The stock market was inflated and overdue for a correction. It isn’t the Fed’s job to tame Wall Street’s irrational exuberance, but markets always react to rate changes. This is why I think the Fed shouldn’t have cut rates last year. (Another reason is I like earning 4.5% on CDs.)
Rather than continuing to apply more braking power to inflation, the Fed’s easing of interest rates coincided with Wall Street’s optimism over Trump’s “business friendly” return to the White House. In a classic “be careful what you wish for” scenario for investment banks, Trump has whacked Wall Street with his irrational exuberance for tariffs.
Now Trump is saying, “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates.” Uh, no it’s the WORST time. Here’s a bright, young economist who leaves no wiggle room in his analysis of Trump’s tariffs.