“Brace Yourself” For The Looming Collision Between Trump And Yellen
by Jared Dillian via MauldinEconomics.com,
ZeroHedge.com
Feb 13, 2017
The FOMC recently held its first meeting since Trump took office. But before I get to that, I want to talk about the backdrop to the meeting… Trump’s relationship with Yellen and Yellen’s relationship with Trump.
Trump
Trump hasn’t had much good to say about Yellen. He said that her interest rate decisions were politically motivated. Hey, I was saying the same thing at the time. No disagreement out of me. No rate hikes for years, and now that Trump is elected, the Federal Reserve is suddenly keen on hiking with renewed vigor.
But let me tell you—as much as Trump does not like Yellen, Yellen does not like Trump. You couldn’t find two more opposite extremes. Yellen is about as cautious and risk-averse as it gets. Trump is like a drunk at the poker table, playing every hand, losing a lot of small pots, then next thing you know you’re losing a big hand to him.
I’m not even sure they’ve been in the same room, and I don’t know what would happen if they were.
Jawboning the dollar
I have to give the Federal Reserve credit—they take their jobs very seriously. It is not a “hack” institution. These are smart people who dedicate their lives to maintaining the purchasing power of the currency. We can say that they are misguided from time to time, but they are not malicious, and they are not hacks.
But you also have to remember that these are human beings, and human beings have emotions. So if Trump has made it very clear that he wants a weaker dollar—as he did Jan. 31—then you can bet that Yellen probably wants a stronger dollar, at least on a subconscious level.
The Rest…HERE
