Trump Gives Investors Good Reason to Be Scared

This week’s fall in stock prices was about as unsurprising as President Trump’s explanation for the setback — “The Fed has gone crazy,” he said. Expect more of the same over the coming weeks and months, as the U.S. economy adjusts to the withdrawal of the Federal Reserve’s post-crash monetary stimulus, and a reckless administration persists in testing investors’ nerve.

Stocks have been generously valued of late, shrugging off bad policy too blithely. The outlook for public borrowing was worrisome even before Washington delivered a fiscal stimulus that an economy at full employment doesn’t need. And Trump’s approach to trade, including the growing prospect of an outright trade war with China, might have been designed to cause maximum economic anxiety.