Is The Yellen Fed Planning To Sabotage Trump's Presidency?

Tyler Durden's picture

Authored by Stefan Gleason via Money Metals Exchange,

The Federal Reserve can make or break a president.

Monetary policy influences all financial markets as well as the cycles in the economy. No president wants to have to run for re-election when the stock market and economy are turning down.

Recall that President George H.W. Bush was sitting on sky-high job approval numbers in 1991 and was expected to coast to victory in his 1992 re-election bid. But then the economy swooned toward recession, giving Bill Clinton the opening he needed.

Bush later blamed Federal Reserve chairman Alan Greenspan for his defeat. Greenspan had held interest rates too high for too long, Bush complained.

On the campaign trail in 2016, Donald Trump complained that Fed chair Janet Yellen was trying to help Hillary Clinton by keeping rates near zero and pumping up the stock market with liquidity.

“They're keeping the rates artificially low so that Obama can go out and play golf in January and say that he did a good job... It's a very false economy,” Trump told reporters in September 2016.

Later that month in the second presidential debate, he declared, “We are in a big, fat, ugly bubble. . . The only thing that looks good is the stock market. But if you raise interest rates even a little bit, that's going to come crashing down.”

Reappointing Janet Yellen Could Be Politically Dangerous to Trump

Now that he’s president, Trump may have become the stock market bubble’s most high-profile cheerleader. He certainly doesn’t want it to burst on his watch.

The president has warmed up to Yellen’s Dow-friendly easy money policies. He even suggested he might reappoint her to the Federal Reserve in early 2018.

That would be a politically dangerous move. The Fed could help determine which party has the advantage in the 2018 mid-terms and the 2020 presidential election beyond that.

Of course, Fed officials insist they are “data driven” and don’t make policy decisions based on politics. Whether they intend to be or not, Fed policymakers are inevitably involved in politics. The members of the Federal Reserve Board are political appointees.

Yellen is a liberal Democrat, appointed by President Obama. She understands what’s at stake in the upcoming elections. She understands that Democrats are in a state of political desperation right now. They hold only 15 governorships, are a minority in Congress, and stand to be steadily replaced in the courts. But they STILL control the Federal Reserve Board.

President Trump now has the opportunity to re-shape the Fed. Three of the seven positions on the Federal Reserve Board remain vacant. Trump can fill them. More importantly, he can replace Yellen as Fed chair next year.

Fed Moves Could Crash the Stock Market, Hurting Republicans in 2018

It’s understandable that Trump is playing nice with Yellen while she’s helping keep things seemingly peachy keen in the markets. But the consequences of the Fed’s balance sheet “normalization” program may start to be fully felt next year. He shouldn’t underestimate the risks of the bubble he identified in 2016 bursting in time for the elections in 2018.

This year’s mid-terms will be of particular concern to Fed officials. Republicans have a shot at expanding their majority in the Senate and finally being able to pass conservative legislation – including potentially an audit and reforms of the Federal Reserve system.

In recent years, GOP reformers in Congress have pushed bills that would force the Fed to adhere to a rules-based formula for setting its target interest rate. That would help remove political conflicts of interest from policy decisions and make them less impactful on markets.

Right now, any major monetary reform efforts would be met with insurmountable resistance by the keepers of the center-left status quo in the U.S. Senate. Yes, despite Republicans having a nominal majority in the Senate, conservatives are in the minority. That became abundantly clear when a pair of liberal Republicans joined anti-Trump establishmentarian John McCain in voting to save Obamacare from being repealed.

Trump’s Priorities to Be Stymied Unless GOP Gains Seats

It’s likely that none of Trump’s legislative priorities – from healthcare, to immigration, to taxes – will ever make it to his desk to become law. Unless conservative/libertarian-leaning Republicans hold onto the House and gain some Senate seats in 2018.

Mid-terms typically result in net losses for the party that controls the White House. Democrats might be feeling good about their odds of winning back full control of the Senate... except for the fact they face a big structural disadvantage this time around.

