The Fed Hikes
So, the Fed has raised its rate by .25 percent. This is bad policy, and it is bad politics.
The unemployment rate is at 4.7 percent. As I have discussed before, the primary use for the unemployment rate is to determine wage push pressure, not whether people can get jobs (they can’t, and have given up).
Even by that policy, whose intention and largely successful result has been to keep employees from getting raises much higher than inflation, thus flushing money to the rich, 4.7 percent is not full employment. This raise is early.
That leads us to the politics. Yellen has been quite clear in her opposition to Trump’s avowed economic policies and that she intends to use Federal Reserve policy to neuter them. Given Trump hasn’t done anything yet but make promises he may well break, this seems premature, but the perception on the right will be, and possibly accurately, that Yellen, who barely raised at all in eight years of Obama’s economy, is suddenly raising when a Republican is President.
It’s not a good look, and I don’t see any reason to give Yellen the benefit of the doubt. Americans have only barely begun to get raises that put their income higher than before the financial collapse, with millions still unable to find work, and she raises rates?
The Federal Reserve is both irredeemably corrupt and anti-democratic, as well as an incompetent tool of the rich. At the least it needs to be brought back under Democratic control, a wing of the Treasury department, as it was before 1951.
In the meantime, this is another spike in Trump’s chances of a good Presidency, another spike in the jobless coffins of too many Americans, and another way of making sure that the rich get all the gains while everyone else eats their scraps.
(See Also: Trump’s Coming War With the Fed.)
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