In Monday’s post I laid out the reasons why President Trump told Fed chief Jerome Powell he wants a full percentage point cut in the Fed Funds rate.
Has little to do with economics and everything to do with helping the small investor preserve wealth over the summer.
Trump wants to run up the stock market before all the Spygate criminal indictments come out over the next two months. The thought is if the Dow gets near 30,000 points, then there is a cushion on the projected pull back and increased volatility once it is revealed broadly that the Obama administration spied on the Trump campaign/administration.
I want to give you a bit of evidence that Powell is working with the President on this despite all the media saying the two are at odds.
Powell in Dec. 2018 raised rates a quarter of a point. During his press conference he said the Fed sees possible three hikes in 2019. Trump exploded and that’s when the combative narrative began with fake news strories of Trump wanting to fire the Fed chief.
Soon after the hike the President, Powell and Treasury chief Steve Mnuchin met for dinner at the White House, since then the Fed has met three times with no talk of a rate hike.
I believe they laid out a broad timeline to Powell of what would be coming down in the middle of this year as far as Spygate goes and that that was enough to have the Fed chief stop in his tracks on rate hikes.
What would confirm my theory? The Fed’s next meeting is in early June. If they cut rates then or even before it, then I would say we are on track for late June indictments.
Before the June meeting the nation will learn some of what the FBI was doing through the release of former FBI Director James Comey’s redacted testimony, which will set the declassified FISA warrants in motion.
It should be some summer.