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Trump’s broadsides in 2018 were met with veritable silence at Fed, transcripts show
© Reuters. FILE PHOTO: U.S. President Donald Trump looks on as Jerome Powell, his nominee to become chair of the U.S. Federal Reserve, speaks at the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria/File Photo
By Howard Schneider and Michael S. Derby
WASHINGTON (Reuters) – On the surface, Donald Trump’s blistering comments about the Federal Reserve beginning in 2018 seemed a grand breach of protocol for a U.S. president, with the businessman-turned-politician railing against a “loco” central bank he thought was undermining his economic policies with interest rate increases.
Inside the Fed, however, an institution designed to be insulated from direct political influence, Trump’s insults in interviews and social media posts landed with nary a whisper among policymakers, according to newly released transcripts of the U.S. central bank’s eight policy meetings in 2018, a year that marked the leadership change from former Chair Janet Yellen to current chief Jerome Powell, who was handpicked by Trump.
Powell, at least in the official record of the Fed’s meetings released on Friday, never uttered Trump’s name, and neither did any of the Fed governors and reserve bank presidents charged with navigating what proved a surprisingly turbulent year for monetary policymakers.
The economy overall was moving along well with strong growth and low unemployment.
But the new trade policies of the Trump administration, including tariffs and curbs on trade with China, had introduced a wealth of unknowns into the monetary policy debate, including the possibility of higher inflation and growth fueled by tax cuts that figured into the Fed’s gradual rate increases.
By the time of the Fed’s Nov. 7-8, 2018 meeting, financial conditions had grown notably tighter, especially in the aftermath of an interview Powell had given to the Public Broadcasting Service a month earlier that stoked a sell-off in stocks and a sharp widening in credit spreads on corporate bonds.
Simon Potter, who was at the time the head of the New York Fed’s markets operations, noted how the Powell interview – in which he said the Fed’s policy rate was “a long way” from neutral, or the point at which it was neither stimulative nor restrictive – was seen by markets as a turning point.
The “notable rise in Treasury yields” that day, Potter said, “precipitated a subsequent reassessment of equity valuations. The move in yields was attributed in part to better-than-expected economic data as well as comments by Chairman Powell that were seen as suggesting a potentially more restrictive monetary policy path and a higher neutral rate.”
“Financial conditions” were mentioned 22 times at that meeting, notably more than at either of the two previous policy gatherings, and key Fed officials, such as Richard Clarida, then the Fed’s vice chair, took stock of a situation in terms that have echoed the central bank’s current deliberations on whether to call time on a tightening cycle.
Clarida mentioned rising bond-yield “term premiums” and posited there was a historic case for the bond market doing “some of the Fed’s job for it” – topics that have been bandied about by current central bank officials. He also described an economy not unlike the present one – with faster-than-trend growth expected soon to cool, a job market at or near full employment and risks of “excess-demand-driven” inflation seen as likely to fade and augur for a change in policymakers’ outlook.
POSSIBLE REUNION
At the Dec. 18-19 meeting that year, policymakers boosted the Fed’s benchmark overnight interest rate to the 2.25%-2.50% range, in what would prove to be the final increase of that hiking cycle.
“With growth expected to decline to closer to trend next year, we can afford to be patient about further policy firming, especially in an environment in which inflation is still muted,” Powell told his colleagues. The Fed leader described an economy where the data had been strong but sentiment was weak, while noting upside inflation risks had declined and the risks of tighter financial conditions had risen.
While that debate included extensive staff analysis of how new international trade frictions and administration policies were influencing the economy, that was the only apparent avenue through which Trump entered the discourse.
There was only one direct reference to Trump’s running commentary about the Fed, and that was to document that it was having no influence.
At the July 31-Aug. 1 meeting, Fed staff discussed how “recent comments by President Trump” had influenced the views of market participants about monetary policy, and found in a survey that investors felt the president “would have no material effect on the (rate-setting Federal Open Market) Committee’s reaction function.”
Though U.S. presidents typically take a hands-off attitude towards the Fed, Trump’s frustration over Powell and the central bank mounted during his four years in the White House. He would eventually call Powell an enemy of the U.S., comparing him to Chinese leader Xi Jinping, and saying the Fed chief was among his worst appointments.
Trump, who is favored to be the 2024 Republican presidential nominee, is running even with President Joe Biden at the outset of the race for the White House, according to a Reuters/Ipsos poll released this week.
Should the former president win the Nov. 5 election and return to the White House next year, it will mark a reunion of sorts. Powell’s current term lasts through May of 2026, 16 months after the next presidential inauguration.
By Dawoud Abu Alkas and Nidal al-Mughrabi
GAZA/CAIRO (Reuters) -Palestinians said an Israeli strike killed at least 22 people in a school sheltering displaced people in southern Gaza City on Saturday, while the Israeli military said the attack targeted a command centre of militant group Hamas.
The Gaza health ministry said most of those killed were women and children. The Hamas-run government media office said 13 children and six women were among the dead.
The military said it hit a Hamas command centre embedded in the compound that previously served as a school, repeating an accusation that the group uses civilian facilities for military purposes. Hamas denies that.
Reuters footage from the site showed blasted walls, wrecked and burnt furniture, and holes in the ceiling of one room as people tried to salvage what they could of belongings.
“The women and their children were sitting in the playground of the school, the kids were playing, and suddenly two rockets hit them,” said one witness Said Al-Malahi.
Some of the dead were wrapped in blankets and carried away on donkey carts, as ambulances transferred other bodies.
