Former New York Federal Reserve Chair Bill Dudley’s Bloomberg op-ed didn’t get the reception he was hoping for.
In an opinion article published last week, Dudley argued that the Fed needed to “stop enabling” President Trump and his “economic disaster in the making,” and was promptly slammed by both sides of the aisle. So Dudley provided a follow-up Q&A on Wednesday to clarify why he told the Fed to get political — or rather to claim that he didn’t do so in the first place.
In his original column, Dudley wrote that Fed officials should consider rejecting Trump’s requests for interest rate cuts if he keeps making what Dudley called “bad choices,” particularly when it comes to trade policy with China. Dudley expanded on this in his Wednesday op-ed, saying that he “wanted the Fed to be more explicit that the greatest risk to the economy was the uncertainty created by the U.S. trade war with China.” And if the Fed went further and “pushed back” against Trump, “it might be able to achieve a better economic outcome,” Dudley continued.
That still sounds fairly political, or at least like an explicit shot against the president. But Dudley expanded Wednesday by saying he doesn’t think the Fed should get involved in the 2020 election, at least not explicitly. “What the Fed does or doesn’t do can influence electoral outcomes,” but it shouldn’t be “motivated by political outcomes,” Dudley wrote. After all, it’s Trump that has “politicized the central bank,” not the Fed itself, Dudley finished.
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