Bond vigilantes might have to cancel their summer plans if Donald Trump keeps up his reckless assault on the Federal Reserve, in favour of maintaining their role as a force field around the world’s most important central bank.
Trump’s distrust of this sober institution has long been clear. He is, at his core, a real estate guy, skewed towards the supposed benefits of nice low borrowing costs. Along with high taxes on imports, these are the two pillars of his economic worldview.
So it has been bracing, and norm-busting, if somewhat predictable, to witness his constant volley of insults hurled at “numbskull” Fed chair Jay Powell over recent months. Powell has, Trump said on Wednesday, been “terrible” in the role. “I’m surprised he was appointed,” the president said — a curious assertion given he was the man who gave him the job, not, as he appears to believe, his nemesis Joe Biden.