# The Fed will yield to Trump **URL:** \ **Category:** Great Debates\ **Created:** [October 11, 2018, 10:10pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825 "2018-10-11T22:10:25Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![CarnalK](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnalk/32/486_2.png) [@CarnalK](https://boards.straightdope.com/u/CarnalK)\ **Post date:** [October 12, 2018, 1:03pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/21 "2018-10-12T13:03:07Z")
OP, can you flesh out what this “yielding” will consist of? ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 12, 2018, 1:14pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/22 "2018-10-12T13:14:14Z")
> [@asahi](#): > > It might seem like lunacy, but the federal reserve could actually be abolished. Donald Trump cannot do that, and the loyalty of his GOP minions stops at the loss of their portfolios. I know it seems like the guy is invincible, but his ability to get actual legislation and policy enacted has been pretty chancy. You’ll note the lack of a wall. ---
**Author:** ![naita](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/naita/32/5862_2.png) [@naita](https://boards.straightdope.com/u/naita)\ **Post date:** [October 12, 2018, 1:31pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/23 "2018-10-12T13:31:34Z")
> [@WillFarnaby](#): > > Do you really think he will sit back as the stock market crashes and his favorite economic indicator tanks without leveling broadsides at the Fed? When his broadsides is limited to tweets and rants at rallies, it is equivalent to yielding. Like with his wall and the federal budgets. Once upon a time the wall was going up on day one, paid by Mexico, and he’d never sign a budget he didn’t like again. Now it’s all “We’ll see. I don’t want to rock the boat for these guys before the midterms. We’ll see.” ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 12, 2018, 1:37pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/24 "2018-10-12T13:37:12Z")
I’m assuming it means that within the next year, the Fed will cut rates in the absence of an economic downturn. (Because if growth takes a bad turn, they would be expected to drop rates anyway.) Is this a fair summary? And, would you like to place a wager on this? Maybe $500? ---
**Author:** ![asahi](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/asahi/32/8693_2.png) [@asahi](https://boards.straightdope.com/u/asahi)\ **Post date:** [October 12, 2018, 1:51pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/25 "2018-10-12T13:51:46Z")
> [@RickJay](#): > > Donald Trump cannot do that, and the loyalty of his GOP minions stops at the loss of their portfolios. > > I know it seems like the guy is invincible, but his ability to get actual legislation and policy enacted has been pretty chancy. You’ll note the lack of a wall. I’m not saying he’s invincible, but he’s a populist at a time of great political uncertainty, and what has for long been unthinkable can no longer be considered so. For the record, I don’t think abolishing the fed would be considered as a serious move, but political manipulation of the fed is easier than people think. He doesn’t actually need to get a lot in the way of legislation; the presidency has been delegated extraordinary powers over the years. He’s using them much more deftly than people give him credit for. Again, how did he get a party that has been consistently pro international trade since the end of WWII to do an about face on global trade? Sure, there are many republicans privately grumbling about it, but that’s all they’re doing: grumbling. They’re not challenging him. ---
**Author:** ![KidCharlemagne](https://avatars.discourse-cdn.com/v4/letter/k/ed8c4c/32.png) [@KidCharlemagne](https://boards.straightdope.com/u/KidCharlemagne)\ **Post date:** [October 12, 2018, 2:08pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/26 "2018-10-12T14:08:08Z")
> [@senoy](#): > > First off, Trump is smart. I know we don’t like to think so and for a long time I didn’t believe it myself, but it’s true. Amoral and narcissistic, but smart. He recognizes that humanity is base and addicted to ‘bread and circuses’ and he exploits that like a freaking surgeon. He recognizes that rules are just things that we say and that they can be bent and twisted or even broken to get what he wants. That has actually led to quite a few successes from his point of view. > > Because he is smart, I think that he fully recognizes what Fed non-independence would do. He doesn’t want his assets completely devalued and the dollar not the world currency. He also recognizes that the bull market wasn’t going to last forever, so he is looking for a scapegoat. I fully expect him to rail against the Fed and talk about how horrible it is and how it’s destroying the wonderful economy that he built. I also fully expect him to do nothing about it of substance and complain that ‘the swamp’ has his hands tied. The Feds independence is too valuable to him for him to screw with it, so he might complain, but it’s virtue signalling to his base rather than notice of intent. Trump’s only intelligence is manipulating the American id. He has no vision whatsoever. This is a man who literally believes (and this is when I realized he really was not intelligent) that greenhouse gases from aerosols couldn’t possibly get to the atmosphere if you kept the door to the room closed while you were spraying. He would have no vision to see the implications of a non-independent fed. He would only react if he thought his base would blame him for the economic implications rather than the fed. ---
