From The New York Times:
President Trump has unabashedly hitched his political fortunes to a rising stock market. Now, with stock prices in retreat, he has become increasingly fixated on the idea that one man is to blame for the recent rout: Jerome H. Powell, chairman of the Federal Reserve. After the Fed raised its benchmark interest rate on Wednesday, the fifth consecutive quarterly increase, Mr. Trump fretted to aides that Mr. Powell would “turn me into Hoover,” a reference to the man who was president in the early years of the Great Depression. Mr. Trump has said choosing Mr. Powell for the Fed job last year was the worst mistake of his presidency, and he has asked aides whether he has the power to fire him. Donald Trump is talking about the Stock Market. He has bragged about the Stock Market since taking office, using it as his only predictor of how good the economy is doing. It's not that good an indicator of economic well-being, but it does show what the investor class thinks of the economy -- and a crash of the market can affect the entire economy (as it did in 1929 and 2007).
While Trump was happy to take credit when the Stock Market was doing well, now that it's going down he wants to put all the blame on Federal Reserve Chairman Jerome H. Powell. Powell did raise interest rates slightly to ward off inflation. That raise would likely just have caused a temporary and small blip on the market, and things would have quickly returned to normal (just as it has many times in the past when the rate was raised).
On December 24th, the Stock Market closed at 21,792 for the Dow Jones average. It dropped 653 points -- the biggest Christmas Eve drop in this nation's history. Currently, it is 3,032 points below where it was on January 2 of 2018 -- and 5,036 points below the market's high for 2018.
Could Trump wind up looking as bad as Hoover? I think it's a distinct possibility, but it won't be caused by anything done by the Federal Reserve. The real problem with the market right now is because of Trump. The market likes stability, and that's something the Trump administration seems incapable of providing.
Far more worrying for Wall Street than the small interest rate hike is the tariff/trade war initiated by Trump, the ballooning deficit and national debt caused by his tax cuts, his attacks on our allies and coddling of our enemies, and the continuing chaos reigning in the White House.
Trump may indeed be looked at as the new Hoover in another year or two, but it won't be because of the Federal Reserve. It will be because of the ridiculous mistakes and policy blunders of Trump himself. He is his own worst enemy.