Democrats must defend 25 Senate seats in 2018, while Republicans only have to put 9 on the line. GOP strategists see an opportunity to expand their majority by knocking off vulnerable Democrat incumbents in Indiana, Missouri, Montana, North Dakota, and West Virginia – states that swung heavily for Trump in 2016.

The question is: Will the economic backdrop be favorable for Republicans to campaign on the Trump agenda? That remains to be seen.

Given the stakes, Donald Trump’s hiring decisions at the Fed could make or break his presidency.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Five Star's picture

They probably already have. Whether they realize it is the question.

http://thesoundingline.com/excess-reserve-overhang-important-ever/

Blue Balls's picture

Trump is doing his best Herbert Hoover act.  

Central banking ia a one trick pony and if you don't know the one trick, raise and lower interest rates you are hopeless.

The question should be will Trump do a Andrew Jackson on the Fed?

Let's hope so.

Manthong's picture

 

..speaking of old ‘Yeller and the Fed…..

..because all here are of the same mindset…

It was a helluva party last night…

..and I just crapped a MOAB…

…it sucked all of the air around out and the light bulbs burst.

.. I think I need to find a new porcelain fixture.

 

Ajax-1's picture

I would love to see Trump ass fist the Fed. That would be awesome.

dasein211's picture

The Fed isn't going to ruin Trump. He's fine with that in his own. if you game theory the collapse there's no way to control the variables which would be too risky for the fed. Would like like to. Absolutely. But it's like herding a Lion, Bear, Tiger and a roomful of snakes.

GUS100CORRINA's picture

Is The Yellen Fed Planning To Sabotage Trump's Presidency?

My response: To answer the above question, we have to ask another question: Is the FED part of the DEEP STATE and a supporter of the New World Order? If the answer to this question is YES, then the answer to the sabotage question is YES!!!

I will let you make up your own mind.

robertsgt40's picture

Is this another trick question? 

Ajax-1's picture

Everybody knows that the Fed is part of the Deep State and their march towards the enslavement of the human race by the NWO.

JRobby's picture

Yellen is gone. Destructive as Bernanke. Trump was dangling a carrot to keep her from crashing it this fall.

Trump needs someone who will make major changes. Disclosing the true balance sheet and all of the "surrogates" that buy and sell for the Fed. Then a transition to public ownership would need to be planned while simultaneously, the "big 4" are broken up and Glass Steagall reinstated as Goldman, etc, is also split up.

Anyone who is opposed to this plan can pack in or do time (or worse) because this "destruction from within" we see throughout GOVT needs to be outlawed and prosecuted for the treason it is.

Doom Porn Star's picture

"Trump needs someone who will make major changes. Disclosing the true balance sheet and all of the "surrogates" that buy and sell for the Fed. Then a transition to public ownership would need to be planned while simultaneously, the "big 4" are broken up and Glass Steagall reinstated as Goldman, etc, is also split up. "

 

I'm with you absolutely 100% on all of that.  Sadly, I just don't expect anything but the same old bullshit.

Thoughts...

 

Volker is too old for this shit.   As soon as he fell asleep Jamie Dimon would reach past him and start pressing the buttons.

Ron Paul wouldn't want to crash a plane he's flying into the middle of the sea even if it had a live activated nuclear device on board.   Transition?   I dunno.

Nassim Taleb has the brains, and could probably work out a transition; but, the Cartel will shit themselves and then initiate some kind of horrible credit crisis before he got the seat warm.

Kashkari isn't the very worst choice and he's already in the pipeline; but he was Paulson's errand boy and kept his mouth shut during the worst of the looting and bailouts when he damned well knew the citizenry were getting raped.   I still don't trust him for that shit.   I think that he was corrupted and basically bought when he brought on board if he hadn't been a Sith Padawan in the first place..

The obvious answer is that it's probably going to be another damned jewish Goldmanite.  With an extra passport...

earleflorida's picture

hmmm... or should we rephrase the authors dialogue being that the FRBsystem is a 'wholly onwed' subsidiary of the Zionist cabal...[AND] that AIPAC controls America's 'electoral college' via lapdog [$$$] congress (whom they also own)!

my question... [is] Israel/Zionist Cabal with all their $$$s  about to 'ABORT' good ole USSA now that its used up[?], and linking up with the all-powerful (New World Order], 'Sino-Russo alliance'!!!

in all practicallity (OROB) is the present and future...[!]

anyone???

