prevent such stories from being told... the Office of the Comptroller of the Currency’s examination reports from 1991 and 1992. Bank examiners normally put particularly juicy details about what they find in a confidential section that is not shared with the bank, and today this might represent a gold mine for financial historians. Such reports are available going back all the way to the 1860s, and the record lasts into the 1930s. But oddly these examination reports cannot be accessed for later periods due to the Federal Records Act of 1950... For decades now, the government’s standard practice has been to warehouse individual examination reports for banks like Citi for 30 years while refusing to release them, citing exemptions under the Freedom of Information Act. After 30 years, the feds then destroy the reports. Based on this schedule, at some point during this year, the federal government will destroy the Citibank examination records from 1988. A few years down the line, the records from the early 1990s downturn will also cease to exist. Counter-intuitively, it is much easier for someone researching the history of a big bank to get their hands on an examination report from 1890 than from 1990. It is also certainly easier to repeat history if the lessons of the past are erased.
.. When an institution like Citi has problems as it did during the early 1990s, a regulator would normally catalog all the bank’s weaknesses in a written agreement in which the bank promises to sin no more. Citibank was placed under just such a memorandum of understanding. But you can’t read it... It will not be immediately clear to most taxpayers why such information needs to be kept confidential for more than 25 years... How will Americans ever fix problems in a federal bureaucracy if we’re never allowed to see them?