**Author:** ![Pleonast](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pleonast/32/1183_2.png) [@Pleonast](https://boards.straightdope.com/u/Pleonast)\ **Post date:** [October 12, 2018, 2:18pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/27 "2018-10-12T14:18:10Z")
> [@asahi](#): > > He’s not smart in terms of actual governing, but he’s damn smart when it comes to using the levers of power. I don’t think he is. He’s a monkey pressing all the buttons, flicking all the switches, and pulling all the levers. He occasionally makes something happen, but he doesn’t understand cause and effect. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 12, 2018, 2:31pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/28 "2018-10-12T14:31:13Z")
> [@asahi](#): > > Again, how did he get a party that has been consistently pro international trade since the end of WWII to do an about face on global trade? The Republicans haven’t really been asked to do a lot in this regard, though. Everything that has actually happened amounts to executive orders. Congress will pass NAFTA2 because it’s pretty much NAFTA. Getting rid of the Fed would be the biggest legislative alteration to the United States since basically ever. It’s literally a bigger deal than the Civil Rights Act. I agree that Trump is, in a limited way, dangerously cunning, but I think you’re misattributing the direction of his cunning. Big important things like getting rid of the Fed, a thing he honestly does not fully comprehend, aren’t his thing. He’ll happily rail against it to score points with Trumpists the same way he rails against Barack Obama but does not actually plan to have his arrested, or blather about countries he really doesn’t want to go to war with. Trump is, for all his power, remarkably petty; he is in fact so petty that it costs him money. He hads put a lot of effort into scamming the taxpayer by forcing government employees to stay at his properties, for instance, though that’s probably not in the top ten profitable ways he could scam the taxpayer. Where Trump is truly dangerous is in subverting democratic norms. In this regard, though, he’s just another Republican; they’re all like that. Far more damage is being done at the state level by Republicans who are now pretty much openly taking the vote away from racialized Americans. Trump contributes to that, but in a sort of stochastic, general way. Actually getting large, specific things done\*\* is something he usually fails at. \*\* He has failed to get the wall built despite the fact that would probably be the most influential win he could possibly get. He failed to get the Norks to denuke. He failed to get Congress to kill ACA in a big sweep. He and his Trumpists have had success largely where they can peck away at things by driving the bar down to the ground, but that’s not really an option with the Fed, certainly not in the timeframe in which he’ll be President. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [October 12, 2018, 3:11pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/29 "2018-10-12T15:11:35Z")
> [@bobot](#): > > What is this term intended to imply? An education with no real world experience? I’m guessing here, help me out. Most of the Fed staff are academic economists I believe. They are not political figures or business leaders. They build economic models. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [October 12, 2018, 3:24pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/30 "2018-10-12T15:24:04Z")
> [@septimus](#): > > We think (or hope) that adults in the White House are keeping the short orange finger away from the nuclear button; the adults are probably also trying to keep that finger away from the monetary button. Careful FedRes policy has maintained American prosperity for 40 years (even the huge credit crisis of 2008 caused only a relatively brief setback) and I think almost everyone appreciates that and wants it to continue. > > This smart pro-business FedRes policy has been one of two pillars of American monetary power, and thus the stability of the world economy. The other pillar is the dollar’s inherent strength as a reserve currency, and the huge global reach of American economic, cultural and military power. > > **Trump seeks to attack _both_ these pillars.** He may not be able to usurp FedRes independence, but he can — and has — attack(ed) the dollar without FedRes cooperation. His tariff wars and obnoxious talk are reducing respect for America and the American dollar. The GOP decision to run up treasury debt dramatically creates pressure on the dollar to inflate or be devalued. (I asked one of SDMB’s top GOP supporters to name any economist who supported the tax cut — _HD was unable to come up with a single name._) > > Some years ago, when McConnell was trying to force Obama’s government to fail, there was talk of Obama minting a trillion-dollar platinum coin to bypass Congress. This idea was booed down by D and R alike. Trump and the present GOP may well decide to bypass the Fed with some silly mechanism like a trillion-dollar coin. 38% of the country would cheer. Certainly the Congress which put an hysterical hyper-partisan drunkard on the Supreme Court would have no objection. Perhaps Krugman would be among the 38%. Oh never mind Trump is doing it. > [@CarnalK](#): > > OP, can you flesh out what this “yielding” will consist of? They will slow down rate increases in the face of a stock market downturn. > [@Ravenman](#): > > I’m assuming it means that within the next year, the Fed will cut rates in the absence of an economic downturn. (Because if growth takes a bad turn, they would be expected to drop rates anyway.) > > Is this a fair summary? And, would you like to place a wager on this? Maybe $500? They will delay rate increases in the face of a stock market downturn. Of course this could be the Greenspan Put at work, so maybe Trump’s effect will be hard to gauge. ---
