Fed Chair: The Fed Can’t Do Much to Fix a Trade War

Stefani Reynolds/CNP via ZUMA

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Fed chair Jay Powell says our economy’s biggest problem isn’t unemployment or consumer spending or business investment, all of which could benefit from an interest rate cut. Our biggest problem is trade uncertainty, and it’s not clear that a rate cut would help with that:

“While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rule book for international trade,” Mr. Powell said, speaking from prepared remarks in Jackson, Wyo., at the Federal Reserve Bank of Kansas City’s annual symposium.

….“Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Mr. Powell said, adding that there were “no recent precedents to guide any policy response to the current situation.”

Translation: Donald Trump has only himself to blame if the economy gets wobbly. It’s mostly due to Trump’s own trade war and the uncertainty surrounding it, and there’s really nothing the Fed can do about it. The only person who can is Donald Trump, by cutting some deals and ending the trade war.

But my guess is that once his aides have explained to Trump that Powell was criticizing him, he will double down on his attacks on the Fed and start wailing even harder about how we’re being cheated by the rest of the world. In fact, let’s check. Ah yes, here it is already:

Atta boy, Donald. Blame all your idiocies on someone else. It’s always worked before, after all.

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REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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