President Trump's past observations concerning the economy have been described as drivel and crazy talk. But if one takes some of his past statements at their word we could be in for a week of volatility that would affect us for some time to come. Janet Yellen and the Fed are set this week to make a modest move up in interest rates, signaling some confidence in the economy.
The President who once skewered Obama for holding rates down seems to want to dance with the one he skewered. That is an awkward partnership but nothing is surprising anymore.
Meanwhile, Janet Yellen seems firm in her sense that the rates should go up if the economy is going well and The President intends infrastructure spending.
Health jitters
One thing that might send everything into a new realm of thinking is the state of Mr. Trump's health legislation. He has been doing substantial harm to Obamacare by claiming it is dead. How dead it is will depend on whether the Trump bill makes it through the House and survives a battle royale in the Senate. If the Trump legislation goes down or is protested and stopped, all that infrastructure spending could become problematic. Trump could suffer the same fate his predecessor did. New gridlock could send Trump into a bout of extreme impotence and compensatory rage.
What else could happen?
The New York Times sees it this way: A slow collision could be developing, with the Fed moving at a snail's pace to raise rates to still less than one percent. Trump meanwhile could insist on doing nothing to inhibit growth. At the moment there is little open friction. Trump has some Fed appointments available because the GOP refused to let President Obama fill out the panel.
Yellen could be out as head. Her term ends next February.
Trump is either corrupt or maniacally incompetent. US federal workforce, and by extension the US Government is in massive trouble.
— The Informed Fed (@InformedFed) March 13, 2017
What else? Well, Trump is destroying the government as we speak. Also, he could gin up war with Iran.
He could add to the turmoil that might rise in the wake of political changes in South Korea. There may be some legal deadlines even the President cannot escape. Every week brings at least one thing nobody expected. Does anyone know?
