Mere minutes after stocks staged the biggest reversal since 2010 to build on Wednesday’s historic rebound (a rebound that many attributed to Kevin Hassett’s assurances that Fed Chairman Jerome Powell’s jobs was “100% safe”), the White House economic advisor was back on Fox Business Thursday afternoon to reprise his role as the last remaining WH official with any credibility in the eyes of the market.
Hassett, the chairman of the White House Council of Economic Advisers, said that while he has no first-hand knowledge of plans for a meeting between Trump and Powell (speculation has intensified since WSJ reported yesterday that Powell would be “open” to such a meeting), Hassett believes such a get together would be “very productive” and “a very favorable thing.”
Both Powell and Trump are “great guys” who would “get along” if they could only meet up and talk through their issues.
“I’ve not been involved in those discussions but I can say that I think that if they did meet it would be a very favorable thing,” Hassett said during the interview. “The two of them are great guys that would get along if they were to meet and talk things through and the president loves to listen to reason, to arguments, to analysis, and Jay does too. So I think they would have a very productive dinner were they to meet.”
Trump continued his attacks on the Fed this week, tweeting on Christmas Eve after the worst pre-Christmas session in history that “the only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders.”
The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch – he can’t putt!
— Donald J. Trump (@realDonaldTrump) December 24, 2018
But as we pointed out earlier this week, while the Fed is to blame for the market carnage, it’s not for the reasons Trump thinks. By dropping interest rates to zero and aggressively expanding its balance sheet, the Fed created what campaign-era Trump once decried as a “big fat ugly bubble.”
Then again, even if a meeting between Trump and Powell goes south, how long would it take the market to switch gears and realize that getting rid of the hawkish Fed chairman might possibly be a good thing (for asset prices, that is)?
HASSETT: POWELL-TRUMP MEETING WOULD BE A VERY FAVORABLE THING
in the Octagon
— zerohedge (@zerohedge) December 27, 2018
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