**Author:** ![John\_Bredin](https://avatars.discourse-cdn.com/v4/letter/j/96bed5/32.png) [@John\_Bredin](https://boards.straightdope.com/u/John_Bredin)\ **Post date:** [October 12, 2018, 3:26pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/31 "2018-10-12T15:26:43Z")
I disagree with this part. > [@senoy](#): > > First off, Trump is smart. I know we don’t like to think so and for a long time I didn’t believe it myself, but it’s true. Amoral and narcissistic, but smart. He recognizes that humanity is base and addicted to ‘bread and circuses’ and he exploits that like a freaking surgeon. He recognizes that rules are just things that we say and that they can be bent and twisted or even broken to get what he wants. That has actually led to quite a few successes from his point of view. > > Because he is smart, I think that he fully recognizes what Fed non-independence would do. However, I agree with this part. > [@](#): > > He doesn’t want his assets completely devalued and the dollar not the world currency. He also recognizes that the bull market wasn’t going to last forever, so he is looking for a scapegoat. I fully expect him to rail against the Fed and talk about how horrible it is and how it’s destroying the wonderful economy that he built. I also fully expect him to do nothing about it of substance and complain that ‘the swamp’ has his hands tied. The Feds independence is too valuable to him for him to screw with it, so he might complain, but it’s virtue signalling to his base rather than notice of intent. Yep, see T-Rump’s ineffectual wailing and tweeting about the unbuilt wall, the still-ongoing “witch hunt” by Mueller, and his lack of confidence in still-Att’y-Gen’l Sessions. :dubious: As you say, pure virtue signaling to his base. ---
**Author:** ![senoy](https://avatars.discourse-cdn.com/v4/letter/s/dbc845/32.png) [@senoy](https://boards.straightdope.com/u/senoy)\ **Post date:** [October 12, 2018, 3:42pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/32 "2018-10-12T15:42:04Z")
For those of you who think Trump is dumb, if you were a narcissist who only craves the spotlight and power, what exactly would you do differently than he has done? You can say, “Well, he didn’t get the wall built.” But I’m not so sure he wants one. It’s a rhetorical device that fires up his base. Witness the fact that he said Spain should build a wall across the Sahara. Obviously Trump knows such a thing is impossible for about a million reasons, but it plays well with his base. His ideology is simply the veneration of himself and he’s really, really good at it. Again, I was doing the same thing with him. I was saying “He’s an idiot plundering through the China shop.” but I was judging his motivations as I would judge a typical politicians motivations, i.e. he has some ideological agenda he wishes implemented and wants to achieve that. That’s like judging the intelligence of a dolphin by how well it climbs trees. He has no ideology. He simply wants to be applauded and in the center of everyone’s mind. When you watch some sort of thing in the world steal attention from him, you’ll immediately see him escalate with another ‘stupid’ thing. We look at him like we would any other politician and ask why he would take focus away from some sort of pending legislation, but that’s assuming he cares about it at all. He doesn’t care about repealing Obamacare. Why would he? He’s rich and insulated from it and you’re not telling me that he cares about its impact on his constituents. He opposes it because it’s the biggest thing to oppose at the moment and opposing it puts eyes on him. When it’s not the biggest thing, he switches to whatever is the biggest thing, that’s why he has wasted so much time and energy on freaking kneeling in the NFL. There’s no ideological reason for it, but it does mean that he’s in the center of every spotlight. He’s very smart and very good at what getting what he wants. He just doesn’t want what the rest of us do. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 12, 2018, 3:43pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/33 "2018-10-12T15:43:55Z")
> [@WillFarnaby](#): > > They will delay rate increases in the face of a stock market downturn. Of course this could be the Greenspan Put at work, so maybe Trump’s effect will be hard to gauge. I would say that prediction isn’t all that falsifiable, because it is to vague. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 12, 2018, 3:48pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/34 "2018-10-12T15:48:13Z")