“I couldn’t take it, I did not see a single man that is injured, it was all women and children, let the Arab countries rejoice, let them rejoice and clap for (Israeli Prime Minister Benjamin) Netanyahu and the United States of America,” said another eyewitness, Ahmed Azzam, bitter that regional neighbours were not taking a tougher line against Israel.
MEDICS KILLED
In Rafah, in the southern Gaza Strip, the Gaza health ministry said four health workers were killed by an Israeli strike that hit ministry warehouses. Ambulance crews could not reach the dead or treat the wounded, it added.
In a statement, the Israeli military said forces, operating in Rafah since May, have killed dozens of militants in recent weeks and dismantled military infrastructure and tunnel shafts.
Israel’s demand to keep control of the southern border line between Rafah and Egypt has been a major sticking point in international efforts to conclude a ceasefire deal.
Hamas says it is focused on an agreement to end the war and get Israeli forces out of Gaza, while Israel says the war can only end once Hamas is eradicated. Another sticking point has been the specifics of an exchange of Israeli hostages for Palestinian prisoners held by Israel.
This war in the decades-old Israeli-Palestinian conflict was triggered on Oct. 7 when Hamas attacked Israel, killing 1,200 people and taking about 250 hostages, according to Israeli tallies.
Israel’s subsequent assault on the enclave has killed more than 41,000 Palestinians, according to the local health ministry, and displaced nearly the entire 2.3 million-strong population.
(Reporting and writing by Nidal al-Mughrabi; Additional reporting by Dawoud Abu Alkas in Gaza, Adam Makary in Cairo and Ali Sawafta in Ramallah; Editing by Andrew Heavens and Andrew Cawthorne)
By James Oliphant
(Reuters) – Republican presidential candidate Donald Trump will not be joined by his party’s embattled pick for North Carolina governor when he visits the critical electoral state on Saturday, the Trump campaign said.
Trump previously endorsed Mark Robinson, who was the subject of an explosive CNN report this week that he once called himself a Black Nazi and proposed bringing back slavery in comments posted on a pornography website.
Robinson, the state’s lieutenant governor, denied the allegations and has said he will remain in the governor’s race. His campaign could not be reached for comment.
Some Republicans fear his candidacy in one of the country’s highest-profile down-ballot races this year could damage Trump’s chances in the battleground state, where polls show Trump essentially tied with Democratic rival Kamala Harris ahead of the Nov. 5 election.
Ahead of Trump’s afternoon rally in Wilmington, North Carolina on Saturday, the Democratic National Committee launched new advertising across the cities of Raleigh, Charlotte and Greensboro tying the former president to Robinson.
The billboard ads show a photo of the two men together, along with direct quotes from Trump previously calling Robinson an “outstanding person” and an “incredible gentleman.”
The Harris campaign also began running a TV ad in the state on Friday featuring Trump’s past praise for Robinson.
In March, Trump called Robinson “Martin Luther King on steroids” after Robinson delivered remarks in Greensboro, and Robinson appeared at a Trump event as recently as last month. Robinson would be the state’s first Black governor if elected.
Robinson has a history of inflammatory rhetoric, at times referring to Muslims as “invaders” and calling gay and transgender people “filth.” He has made comments denying the Holocaust.
Trump has yet to address the latest allegations against Robinson. One Trump adviser, who asked not to be named, said Trump should stay silent and not fan the controversy.
“Ignore it, and let it die,” the adviser said.
Trump’s campaign did not respond to a request for comment.
Harris’ campaign and its allies have made a significant investment in North Carolina, including two stops by the vice president last week. A Democratic presidential candidate has not won the state since 2008, but voters elected Democrat Roy Cooper as governor in 2016 and 2020.
Robinson had been trailing his opponent, Democrat Josh Stein, even before the CNN report, suggesting that he could be a drag on Trump’s chances in the state if some disaffected Republicans stay home on Election Day or defect to Harris.
Chris Cooper, a professor of political science at Western Carolina University, said in a state that Trump won by just 1.3 percentage points in 2020, the Robinson scandal could damage Republicans’ chances up and down the ballot in November, including Trump’s.
“If some people feel that the Republican brand is stained enough that they’d rather stay home, then that’s going to matter,” Cooper said. “It doesn’t take a big difference to flip the state.”
Thom Tillis, a Republican U.S. senator from North Carolina, responded to the allegations against Robinson by telling voters on X that “we must focus on the races we can win,” citing the presidential contest but omitting the gubernatorial vote.
“If Harris takes NC, she takes the White House,” Tillis wrote. “We can’t let that happen.”
(Reuters) – General Motors (NYSE:) will begin laying off 1,695 workers at its Fairfax Assembly plant in Kansas, the company said in a Worker Adjustment and Retraining Notification (WARN) notice earlier this week.
The first of two rounds of layoffs will begin Nov. 18 and will include the temporary layoff of 686 full-time workers and the termination of 250 temporary employees, Automotive News reported on Saturday citing a company filing to the state of Kansas.
Starting Jan. 12, 759 full-time workers will be temporarily laid off, the report added.
GM did not immediately respond to a Reuters request for comment on the details of the latest layoffs.
Earlier in May, GM had said that it would pause production of the Cadillac XT4 after January 2025 in Kansas, resulting in layoffs of production employees until production resumes in late 2025 for both the Bolt EV and XT4 on the same assembly line.
The company had also said in August that it was laying off more than 1,000 salaried employees at its software and service units worldwide.
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