Buck Sexton here with a special report straight from “The Swamp”…
“The President definitely thinks he can fire the Fed Chairman,” my old colleague Saagar Enjeti of The Hill told me over steaks last night.
President Trump had said as much to him in an almost hour-long interview earlier that same day covering all the biggest topics.
Seated in the steakhouse that overlooks the Trump International Hotel, I was getting the after-action report from that interview, with a little added off-the-record commentary from one of the best young political journalists on the D.C. scene.
Trump’s comment that he could fire the Fed Chairman was noteworthy because it was a window into what the leader of the free world is really worried about right now.
He understands the single most important factor in the upcoming 2020 election.
Sure, there’s plenty of noise coming out of Washington (better known to some of you as “The Swamp”)…
The opening Democratic primary debate will be happening in a manner of hours… The migrant crisis at the southern border is dominating headlines… Bob Mueller will be testifying in July… War with Iran seems increasingly possible…
But barring some outlier catastrophe, none of this will be important – or even relevant – come election day.
I’ve been speaking to my sources inside the White House and in the press corps. The President knows that his entire reelection rests on one thing.
Yes, it’s the economy, stupid. And monetary policy matters.
That’s why the President, with all the challenges his administration currently faces, has been spitting fire at the Federal Reserve. A series of tweets earlier this week left no doubt as to his feelings about the Fed’s most recent decision:
Oh, and Trump wasn’t done. The Leader of the Free World lambasted Chairman Jerome Powell and his Fed gang even more. If only they hadn’t messed things up, in Trump’s mind, the already strong economy would be practically unstoppable.
Cast aside for a minute whether Trump’s assessment is correct or not.
He knows that the single greatest threat to his reelection is an economy in a recession or headed in that direction. And there are already some indicators showing a slowing economy.
Tensions over a trade war with China and a possible showdown in the Persian Gulf with Iran have fears of a global economic slowdown on the rise… Gold hits its highest price in six years… The national debt has passed $20 trillion.
That’s why expectations are high for a Fed rate cut in July.
In the meantime, Trump will not be shy about making the case in public for exactly that. The Federal Reserve is supposed to be independent, but that doesn’t mean it is immune to public pressure. And Trump has a big megaphone that he’s not afraid to use.
The stakes are high. All it takes is a downturn to begin, and the 2020 political and economic landscape becomes a markedly different place.
In response, Democratic socialists will decry Trump’s “tax cut for the rich” and promise an orgy of government spending: free healthcare, free college, wiping away over a trillion dollars in student loans.
That the nation can’t afford to pay for these promises won’t matter. The voting public likes free stuff, especially when the voting public feels financially strained.
The Federal Reserve shouldn’t be nearly this powerful. Trump may be able to fire Jerome Powell if he wants to. But whether he realizes it or not, Mr. Powell may hold to keys to Trump’s reelection – and with it, the American economy for quite some time.
Editor’s note: For more predictions about what’s likely coming in 2020, we recommend you read the book The American Jubilee.
It walks you through what you can do to protect yourself if and when the country begins this “orgy of government spending,” as Buck says. You can get a hardback shipped to your door for just $5. Click here to claim your copy.
Now on to the latest news…
So far, the 2020 Democratic nominee fight is turning out exactly as The American Jubilee predicted…
With polls showing that Warren is catching up with Sanders among Democrats favoring a more progressive candidate, Sanders had to do something. He did so with a double-down plan that would cost $2.2 trillion over 10 years, including forgiving all $1.6 trillion in existing student debt.
Presidential front-runner Joe Biden has made a startling promise if he’s elected president: repeal the entirety of the Tax Cuts and Jobs Act of 2017 and to increase taxes by $500 billion on top of that.
Of course, big banks and Wall Street are going to make out just fine with Bernie’s giveaway…
Bernie Sanders, the Brooklyn socialist who represents Vermont in the Senate and is seeking the Democratic presidential nomination, is ready to show those Wall Street meanies a thing or two: He’s going to write them a check for something north of $100 billion.
More on what exactly we mean when we say “Jubilee”…
A Jubilee is a radical measure. The government essentially steals money from one group and hands it to another. In order for this to occur, four elements must be in place…
A more than 20% market pullback ahead?
In such a tempered slide, he says, “Stocks probably wouldn’t fall” but if they did, they likely would tumble about 22% – similar to other recent recessions. That, he says, would take the Standard and Poor’s 500 index about 200 points below its Christmas Eve nadir of 2,351.
A liberal city shipping out its homeless problem onto the rest of us? We’re not surprised at all…
Mayor Elinor Carbone of Torrington, Conn., a Republican, found out about the program from a reporter for RealClearInvestigations. “You’re kidding me,” she said when informed that New York’s homeless have used it to relocate to her town. “That’s incredible. Wow.”
It’s tough to get truly “off the grid” today…
To find real solitude, you have to go out of range. But every year that’s harder to do, as America’s off-the-grid places disappear.
And let us know what you’re reading at [email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
June 26, 2019