Tuesday, January 31, 2017

Beware of Trump's appointees

No, not to the SCOTUS position. I'll leave that for more qualified analysts. I'm just saying that it seems that Trump will appoint more hawkish appointees for the two vacancies on the Fed’s Board of Governors, which are part of the FOMC, that decided monetary policy (the other 5 are the Governor of the NY Fed, and governors of the rotating member banks). It seems that Trump wants higher interest rates, even if that contradicts his rhetoric about the dollar being appreciated and hurting manufacturing at home. If monetary policy turns significantly more contractionary, unless he really goes for fiscal expansion, he might after all throw the economy into a recession. So far just more uncertainty.

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Fernando Cardim de Carvalho - RIP

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