Ps. i would gander that the russian and chinese have working the details for years.

Ps2. this would ensure Israel's eternal life in the ME--- and they can fuck america as they fucked the british--- what say you!?!

Ajax-1's picture

Of course the Fed has plans to sabotage the Trump Presidency. Right now the Fed is trying to create the illusion of time/distance seperation pursuant to the damage done by the Magic Kneegrow during his Presidency.When the time is right, the Fed will pull the plug on the artificial stawk market scam and point to Trump and his policies. 

JRobby's picture

"the illusion of time/distance separation" 

Indeed Sir. An illusion it is, while the top of the pyramid continues to accumulate wealth just because the illusion of time is passing.

There is "good time" and there is "bad time". They exist simultaneously. It is the distribution of the good/bad illusion across the societal spectrum that eventually triggers a change in the illusion. We are there. At the tipping point.

Mikeyyy's picture

It  boggles the mind that you have 7 up votes for this idiocy.  Just a sad commentary on the intellect of ZH readers.

 

"When the time is right."  When the fuck is  that?  Yellen's only got 5 months left in her term.  If she's gonna sabotage the Trump presidency, what is she waiting for?  She's had since January and how many tightenings have we had?  Has she sabotaged it yet?  What about reversing QE ?  When does that start?  

 

You people need to go somewhere else to comment.  You're just exhibiting your stupidity here.

Ajax-1's picture

OK shit for brains, school is in session so pay attention. "The time is right" when the FED has all of the retail sheep stawk investors in the market. "The time is right" when the Fed can deflect culpability for thier crimes and pin the blame on a patsy or a false flag event. How many times did the FED raise rates over the 8 years while the Magic Kneegrow was President? Now, that Trump is President, the FED is concerned that their monetary policy has been dovish for too long. How convenient.  You are out of your fucking mind if you believe that the FED is stupid enough to sabotage Trump too soon into his Presidency. If the Fed pulled the plug within the first 12 months of his Presidency, it would be too obvious. Now go back to watching Cramer on CNBS.

yogibear's picture

Time to fire Yellen and her 12 minions.

tmosley's picture

I'm sure she will TRY to sabotage it. It's just that a central banker's understanding of economics is so absolutely fucking backwards that it will propel the economy to new hieghts, and maybe even save the dollar by jacking up interest rates t osomething approaching market rates.

NickyGall's picture

As shown in this article, the Federal Reserve and other central banks are facing an issue that they cannot defeat with even the most imaginative monetary policy:

 

https://viableopposition.blogspot.ca/2017/07/demographics-central-banker...

 

Even negative interest rates will not be able to reverse the structural changes in the United States and the rest of the world's developed economies.

Chippewa Partners's picture

If you haven't read FED UP yet you might want to get up to speed on how the FED operates these days.........

29.5 hours's picture

Trump does not seem to need much help in sabotaging his presidency—Fed crimes aside.

The Cooler King's picture

That's not altogether fair to say.

 

Sure, TRUMP is somewhat of a ninny when it comes to things like TWITTER and what have you, but the SWAMP is ruthless.

 

Sadly, the TRUMP Presidency has already devolved into a 'save your own ass' scenario. Despite his shortcomings, I'm not really sure he expected that. I'm not even sure I ever realized how deep the swamp was until these last few months where it's been exposed.

 

The swamp may, eventually, get the better of Trump, but I gotta hand it to the guy for managing to (whether he was trying to or not) show everyone who is keen enough to understand, what a cesspool it actually is.

 

Frankly, I don't have a lot of hope for this country going forward, but at least now I know that I can put a FACE on the players who connived to bring it down and who 'sold out' to the globalists.

FoggyWorld's picture

He needs to be more creative and mention the Awan Brothers and DWS every chance he gets so that people start asking just what went on there.  Certainly make the Russia, Russia crowd look extremely foolish.