> [@senoy](#): > > For those of you who think Trump is dumb, if you were a narcissist who only craves the spotlight and power, what exactly would you do differently than he has done? I wouldn’t have tried to end a popular health care program for some vague but terrible plan. I wouldn’t have cut taxes on millionaires. I wouldn’t have said things to split our NATO alliance. I wouldn’t have said Kim Jong Un is a good guy. I wouldn’t have invited Kanye to the Oval Office. Is that enough for you? > [@](#): > > Witness the fact that he said Spain should build a wall across the Sahara. Obviously Trump knows such a thing is impossible for about a million reasons, but it plays well with his base. It is not obvious that he knows that is impossible. It is not obvious if he knows where the Sahara is. > [@](#): > > He has no ideology. He simply wants to be applauded and in the center of everyone’s mind. This is true. > [@](#): > > He’s very smart and very good at what getting what he wants. He isn’t smart, he just has one skill: to rile people up and divide them. Just because someone has a skill does not mean they are smart. Clearly, he isn’t very good as business, and he is worse at governing, as evidenced by the fact that he’s managed to make himself a consistently unpopular president. He isn’t even very good at getting what he wants, either. ---
**Author:** ![senoy](https://avatars.discourse-cdn.com/v4/letter/s/dbc845/32.png) [@senoy](https://boards.straightdope.com/u/senoy)\ **Post date:** [October 12, 2018, 4:05pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/35 "2018-10-12T16:05:45Z")
> [@Ravenman](#): > > I wouldn’t have tried to end a popular health care program for some vague but terrible plan. I wouldn’t have cut taxes on millionaires. I wouldn’t have said things to split our NATO alliance. I wouldn’t have said Kim Jong Un is a good guy. I wouldn’t have invited Kanye to the Oval Office. Is that enough for you? So, keeping in mind that your goal is to be the center of attention. Your goal is for the ‘ratings’ to be high and everyone to be paying attention to you, exactly what would you have done differently? ---
**Author:** ![CarnalK](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnalk/32/486_2.png) [@CarnalK](https://boards.straightdope.com/u/CarnalK)\ **Post date:** [October 12, 2018, 4:20pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/36 "2018-10-12T16:20:32Z")
> [@WillFarnaby](#): > > They will slow down rate increases in the face of a stock market downturn. How many rate increases would you expect if they weren’t yielding to Trump? From [what I’ve read](https://www.bbc.com/news/business-45657009): > [@](#): > > The forecasts show Fed officials expect about three rate rises in 2019 and one more in 2020, which would lift the bank’s important federal funds rate to about 3.4% that year. So what exactly is going to happen instead of that? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 12, 2018, 4:50pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/37 "2018-10-12T16:50:37Z")
> [@senoy](#): > > So, keeping in mind that your goal is to be the center of attention. Your goal is for the ‘ratings’ to be high and everyone to be paying attention to you, exactly what would you have done differently? That is not my goal. That is probably Trump’s goal, but that doesn’t mean I have to accept it as a valid one. But even if you take that as a starting point, Michael Avenotti probably also wants to be the center of attention, and if he were President, he wouldn’t be best buds with Kim Jong Un and putting 2 year olds in cages. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [October 12, 2018, 4:58pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/38 "2018-10-12T16:58:36Z")
> [@Ravenman](#): > > I would say that prediction isn’t all that falsifiable, because it is to vague. I disagree. Hasn’t the Fed basically announced rate increases through 2019? If they don’t follow through, well there ya go. ---
**Author:** ![naita](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/naita/32/5862_2.png) [@naita](https://boards.straightdope.com/u/naita)\ **Post date:** [October 12, 2018, 5:02pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/39 "2018-10-12T17:02:05Z")
> [@senoy](#): > > So, keeping in mind that your goal is to be the center of attention. Your goal is for the ‘ratings’ to be high and everyone to be paying attention to you, exactly what would you have done differently? I would have stuck with the outrageous and avoided the stupid. The two are not synonymous and Trump isn’t mixing them because he thinks it works better than sticking to just outrageous, he’s mixing them because he’s a one trick pony and can’t tell them apart. You don’t think Trump would have gotten even better poll numbers and support from establishment republicans if there wasn’t so much evidence of him being plain old dumb? ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [October 12, 2018, 5:04pm UTC](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825/40 "2018-10-12T17:04:31Z")
> [@Try2B\_Comprehensive](#): > > I disagree. Hasn’t the Fed basically announced rate increases through 2019? If they don’t follow through, well there ya go. Because we can say with a pretty high degree of confidence that the Fed would freeze or cut rates if the economy turns south, as that’s what everyone expects them to do. I suppose there’s a scenario in which the economy continues to grow, but the stock market goes soft, and the Fed cuts rates… but that’s a pretty poor basis for a bet. I’m still open to any suggestions on how this prediction of Trump managing to strong-arm the Fed into cutting rates could be turned into a fair bet. [Previous page](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825.md?page=1) [Next page](https://boards.straightdope.com/t/the-fed-will-yield-to-trump/822825.md?page=3)