Should the Fed Join the #Resistance?

President Donald Trump has the Federal Reserve in an impossible spot. His constant backseat-driving of monetary policy encroaches on its political independence. And his relentless trade warring hurts the economy, pushing the Fed to cut rates just as Trump wants — which also makes it easier for him to keep trashing global trade.

Former New York Fed President Bill Dudley suggests the Fed put its foot down. It should resist encouraging Trump’s trade aggression with lower interest rates, he writes, because a prolonged trade war will only make economic conditions much worse in the long run. He also proposes the Fed engage in a different sort of resistance, one of the #Resistance variety. Given that the economy’s biggest threat is the current occupant of the White House, the Fed should consider whether it really wants him to still be there in 2021, he writes.