To that he needs to get rid of all of the Obama holdovers and Sessions and McMaster.   His own people are helping to do him in.

 

 

The Cooler King's picture

"He needs to be more creative and mention the Awan Brothers and DWS every chance he gets so that people start asking just what went on there"

 

I'm not sure that would really do any good because the MSM would NEVER pick it up. Even if they did, libtards are so fucking 'programmed' that if DWS ever came under attack from Trump, they'd probably think he was trying to grab her pussy.

 

FFS ~ They don't even see the resemblance to MEDUSA there.

 

It's an utterly brainwashed cult you're dealing with.

Cluster_Frak's picture

Fed cornered themselves. They cannot sell treasuries as it would spike the rates and make issue of new debt very expensive outright. They can only wait for debt to mature, which will gradually increase rates on new treasury issues. Either way interest rates will go up across the curve, except the artificially maintained short term fed rate. 

Another problem is that Fed was artificially surpressing rates with its quantitative easing and was also a buyer of last resort at any yield level. If Fed no longer steps into buying new issue, what happens if new issues are undersubscribed and there is not enough bidders? While USA is the reserve currency and lack of bids is still quite unlikley to happen, EU is fucked since ECB is the primary buyer of their shit debt and if that was to evaporate there will most likley not be enough bids from the market. Yields will spike through the roof and in the end bankrupt EU since they will not be able to sell their debt. ECB knows about it, and they will QE to the last thermonuclear nuke which thankfully EU does not have in possession, thank you Jesus. Now in the EU, expect taxes to skyrocket to cover this folly and you would be an idiot to hold any money in EU banks as bails in will be carried out to support ECB QE program and EU member debt issues in general.

Doom Porn Star's picture

"If Fed no longer steps into buying new issue, what happens if new issues are undersubscribed and there is not enough bidders? "

 

The Primary Dealers get it all shoved up their asses.

First order of business would be to cease paying interest on the excess reserves.  

-Then pop the clutch and let 'er rip.

Of course the housing market and the stock market would have a contest to see which can cliff dive most horrendously spectacularly...

Buy more rubber stamps that say 'Fails to Deliver' and start celebrating FDIC Fridays again!!

Cluster_Frak's picture

hence, no harm will ever come to any bankster since .gov need those primary dealers like never before.

Pool Shark's picture

 

 

"Either way interest rates will go up across the curve, except the artificially maintained short term fed rate."

Uh, no.

While rates might not go down much further (tho I suspect they might), they will not be going up.

See this chart:

https://navellier.com/files/9214/3077/9776/JapanBondYields.png

Any questions?



Ethereal's picture

With the central banks doing their damnedest  to inflate Fiat currencies until they have no Vale, Bitcoin is about to take over as the only fungible store of wealth. https://blog.gridplus.io/blockchains-aol-moment-9ad91385b5b7

shimmy's picture

Either this writer wrote this a while ago or is casually ignoring president pumpkin owning the very market he called a bubble and everything else he railed on during the campaign. If things go south then pumpkin will rightfully deserve the criticism he will get...I am sure though he'll flip once again and act like he wasn't owning those things.

I'm also sure all the trumptards will go into their cognitive dissonance mode and say pumpkin is just playing 35d chess by owning these things rather than accept the guy may not be what they keep thinking he is. Denial is tough for some.

dufferin's picture

Trump is retarded enough not to need anyone to blow his presidency...
He is the swamp

A ziopuppet,
Worthless POS

U4 eee aaa's picture

At least sites like this have warned him well in advance. Just like the RE bubble in 2006 and going forward, sites like this gave plenty of forewarning so that these jokers are without excuse

moneybots's picture

"The Federal Reserve can make or break a president."

 

The Clinton boom and Nasdaq bust both happened while Clinton was President and Greenspan was FED HED. It has been 8 years since the last recession and the longest eaxpansion has been 10 years. We are due for a recession.

If Yellen was trying to sabotage Trump, she would have just kept raising interest rates.

FoggyWorld's picture

She is playing nice to be reappointed.

