David Wessel provides a sane counterpoint to Trump’s idiotic name-calling of Jay Powell. Donald is perpetually stuck in “you’re fired!” mode.
Two additional points I think Wessel should have made are these:
- The government’s cost of borrowing is a function of the bond market more than it is the federal funds rate. The connection becomes more acute if investors lose confidence in the Federal Reserve, which will be the result if Trump has his way. This will force Treasury bond rates higher to entice investors. So it will cost the government more, not less, to borrow money.
- The cost of the Fed’s building renovations isn’t paid with taxes, the money comes from the Fed’s own investments.