The Fed Helped Trump Win the 2016 Election

Donald Trump has renewed his quarrel with the Federal Reserve, tweeting again that the central bank is a bigger problem for the U.S. economy than China. Whether or not it’s wise for the president to lash out in public, he’s right to be concerned. An excessively tight monetary policy from the Fed helped to get him elected, and could contribute to his defeat next year.

The Fed spent much of 2015 signaling that it wanted to raise the federal-funds rate and began raising it in December of that year. Through the end of 2018, it would hike rates eight more times, and simultaneously shrink its balance sheet. The Fed embarked on this tightening cycle even though inflation had been persistently below its announced target of 2 percent per year, and even though inflation expectations had been falling since 2014.