Kaleb's picture
Question:  Is The Yellen Fed Planning To Sabotage Trump's Presidency? Answer:    Yup

 

Suggestion: Act carefully and thoughtfully.  God just may have an entry in this race.

 

ReturnOfDaMac's picture

I'll take the other side of that, been hearing this for 8 years and making nice profits along the way, long JPM.

small axe's picture

The Fed is the president. Whoever is in the Oval Office just does as they're told.

rockstone's picture

That's a pretty lame article. This presidency, winner of the 2016 election, whoever or whatever party won, was fucked at birth in 2008-09. This was about as long as the Bullshit that was put in place then would last. The plates were always going to stay in the air as long as the plates can stay in the air. They won't make it til 2020. At least that's how it looks.

Fake Trump's picture

No worries Trump will fire Yellen soon to save his presidency. If ZH can see it surely Trump can see it as well.

Yars Revenge's picture

What will firing her accomplish? The banksters will just replace her with another of their own.

Chippewa Partners's picture

Donald Trump’s hiring decisions at the Fed could make or break his presidency............   make or break the Republic is more like it..........    tell me again about that $20,000,000,000,000 owed............the clock is ticking..............  

Yars Revenge's picture

Trump should go for broke and either A)nationalize the Fed or preferably B)abolish it completely. 

 

 

Golden Showers's picture

Or is the Donald trying to get into Yellen's panties?

Think about it.

Man, I bet if Trump could get into that funky old gash, he'd be in the money. I mean, he was "gifted" from the get go. Will Trumpy keep his trophy wife or suck that golden nipple?

You know, for Jared or whatever the fuck his unellected son's name is to stay in business, scott free.

I just looked at my watch and shit is still the same. Reminds me of that TV show called "Dallas" back when.

Someone help me understand: An elected US President sucks Janet Yellen's dick. And Janet Yellen is the PR for a private held central bank. OK. Did I miss something?

Pollygotacracker's picture

You are a potty mouth. Now, go wash your mouth out with a bar of soap.

TeddyBear's picture

Zh has said this before. It didn't happen then and it won't happen now.

order66's picture

They have created markets that will need low volatility forever (good luck with that). In a nutshell:

"The meteoric rise of passive investing suggests how the bubble threat today differs from past bubbles. Central bank engineering has generated unprecedented stability in equity markets, making it more difficult for active investors to find overlooked value, thus easier for algorithmic strategies to outperform. ...many passive strategies are now pegged to low volatility, meaning they count on the artificial stability created by central bank policies. If central banks lose control—whether due to policy normalization or otherwise—it could trigger algorithms to rapidly deleverage." 13D

VWAndy's picture

 Banks/government

ThanksIwillHaveAnother's picture

What the elite dip-shits don't realize is that at some point assets become so expensive that even with QE lenders become skeptical of further loans.   Then margin investors start to get called and have to sell which then snowballs.  So even with QE4 (Trump hopes for this?) it doesn't matter at this point.  C&I loans have turned down but consumer credit is still increasing a bit though store fronts are emptying.  

dark fiber's picture

Trump should just audit the Fed.  Out those who would oppose it, and then end the whole shitshow.\

As an honorable gentleman once said:

"I ended the bank"

Small Government Is Better's picture

Please call the Federal Reserve Bank management and its affiliated banks what they truly are:  BANKSTERS.

This was a combination of the words "banker" and "gangster" which was made part of public speech during the 1930s Great Depression.

The word "banksters" acknowledged the plundering of America being done by the banks of the time.

The plundering never really stopped since the 1930s.  For example, the Monetary Control Act of 1980 eliminated the usury laws of all the states, allowing the banksters to issue credit cards with outrageous interest rates.  That led to credit cards being issued to anyone breathing, and in turn, facilitated the large credit card debts of today.  The credit expansion of the 1980s was part of the fake economic boom which Bill Clinton claimed as his own policy work during his presidency.  Then, Alan Greenspan reduced the cost of mortgage money during Clinton's presidency while facilitating mortgage backed securities of questionable value, and the mortgage crisis of 2007-2009 was the result.  

Bankers are indeed gangsters.  The only difference is they rob Americans with papers rather than guns.