The boss of JP Morgan, the largest US bank, has said Donald Trump’s attacks on the Federal Reserve chair, Jerome Powell, are putting central bank independence at risk and could backfire and ultimately push up interest rates and inflation.
Jamie Dimon told reporters on Tuesday he had “enormous respect” for the Fed chair, who on Friday became the target of a controversial criminal investigation by the US Department of Justice (DoJ) over alleged “abuse of taxpayer dollars”.
Powell has denounced the investigation, linked to a $2.5bn (£1.9bn) renovation of the Fed’s headquarters in Washington DC, claiming it is punishment for not setting interest rates in line with the US president’s wishes.
You could generalze the title: Trump pushes up inflation
No shit.
couldwillInflation benefits the rich immensely, it’s a nice wealth transfer mechanism.
Then they came for the Bankers
And I did not speak out
Because I fucking hate bankers.
If all the bankers would magically disappear from this world, the world would actually be a shit tonne better…
Bankers fulfill a pretty important role, which is that they turn excess money that would otherwise be economically unproductive into economically productive loans. The world would be a lot worse without bankers.
All the negative behaviour associated with banking comes not from the bankers, the people who work at the branches writing loans and collecting deposits, but rather from finance bros at the top making the management decisions.
When a financial institution is ethically run, you tend to not think about it because it just quietly does its job in the background without making noise or causing trouble. You always hear about big banks in the news doing something shady but when have you heard about a credit union or building society ripping off their customers to the tune of hundreds of millions?
Lack of regulation… Lack of enforcement… Outrageous costs and profits… Fees fees fees and fines… Low to negative interest paid… Capital controls… Mandated inflation so 1$ earned is .90c spent. Too big to fail… Too big to jail… Dangerous gambling with fictional synthetic derivatives…
or the US could just properly regulate it’s banks, like most of the rest of the world does.
US banks are still doing boom and bust predatory lending like it’s the 1600’s
Bbbbbb but Trump KnOwS evErYtHinG! (MAGA believes)
Ya, no shit. Inflation goes up when you reduce interest rates. Which leads to currency devaluation.
putting central bank independence at risk and could backfire and ultimately push up interest rates and inflation.
Inflation, then interest rates get pushed up. But the chances of interest rate hikes goes down considerably if the federal reserve board becomes overall dovish. Right now the board is split. Powell doesn’t make the decision on rates himself, the board votes.
The Fed has an inflation target of 2%, but that target is arbitrary. It’s not really based on anything. Some board members seem fine with a 3% inflation rate, or maybe even higher. Lower interest rates are better for people who own assets, ie wealthy people, because that can help push up asset prices. But inflation is bad for consumers.
Think of high house prices: good for house owners because that’s an asset for them and the higher the price of the asset goes, the wealthier they are. But if you’re someone who doesn’t own a house, the higher the prices go, the harder it is to acquire that asset for yourself.
The stock market is similar. Stocks are expensive right now. That’s great for people who bought those stocks at much lower prices, but not so great for people who want to start investing in stocks now.
If prices come down, deflation, that would be good for buyers, but it would be bad for people who already own. If prices go up, inflation, that’s good for people who own, but not good for buyers.
How DARE they
Destroy the White House!Renovate the Fed Building!What if that is exactly what he wants?
https://washingtonspectator.org/peter-thiel-and-the-american-apocalypse/
you’d think everyone would have caught on to this deliberate boom and bust cycle by now…the term itself comes from an investment strategy.
way way back in the day, bankers, who tended to be the most well-traveled/internationally connected and educated people around, knew that certain economies were fundamentally tied to others. if X disaster hit a certain industry, Y town would inevitably fall into ruin as liquidity dried up. so the savy investment bankers had this great idea of extending very generous loans to people in those vulnerable towns, whose livelyhoods were inevitably headed for ruin. them you swoop in, collect what debt you can, then get to get distressed assets extra cheap.
hell, this has been JPM’s speciality for centuries…it’s no accident they’re the largest bank in the world. they just so happened to be the most ruthless capitalists around, in the country where the bottom line is the only thing that’s really sacred
